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Issues:
1. Disputed estimated assessment for the assessment year 1973-74. 2. Adhoc addition and addition of sales of Ponds Powder. 3. Interpretation of sales incentive scheme by Chesbrough Ponds Inc. 4. Tax liability on turnover and quantity basis. Analysis: 1. The appeal challenged the estimated assessment for the assessment year 1973-74, involving an adhoc addition of Rs. 2,000 and an addition of Rs. 1901-07 for sales of Ponds Powder. The lower authorities justified the additions based on stock discrepancies and sales records. 2. The sales incentive scheme by Chesbrough Ponds Inc. involved supplying free units of Ponds Powder to authorized wholesalers, who then distributed them to retailers. The dispute arose regarding the tax liability of these free units sold by the retailers, with the authorities considering them as first sales subject to tax. 3. The Authorized Representative argued that the turnover should be based on prevailing market prices and that the turnover had already been taxed at the manufacturer level. He contended that the lower authorities misinterpreted the scheme and the liability under the Tamil Nadu General Sales Tax Act. 4. The legal analysis focused on the tax framework under the Tamil Nadu General Sales Tax Act, emphasizing that the Act levies tax on turnover and not on quantities. The definition of sale, dealer, turnover, and taxable turnover were crucial in determining the tax liability in this case. 5. The Tribunal concluded that the turnover inclusive of free units had already been taxed at the manufacturer and wholesaler levels. Therefore, the retailers were considered subsequent sellers eligible for exemption under the Act. The Tribunal found no basis for treating the retailers as first sellers and allowed the appeal in part, granting deduction under the relevant rule. This detailed analysis of the judgment highlights the key issues, arguments presented, and the legal reasoning behind the Tribunal's decision.
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