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TMI Blog2009 (11) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... discount allowed by them after sales through credit notes issued to purchasers. Excepting one or two assessee-dealers who are engaged in sale of automobiles and spares, all other assessees are either manufacturers or wholesalers of cement. Admittedly assessees made sales, collected tax under the Act, and remitted the same along with monthly returns. However, according to them, depending upon the target achieved, and the prompt payments, assessees have later issued credit notes to dealers representing discount which appellants/petitioners are entitled to deduction in the determination of taxable turnover and therefore the tax paid on the discount given should be refunded to them. The learned single Judge considered all the contentions in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by customers shall not be included in the turnover. The above provision was substituted by the following clause by Act 39 of 2005 notified on 28/08/2005 with retrospective effect from 01/04/2005: (ii) Any discount on the price allowed in respect of any sale where such discount is shown separately in the tax invoice and the buyer pays only the amount reduced by such discount; or any amount refunded in respect of goods returned by customers shall not be included in the turnover. The question raised in all these cases pertains to interpretation of the above provision. In the first place, senior counsel Sri. K.P. Kumar and other counsel appearing for the assessees contended that tax could be levied only on the sale price, and cash di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed on to the ultimate customer and dealers get reimbursement of the tax paid by them. Since Section 11(1) of the Act provides for input tax credit, the Government decided to prescribe procedure for grant of input tax credit. For this purpose, form of Tax Invoice itself is prescribed under Rule 58(10) of the VAT Rules, which makes it mandatory that every dealer shall compulsorily issue bill in the prescribed format. Form 8 prescribed under the said rule specifically requires the seller to show all the details including the value or price on which tax is collected, and the amount of tax collected with specific column for discount and free gift allowed. In other words, unlike under the provisions of the Sales Tax Act and Rules, Form 8 pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The amendment made by Act 39 of 2005 to Explanation III to Section 2(1) was for inclusion of tax invoice and the requirement of purchaser paying only the sale price reduced by discount amount. The question to be considered is whether original provision which did not contain these words conveys a different meaning or whether the amendment made is only clarification of the original provision. There is no dispute that Form 8 which is the tax invoice prescribed under Rule 58(10) provides for separate column for discount and the rule makes it mandatory for a selling dealer to compulsorily raise invoice in the prescribed form. So much so, in our view discount if separately shown as stated in the original Explanation means only discount shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not entitle the assessees for claiming deduction of discount granted other than in the tax invoice. In other words the meaning and scope of provisions before and after amendment are that no dealer is entitled to deduction of discount unless it is separately shown in the tax invoice and the price collected is net of the discount. 3. Senior counsel appearing for the assessees relying on Entry 54 of List II of 7th Schedule to the Constitution contended that discount which does not form part of price cannot be brought to tax as the constitutional entry authorises only tax on sale of commodity which means that tax should be on actual sale price. We do not think the contention is tenable because it is within the powers of the Legislature to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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