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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 ..... xercise of the powers under Section 64(1) of the Karnataka Value Added Tax, 2003 (for short 'KVAT Act'). By this order, the Revisional Authority set aside the order passed by the Joint Commissioner of Commercial Taxes (Appeals)-1, Bangalore (for short 'the FAA') dated 12.10.2010 whereby the order of Deputy Commissioner of Commercial Taxes (DM)-31, VAT Division-3, Bangalore, (for short 'Assessing Authority') dated 29.05.2010, for the tax periods between April 2006 to March 2007, April 2007 to March 2008 and April 2008 to March 2009, has been set aside. 3. In the present appeals, filed under Section 66(1) of the 'KVAT Act', the appellant-assessee, in the memorandum of appeals, has formulated the following ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es'). 5. The sole contention urged before this court by learned counsel for the appellant was that the discount allowed by the assessee was reflected in the tax invoice and it was granted as per regular practice and what the assessee received by way of consideration was net after deduction of discount. He submitted that this is nothing but a trade discount and hence the assessee is entitled for deduction to be allowed under Rule 3(2)(c) of the KVAT rules. In support of his contention, he placed reliance upon the Judgment of the Supreme Court in IFB Industries Ltd. -vs- State of Kerala [(2012) 49 VST 1 (SC) and the judgment of the Patna High Court in Mapra Laboratories Pvt. Ltd. -vs- State of Bihar and Others (2004 V.135 STC 157 (Patna) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8. At this stage, it would be advantageous to reproduce the relevant part of Rule 3 of KVAT Rules for better appreciation of the submission advanced by learned counsel for the appellant. Rule 3(2)(c) and first proviso of KVAT Rules reads thus: "3. Determination of turnover; (2) The taxable turnover shall be determined by allowing the following deductions from the total turnover- (a) xxxxxxxxxx (b) xxxxxxxxxx (c) All amounts allowed as discount. Provided 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 in a par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be deducted from the total turnover in arriving at the taxable turnover. Thus, under sub-rule(2) of Rule 3 of the Rules the taxable turnover shall be determined by allowing the deductions. The proviso to clause (c) of sub-rule (2) makes it mandatory that the said discount should be reflected in the sale invoice and that too, in our opinion, 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. 10. The constitutional validity of the proviso to sub-Rule 2(c) of Rule 3 of the KVAT Rules fell for consideration of this Court in W.P.No.9464/2008 (M/s. Southern Motors -vs- State of Karnataka and anoth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds manufactured by the assessee were sold to the distributors and as per the scheme, discount was offered on the basis of their past performance. From bare perusal of the invoice it is clear that the discount shown in the invoice is not relatable to the sale of goods by the said invoice, and that being so, in our opinion, the assessee cannot claim deduction under rule 3 of the Rules. It is not in dispute that the quarterly discount in the form of quantity discount/scheme discount was allowed in the tax invoices on the basis of performance of the previous quarter and not in respect of the sales reflected in the said invoices. 13. Learned counsel for the assessee fairly submits that the discount shown in the invoice was not for the sale of g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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