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TMI Blog1975 (4) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... x months after the date of sale, the claim for deduction is not admissible under section 13(5) of the Tamil Nadu General Sales Tax Act, hereinafter called the Act. It was the case of the assessee that goods were sold throughout the year and as and when they were returned, refund was effected and that they could not correlate the return to a particular sale. It is in those circumstances, the assessing officer was not able to decide whether the return was within a period of six months. Both the Appellate Assistant Commissioner and the Tribunal agreed with this view of the assessing authority and held that the disputed turnover was not admissible for deduction. In respect of the other turnover of Rs. 13,308.32 representing sales of scrap, the authorities took the view that the scrap is the by-product of the assessees' business and that, therefore, they are liable to be assessed to sales tax on the sale value of the scrap. In respect of the disputed turnover of Rs. 10,360.70, representing the amount refunded in respect of goods returned, the learned counsel for the petitioners contended that though they might not be entitled to claim the benefit of section 13(5) of the Act, they are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear. In support of this contention, the learned counsel also relied on the decision of this court in Devi Films (Private) Ltd. v. State of Madras[1961] 12 S.T.C. 274. and a decision of the Andhra Pradesh High Court reported in State of Andhra Pradesh v. Vauhini Pictures Private Ltd.[1962] 13 S.T.C. 847. Per contra, the learned Government Pleader contended that section 3, which is the charging section, refers to the turnover for each year and the definitions of "taxable turnover", "total turnover" and "turnover" in section 2 will have to be understood only as referring to the turnover for each year and, if so understood, a deduction in respect of a return under rule 5-A(b)(i) could only be with reference to an amount refunded in respect of a sale effected during that year itself and if the sale was in one assessment year and the refund was in the subsequent assessment year, the refund could not be deducted for ascertaining the total turnover. It is true that the charging section refers to the total turnover for each year, but the definitions of the words "turnover", "total turnover" and "taxable turnover" do not refer to the assessment year as such. If the sale is complete, liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf makes that clear. The date of the sale decides the inclusion in the assessee's assessable turnover. The date of the allowance determines the exclusion from the gross turnover under rule 5(1)(b)." A similar view was taken by the Andhra Pradesh High Court in State of Andhra Pradesh v. Vauhini Pictures P. Ltd.[1962] 13 S.T.C. 847. with reference to the corresponding rule 6(1)(b)(i) of the Andhra Pradesh General Sales Tax Rules, 1957. The learned Judges observed in that case: "We find that rule 6(1)(b)(i) discretely omits to mention that the deduction claimed for refund of price in regard to the return of goods should be confined only to a particular period. All that rule mentions is that when goods are taxable on sales, the amounts allowed to purchasers in respect of the goods returned by the purchasers to the dealer is an allowable item. Further on, the condition laid down in that rule (despite repetition) says 'provided the accounts show the date on which the goods were returned and the date on which and the amount for which refund was made'. It looks to us that the mention of the date is not with a view to find out when the claim for deduction has arisen, but only to make it f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hraseology adopted in rule 6 to which the provision originally belonged and the present rule 5-A(b)(i). In rule 6 relating to the determination of the taxable turnover, it was provided that the amount refunded would have to be "deducted" from the total turnover; whereas in rule 5-A, the refunded amount would have to be "excluded" from the total turnover. This change in the phraseology, according to the learned counsel, would show that the refunded amount shall not be treated as part of the total turnover at all and, therefore, no question of deduction of that amount from the total turnover would arise. In other words, you do not take out something unless it is included in it. Therefore, the refund must be relatable to a transaction which took place in that year as the total turnover itself contemplates transactions of that year. The argument is very attractive, but we are unable to agree. It is true that the total turnover has a bearing on the assessability of a dealer and that total also is with reference to a particular assessment year, but as stated already, a dealer would be liable to pay sales tax on the transaction of sale and he will not be entitled to exclude any refunds ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h sale, within a period of six months from the date of sale by adjustment in the assessment and the final assessment shall be completed accordingly but such dealer shall not be entitled to claim any adjustment or refund of the tax in respect of the sale of such articles after the expiry of the said period of six months." It is seen from this provision that if the return was within 6 months after the date of sale and the sale and refund were in different assessment years, the dealer could get a deduction of the refund from the total turnover of the year in which the sale was effected. Thus, what rule 5-A did not enable, section 13(5) enabled. This is also clear from the objects and reasons for the amendment and inclusion of section 13(5). The objects and reasons run as follows: "Under explanation (2) to the definition of 'turnover' in section 2(r), any amount refunded in respect of articles returned by customers shall not be included in the turnover of a dealer. But when such articles are sold by a dealer at the close of a financial year and customers return those articles and obtain refund of the price from the dealer some time after the close of that year, the dealer is unable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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