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TMI Blog1973 (4) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground that it represented the sales discount did not find favour with the assessing authority as well as the Appellate Assistant Commissioner. But the said claim was accepted by the Tribunal on the ground that the said sum is liable to be exempted as sales discount under clause (iii) of explanation (2) to section 2(r) of the Tamil Nadu General Sales Tax Act read with rule 5-A(a) of the Tamil Nadu General Sales Tax Rules. Before us, the revenue questions the correctness of the said view taken by the Tribunal. According to the revenue, the said sum will not fall under clause (iii) of explanation (2) to section 2(r) of the Act and, therefore, the assessee is not entitled to claim deduction in relation thereto. It is pointed out by the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed in accordance with the regular practice of the dealer or is in accordance with the terms of a contract or agreement entered into in a particular case, and provided also that the accounts show that the purchaser has paid only the sum originally charged less the discount." Clause (iii) of explanation (2) to section 2(r) read along with the above rule makes it clear that all amounts allowed either as cash discount or other discount on the price payable in respect of any sale in accordance with the regular practice of the dealer or in accordance with the terms of any contract entered into between the seller and the purchaser will not form part of the total turnover of the dealer. The contention of the learned Government Pleader that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buy more at a time or within a period of time. When the Legislature has specifically used the words "cash or other discount% it must be taken that it was aware of the normal trade practice in commercial circles of giving cash or other discounts. A similar provision giving deduction in respect of cash or other discounts came up for consideration before the Allahabad High Court in Baidya Nath Ayurved Bhawan (P.) Ltd. v. Commissioner of Sales Tax, U.P.[1970] 26 S.T.C. 171. In that case, the court was concerned with clause (ii) of the second explanation to section 2(i) of the U.P. Sales Tax Act, 1948. The said clause (ii) runs as follows: "any cash or other discount on the price allowed in respect of any sale.................................. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is that it should be a payment in cash or kind, and that it must be allowed on the price of any sale. The term 'any sale' would not, in our opinion, mean an individual sale. It will include any aggregate of sales. If a particular purchaser buys half a dozen things, the dealer would normally make out a single cash memo, and he would give the discount on the total value of the sales. If the argument for the department is taken to its logical conclusion, such a consolidated cash discount would not be deductible, simply because the dealer has given the discount not on the sale of each article separately, but had clubbed together the various sales and paid the discount on all of them." With respect, we entirely agree with the view expressed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settlement. This does not impress us. The only relation between the parties to the transaction was that of vendor and purchaser and the discount allowed could not but be in relation to the sales. It makes no difference whether it was allowed in a lump sum or proportionately to each of the sales or purchases. In substance the character of the discount is the same." The learned counsel for the revenue, however, relies on the decision of the Andhra Pradesh High Court in Hyderabad Chemicals and Fertilizers Ltd. v. State of Andhra Pradesh[1968] 22 S.T.C. 298. We, however, find that the said decision does not throw any light on the question at issue before us. In that case, the amount in respect of which a deduction was claimed as a discount w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be clearly taxable subject to the operation of G. 0. No. 2238, Revenue, dated 1st September, 1964. The Tribunal has, however, held that the entire turnover relating to the canteen sales is entitled to exemption. Now that we have held following the above decision of the Supreme Court that the canteen sales after 1st September, 1964, will become taxable, the actual turnover before and after 1st September, 1964, has to be worked out, and the petitioner's liability to sales tax in relation to the canteen sales after 1st September, 1964, has to be considered afresh in the light of the observations of the Supreme Court. For that purpose, we remit the matter to the Tribunal. The tax case is partly allowed. The Tribunal is directed to consider a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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