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TMI Blog2016 (10) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, any explanation to the nature of the amounts received by it, in the absence of specific and' clinching evidence/documents to prove such nature, would be of no avail - the amounts received by the assessee, which they call 'discounts' are, in fact, the amounts that would fall within the ambit of Explanation VII to Section 2(ii) and hence liable to be added to the turnover. Revision allowed - decided in favor of revisionist. - O.T. Rev. (VAT) No. 164 of 2015 - - - Dated:- 26-10-2016 - Thottathil B. Radhakrishnan And Devan Ramachandran, JJ. For the Petitioner : Mohammed Rafiq For the Respondent : Harisankar V. Menon, Mahesh V. Menon, Meera V. Menon ORDER Devan Ramachandran, J. State of Kerala has filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the said charges were also reckoned, the sale price will fall far below the purchase price, thus attracting Explanation VII to Section 2(ii) of the Act, which would warrant that the subsequent amounts obtained from the suppliers as 'discounts' be deemed as part of the turnover. 4. Before proceeding further, a reading of the said Explanation would be beneficial in understanding the issues raised in this revision. Explanation VII to Section 2(ii) is as follows: Where a dealer sells any goods purchased by him at a price lower than at which it was purchased and subsequently receives any amount from any person towards reimbursement of the balance of the price, the amount so received shall be deemed to be turnover in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , then went on to consider the explanation given to the word 'purchase price' or 'sale price' as defined by the section and came to a conclusion that the purchase price of the petitioner should be equal to the price of the suppliers added with expenses and incidentals for the purchase. On such reasoning, the Tribunal entered into a finding that the discounts allowed according to the prevailing market price has to be lessened from the value consideration received or receivable to arrive at the sale price (sic). For entering into this conclusion, the Tribunal relied on certain decisions, namely, Advani Oerlikon (P) Limited (supra), Deputy Commissioner of Sales Tax, Ernakulam v. Kerala Rubber Allied Products (1993 (2) KLT 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, in order to get over the loss sustained by him on account of market dictated hostile conditions. 10. In the case at hand, even though the respondent claims that the amounts that it had received from the suppliers were in the nature of a 'trade discount', in the un-controverted and virtually admitted position that without receiving such 'discounts', the business of the respondent would have been in loss, would clearly indicate that the 'discounts' that the assessee had received are in the nature of reimbursements of the loss that it had suffered on account of it having had to sell the goods at a price lower than the purchase price. No evidence to the contrary was found attempted to be led by the assessee before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but called conveniently as 'discounts', would be obliterated. The Tribunal has, therefore, erred in applying the ratio in Advani Oerlikon (P) Limited (supra), even to the amounts received by the assessee from its suppliers as reimbursement for the loss suffered, which are not 'cash discounts' or 'trade discounts', as defined in the judgment. In the absence of any material or evidence to the contrary, but merely on the assertion of the assessee, the Tribunal could not have entered into the factual finding that the amounts received by the respondent are cash or trade discounts, entitled to be excluded from its purchase turnover. 13. When the Statute directs that a thing be deemed or presumed on certain conditions b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether it is received by the dealer at the time of sale of goods or from the purchaser itself. In other words, any amount received by a dealer by way of consideration for sale of goods whether it is received from the purchaser or not is assessable as turnover in respect of the goods sold. The question whether sale is at below the purchase price is a matter to be decided not based on purchase price accounted by the dealer or the amount shown in the invoice, but the actual purchase price which certainly involves freight and handling charges paid by the dealer for the foods purchased. In this case, the clear finding of the lower authorities including the Tribunal is that in some cases sale price is below the purchase price seen in the purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X
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