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TMI Blog2014 (6) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... cessing natural gas to manufacture liquefied petroleum gas (LPG) and other liquid hydrocarbons at its factory Vijaypur. Petitioner also sells LPG to Oil Marketing Companies (IOCL, BPCL and HPCL), Central Public Sector Undertakings. The price of petroleum and natural gas is controlled by the Ministry of Petroleum and Natural Gas (MOP & NG). The regulation and development of petroleum and petroleum products is the subject matter of Union Government under Entry No.53 List-I of the 7th Schedule. Public Sector undertakings sale LPG to public on subsidized rates. Prior to 1.4.2002 the subsidy was allowed by Union of India through Oil Pool Account. It was not a part of the sale price and was not a subject to State taxation. 4. From 1.4.2002 new pricing system of LPG and kerosene was introduced and the job of regulating and controlling the price of LPG and kerosene was assigned to Petroleum Planning and Analysis Cell (PPAC) attached to the Ministry of Petroleum and Natural Gas, Government of India vide gazette notification dt.30.3.2002. 5. PPAC discharges following functions :- (a) Administration of subsidy on PDS Kerosene and domes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of fixation of price in accordance with the provisions of Central Sales Tax Act and VAT Act because the subsequent credit notes in the form of discount would not cover under the definition of discount mentioned in VAT Act. The authority also held that the petitioner had received input tax rebate on the basis of initial invoice, hence, it could not get the benefit of subsequent credit notes. 8. The period of dispute in this petition is of calender year 1.4.2008 to 31.3.2009. The authority in the impugned order observed that the petitioner sold LPG to different oil marketing companies through sale invoices and in the aforesaid invoices, the provisional bills have been mentioned. Those bills were not finalised up to certain period and subsequently on the basis of credit notes, the sale price was revised and the petitioner fixed the tax liability on the basis of aforesaid sale price. 9. Section 2 (v) of the VAT Act prescribes sale price, which is as under :- 'Sec.2(v) "Sale price" means the amount or any other consideration payable to a dealer as valuable consideration for the sale of any goods less any sum al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or instructions by PPAC. The aforesaid credit note could also not be treated as discount as mentioned in Section 2 (v) (iii) of VAT Act. 12. Similar is the position in regard to Central Sales Tax Act. Section 2 (h) of the aforesaid Act defines sale price which is as under :- "Sec.2(h) Sale price means 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 the cost of installation in cases where such cost is separately charged." 13. Andhra Pradesh High Court in State of Andhra Pradesh v. T.V. Sundaram Iyengar & Sons Ltd. [1987] 65 STC 41 has held as under in regard to discount :- "The assessee's contention was that for allowing the discount as a deduction from out of the turnover, it was not necessary that the discount should be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover which does not represent either sale price or the purchase price. The sale price or the purchase price is nothing but the price paid for goods while purchasing or selling. After invoicing the price of the goods allowing the trade discount, the balance amount is the price received of the goods sold and not the amount before deduction and therefore the trade discount/cash discount cannot be treated as total turnover at all. If the amount of Rs.3,47,685 which was given as discount is deducted then taxable turnover comes to Rs.8,47,685 which was given as discount is deducted then taxable turnover comes to Rs.8,68,908 which would be less than Rs.10,00,000 and therefore turnover tax would not be leviable. It is not disputed that the turnover tax is leviable in case in case the total taxable turnover is Rs.10,00,000 or above." 15. Hon'ble Supreme Court in IFB Industries Ltd. v. State of Kerala AIR 2012 SC 1466 has held as under:- '21. In Deputy Commissioner of Sales Tax (Law) Board of Revenue (Taxes) v. M/s Advani Oorlikon (P.) Ltd., (1980) 1 SCC 360, this Court pointed out that cash di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount reliable. Orient paper Mills Ltd. v. State of Orissa, [1975] 35 STC 84 : 1974 Tax LR 2224 (Ori. HC). 6. Under the Central Sales Tax Act, the sale price which enters into the computation of the turnover is the consideration for which the goods are sold by the assessee. In a case where trade discount is allowed on the catalogue price, the sale price is the amount determined after deducting the trade discount. The trade discount does not enter into the composition of the sale price, but exists apart from and outside it and prior to it. It is immaterial that the definition of "sale price" in Section 2 (h) of the Act does not expressly provide for the deduction of trade discount from the sale price. Indeed, having regard to the circumstance that the sale price is arrived at after deducting the trade discount, no question arises of deducting from the sale price any sum by way of trade discount." 23. The decision of this Court in Deputy Commissioner of Sales Tax (Law) Board of Revenue (Taxes), Ernakulam v. Motor Industries Co, Ernakulam, [1983] 2 SCC 108, is on rule 9 (a) of the Kerala General Sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants to urge their contentions before the appellate authority namely, the Appellate Assistant Commissioner, that would be a mere exercise in futility when a superior officer namely, the Commissioner, has already passed a well considered order in the exercise of his statutory jurisdiction under sub-section (1) of Section 42-B of the Act holding that 21 varieties of the compressed woollen felt manufactured by the appellants are not eligible for exemption under Entry 6 of Schedule I of the Act. Further Section 38(3) of the Act requires that a substantial portion of the tax has to be deposited before an appeal or revision can be filed. In such circumstances we consider that the High Court ought to have considered and pronounced upon the merits of the contentions raised by the parties and the summary dismissal of the writ petition was not justified. In such a situation, although we would have, ordinarily, set aside the judgment of the High Court and remitted the case to that court for fresh disposal, we consider that in the present case it would be in the interests of both sides to have the matter finally decided by this Court at the present stage itself especially since we have ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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