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TMI Blog2013 (3) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to the prevailing practice in the trade, but inclusive of certain specified items. As per the decision The Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes) Vs. M/s. Advani Coorlikon (P.) Ltd. [1979 (10) TMI 194 - SUPREME COURT] even in absence of any specific exclusion of trade discount from the sale price, it was held that the same cannot form part of the total turnover since the net amount that the dealer receives is the sale price and it is that net amount which is entered as amount realizable.It would thus appear that such amount which the dealer would never receive could not form part of the turnover. Thus as in the present case discount the assessee offered to its dealer was in cash but proportionate to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... common judgment of the Tribunal, wherein in order to decide this issue against the assessee, the Tribunal relied on its previous order dated 27.7.2000 in case of this very assessee for the earlier assessment year 1992-93. Counsel pointed out that such decision of the Tribunal was carried in appeal by the assessee before this Court in Tax Appeal No.259 of 2000. This Court had allowed such appeal by judgment dated 31.7.2012, making following observations: 11) Having heard the learned counsel for the parties and having perused the material on record, we may first notice the discount scheme framed by the assessee. By Circular dated 01.04.1991, the assessee addressed the tender letter to all its dealers and conveyed that there will be modif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground in mind, we may try to ascertain whether such discount should form part of the total turnover. The term turnover has not been defined under the Income Tax Act or for that matter under Section 80HHC of the Act. The Central Sales Tax Act, 1956 defines term turnover in Section 2 (j) of the Act as under: Section 2(h) in turn defines term sales price as under: (h) sale price mean the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvani Coorlikon (P.) Ltd. reported in AIR 1980 SC 609 these definitions came up for interpretation. The question was whether a trade discount as opposed to a cash discount could form part of the turnover. The Apex Court noted that under clause 2(h) it was only the cash discount which would be excluded from the sale price. The Apex Court also noted that there was clear distinction between the trade discount and cash discount. Despite this, it was held that: It is true that no deduction on account of cash discount is alone specifically contemplated from the sale consideration in the definition of sale price by Section 2(h), and there is no doubt that cash discount cannot be confused with trade discount. The two concepts are wholly distinct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perused the such decision. It was a case wherein the assessee had offered trade discount to its dealers on the sales effected. Such discount offered was in form of a credit to be reflected in the account of the dealer. Such credit could be used by the dealer only for the purpose of making laser purchases from the assessee. It was in this background the Division Bench of Madras High Court held that such discount cannot be excluded from the computation of turnover for the purpose of Central Sales Tax Act. Facts in our case are, however, different. The discount the assessee offered to its dealer was in cash but proportionate to the total sales effected by an individual dealer. The amount of discount depended on such total sales. In view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o other specific meaning has been assigned to it. If sale of goods is to be understood as defined in the Sale of Goods Act, the price received/receivable becomes an integral part of the sale transaction. 20) We also notice that in case of Union of India and ors. vs. Bombay Tyres International (P) Ltd. reported in (2005) 3 SCC 787 in context of valuation for the purpose of collection of excise, the Apex Court observed as under: 3(1) Trade discounts:- Discounts allowed in the trade (by whatever name such discount is described) should be allowed to be deducted from the sale price having regard to the nature of the goods, if established under agreements or under terms of sale or be established practice, the allowance and the nature of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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