Invoice-value assessment upheld where connected sales matched outsider prices and no arm's-length discrepancy was shown.

Invoice-value assessment under Notification No. 120/75-C.E. could not be denied merely because sales were made to a connected concern treated as a related person. The decisive factor was whether the price charged to the connected concern differed from the price charged to independent buyers or showed lack of arm's-length dealing. On the material considered, the same price was charged to both sets of buyers, and different legal constitution alone was insufficient to reject invoice value. The applicants were therefore entitled to the notification benefit and assessment on invoice value, and the contrary view of the lower authorities was unsustainable.

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Issues: Whether the applicants were entitled to assess their goods on invoice value under Notification No. 120/75-C.E. dated 30-04-1975 despite sales to a concern treated as a related person.

Analysis: The lower authorities had denied the benefit of the notification on the footing that substantial sales were made to a partnership firm connected with the applicants and that the proviso relating to related persons was attracted. The decision turned on whether the sales price to the connected concern differed from the price charged to independent buyers and whether the transaction could be regarded as not being at arm's length. The material placed before the Government showed that the same price was charged to both the connected concern and outside buyers, and the existence of different legal constitutions did not by itself justify rejection of the invoice price for assessment.

Conclusion: The applicants were entitled to the benefit of the notification and to assessment on invoice value; the rejection of that basis by the lower authorities was unsustainable.

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