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TMI Blog2014 (4) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... g upon M/s. Southern Motors –vs- State of Karnataka and another [2008 (7) TMI 862 - KARNATAKA HIGH COURT ] - The proviso to clause (c) of Rule 3(2) of the KVAT Rules makes it mandatory that the said discount should be reflected in the sale invoice and that too it should be in respect of the sale of goods reflected in the said sale invoice, otherwise the dealer – assessee is not entitled for deduction of the amount of discount from the total turnover - The discount shown in the relevant invoices was not relating to the sales reflected in the said invoices, but for the sales effected earlier - No reason is found to interfere with the order passed by the Revisional Authority - Therefore, the appeals are dismissed - Consequently, the interim ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the Supreme Court, the Addl. CCT, Zone 1 was justified in passing the impugned order holding that quantity discounts allowed in the tax invoices are not eligible for deduction? (ii) Whether on the facts and in the circumstances of the case and in law, the Addl. CCT, Zone I acted in violation of judicial discipline in passing the impugned order without following the judgment of the Supreme Court mentioned in the grounds of appeal? 4. The appellant-assessee is a private Limited Company registered under the Companies Act, 1956 and engaged in manufacture of Home Appliances like Mixer Grinder, Wet Grinder, Gas Stoves etc.. The assessee claims that as per their regular trade practice they allow discounts such as scheme disco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule that falls for our consideration namely Rule 3(2)(c) are not identical. Rule 9(a) of the Kerala General Sales Tax Rules, 1963 does not speak of tax invoices, but it simply stipulates that the discounts must be shown in the accounts. Rule 3(2)(c) of the KVAT Rules is different. Even the provision that fell for the consideration of the Patna High Court also was different. 7. Charging provision in the KVAT Act is Section 3, which provides that the tax shall be levied on every sale of goods in the State by a registered dealer or a dealer liable to be registered under the provisions of the Act. Section 4 provides that every dealer who is or is required to be registered shall be liable to pay tax on his taxable turnover. Section 2(34), d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ggregate of what is mentioned in this rule. Sub-rule (2) of Rule 3 deals with the determination of taxable turnover. The taxable turnover shall be determined by allowing the deductions mentioned in sub-rule (2). The proviso to clause (c) of sub-rule(2) of Rule 3 makes it clear that such discount is allowed in accordance with the regular practice of the dealer or is in accordance with the terms of any contract or agreement entered into a particular case and the tax invoice or bill of sale issued in respect of the sales relating to such discounts show the amount allowed as discount . It is thus clear that a dealer may have the particular practice or a contract agreement with the purchaser in respect of such discount to be given. Such practic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... later. If under the rule, the benefit is made available subject to the condition that the discounted price should have been so indicated in the invoice value of the goods, the condition is neither ultravires Section 30 of the Act nor is discriminatory. I do not find any infirmity in the Rule nor the rule being ultravires under the provisions of Section 30 of the KVAT Act. 11. In the writ appeal No.1198/2008, challenging the judgment dated 16.7.2008 in W.P.No.9464 of 2008, the dealer/assessee did not press challenge to the constitutional validity of Rule 3(2)(c) of the Rules. 12. In the present case, the assessee seeks deduction of the value representing quantity/scheme discount allowed in the tax invoices in view of their performan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods by the said invoice. It is necessary that the discount reflected in the tax invoice of sale should be in respect of the sales relating to such discount shown in the said invoice. Rule 3 of the KVAT Rules clearly provides that the tax invoice or bill of sale should be in respect of the sales relating to such discount shown therein only will be allowed to be deducted under Rule 3(2)(c) of the KVAT Rules. Admittedly, the discount shown in the relevant invoices was not relating to the sales reflected in the said invoices, but for the sales effected earlier. 14. It is in this backdrop, in our opinion, the Revisional Authority has rightly set aside the order passed by the FAA and restored the order passed by the Assessing Authority ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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