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TMI Blog2004 (7) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... Judge of the Allahabad High Court. The appellant (hereinafter referred to as "the assessee") was a dealer registered under the U.P. Trade Tax Act, 1948 (hereinafter referred to as "the Act"), for the relevant assessment years, i.e., 1990- 91 and 1996-97. The only question involved in these appeals is whether the amount received by the assessee for supply of parts to the customers as a part of the warranty agreement was liable to tax. The assessee was an agent of M/s. Mahindra and Mahindra (hereinafter referred to as "the manufacturer"). The manufacturer had warranty agreement with the purchasers of vehicles (hereinafter referred to as "the customers") to replace defective parts during the warranty period. As found by the taxing authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . v. Union of India [1972] 2 SCR 526, it was clearly held that the replacement of defective parts during the warranty period would not involve any sale. Reliance was also placed on decisions of the Delhi, Madhya Pradesh and Kerala High Courts reported in Commissioner of Sales Tax, Delhi Administration, Vikas Bhawan, New Delhi v. Prem Nath Motors (P.) Ltd. [1979] 43 STC 52, Prem Motors v. Commissioner of Sales Tax, Madhya Pradesh [1986] 61 STC 244 and Geo Motors v. State of Kerala [2001] 122 STC 285. It was submitted that the assessee, as part of the warranty agreement, replaced the defective parts. There was a contractual obligation for the same and, therefore, there was no sale involved. 5.. In response, learned counsel for the Revenue su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacturers of components providing for a warranty so far as the components supplied are concerned. The whole object behind the warranty is that the consumer who has to make a heavy investment for the vehicle should be assured of a proper performance of the vehicle in a trouble free manner for reasonable length of time. Therefore, entire cost of warranty was to be borne by the manufacturer. The issue was entirely different from the one at hand and the ratio in the said case provides no answer to the present dispute. Prem Nath's case [1979] 43 STC 52 (Delhi), as the factual position goes to show, dealt with transfer of property in the part or parts replaced in pursuance of the stipulation of warranty as part of the original sale of car f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a-State or inter- State in character. It was submitted that the manufacturer was located in the State of Maharashtra and, therefore, the transaction would be inter-State in nature. We find no such plea advanced by the assessee before the forums below. On the contrary assessing authorities had categorically recorded a finding that the transaction is intra- State in nature. In view of the factual finding we do not find any substance in the plea taken by the assessee. It was further submitted that on facts the position would be different for other assessment years. We do not think it necessary to express any opinion in this regard. It is for the assessee to place materials in support of its stand, if any, which, it goes without saying, would b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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