Cash discount and double prosecution rules limit tax deduction claims and bar a later prosecution on the same arrears.

Railway freight deducted by a dealer was held not to qualify as a cash discount under trade practice for exclusion from sale price under the Bombay Sales Tax Act, because section 2(14) permits only deductions recognised as cash discounts and section 2(20) cannot enlarge that allowance. The later criminal prosecution for the same tax arrears was treated as barred where it concerned part of the same amount already the subject of an earlier acquittal and an understanding between the parties; section 403 of the Code of Criminal Procedure therefore applied and the proceedings were quashed. The overall result was mixed: the sales tax claim failed, but the second prosecution was unsustainable.

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Issues: (i) Whether railway freight deducted by the dealer could be treated as a cash discount according to trade practice and excluded from the sale price under the Bombay Sales Tax Act, 1953. (ii) Whether a second prosecution for the same tax arrears was barred after the earlier prosecution had ended in acquittal and the parties had reached an understanding regarding payment.

Issue (i): Whether railway freight deducted by the dealer could be treated as a cash discount according to trade practice and excluded from the sale price under the Bombay Sales Tax Act, 1953.

Analysis: The definition of sale price under section 2(14) permits deduction only of sums allowed as cash discount according to trade practice. Railway freight paid by the dealer was not shown to be a cash discount recognised by trade practice. The amount represented a concession or transport-related adjustment between dealer and customer, but it did not fall within the statutory definition. The turnover definition in section 2(20) could not enlarge the deduction beyond what section 2(14) permits.

Conclusion: The railway freight deduction was not allowable as a cash discount and the claim failed.

Issue (ii): Whether a second prosecution for the same tax arrears was barred after the earlier prosecution had ended in acquittal and the parties had reached an understanding regarding payment.

Analysis: The later prosecution related to part of the very amount that had been the subject of the earlier prosecution and of the understanding between the parties. The earlier proceeding had ended in an acquittal. On those admitted facts, the bar under section 403 of the Code of Criminal Procedure applied, and the subsequent prosecution could not be sustained.

Conclusion: The second prosecution was barred and the proceedings were quashed.

Final Conclusion: The challenge to the sales tax deduction failed, but the subsequent criminal prosecution for the same tax arrears was held unsustainable and set aside, so the overall result was mixed.

Ratio Decidendi: A deduction from sale price is allowable only when it squarely falls within the statutory definition of cash discount according to trade practice, and a second prosecution is barred where it is founded on the same subject-matter after an earlier acquittal.

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