Commercial discount treated as price discount and excluded from turnover when reflected in sale consideration despite accounting adjustments.

A commercial discount remains deductible from turnover where it is ultimately reflected in the sale consideration, even if computed per metric ton and adjusted through credit memos or share certificates. Under the U.P. Sales Tax Act, turnover includes the aggregate sale price, but cash or other discounts allowed on the price in respect of a sale are excluded. The court treated the incentive as part of the sale transaction rather than a separate levy, and held that its accounting form did not change its character as a price discount. The disputed discount was therefore excluded from turnover, and the assessee succeeded.

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Issues: Whether the discount allowed by the assessee, though calculated per metric ton and adjusted through credit memos and share certificates, constituted a discount on price so as to be excluded from turnover.

Analysis: Under section 2(i) of the U.P. Sales Tax Act, 1948, turnover means the aggregate amount for which goods are sold, while Explanation II, clause (ii), excludes any cash or other discount on the price allowed in respect of a sale. The discount in question was not a separate levy but an incentive linked to the sale transaction and was ultimately reflected in the price through deduction from the bill. The form in which the discount was computed did not alter its character as a price discount.

Conclusion: The discount was a discount on price and was deductible from turnover, in favour of the assessee.

Final Conclusion: The revision failed and the assessee's turnover was not liable to include the disputed discount.

Ratio Decidendi: A commercial discount retains its character as a discount on price if it is ultimately reflected in the sale consideration, even when computed in a different manner or adjusted through post-sale accounting entries.

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