Separate warranty charges excluded from taxable sale price where after-sales service is optional and separately contracted.

Optional, separately charged warranty or after-sales service amounts for refrigerators are not includible in the taxable sale price where they are not part of the consideration for the sale itself or for any act done at or before delivery. The Court applied the settled principle that sale price covers only amounts paid or payable for the sale transaction, and relied on binding precedent treating voluntary service charges under a separate contract as outside turnover. On that basis, the service charge was excluded from tax, and the assessment of tax, interest, and penalty on that amount was unsustainable.

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Issues: Whether optional service charges collected under a separate warranty contract for after-sales service of refrigerators form part of the taxable sale price.

Analysis: The Court applied the settled principle that only the consideration paid or payable for the sale, and amounts charged for acts done at or before delivery, enter the sale price. It noted that the disputed charge was for a separate, optional after-sales service arrangement and relied on prior authority holding that such voluntary, separately charged warranty or service amounts do not form part of the taxable value. The Court further held that the controversy had already been concluded against the Revenue by binding precedent and by an earlier final order in the assessee's own case.

Conclusion: The optional service charges did not form part of the taxable sale price and the revision was dismissed in favour of the assessee.

Final Conclusion: The Revenue failed to establish that the separate warranty charge was includible in the turnover, and the assessment of tax, interest, and penalty on that amount was not sustainable.

Ratio Decidendi: A separately charged, optional warranty or after-sales service amount is not includible in the taxable sale price where it is not part of the consideration for the sale itself or for any act done at or before delivery.

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