Trade discount deductible from taxable turnover when buyer pays only net sale consideration under the sales tax law.

A genuine trade discount allowed in accordance with normal trade practice is deductible from taxable turnover where the purchaser actually pays only the reduced amount. Under the Rajasthan Sales Tax Act, 1994, the statutory definition of "sale price" excludes sums allowed by way of discount or rebate, and rule 25(1)(b) permits deduction when the accounts show payment of the original amount less discount. The Court accepted the discount scheme as a bona fide commercial discount and held that sales tax was confined to the net consideration actually received, not the gross sale value.

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Issues: Whether sales tax was leviable on the gross sale price or only on the net consideration after allowing discount under the relevant Act and Rules.

Analysis: The statutory definition of "sale price" under section 2(39) of the Rajasthan Sales Tax Act, 1994 excludes sums allowed by way of discount or rebate according to the normal trade practice, and rule 25(1)(b) of the Rajasthan Sales Tax Rules, 1995 permits deduction where the accounts show that the purchaser paid only the original sum less the discount or rebate. The Court applied the settled principle that a consistent trade discount is deductible from turnover, and that tax cannot be levied on amounts not actually received as part of the sale consideration. On the facts, the discount scheme was accepted as a genuine commercial discount and the authorities' finding that tax was payable only on the net amount received was neither perverse nor erroneous.

Conclusion: Sales tax was payable only on the net consideration received after discount, and not on the gross value.

Ratio Decidendi: Where a dealer establishes a genuine trade discount allowed in accordance with the normal trade practice and the purchaser pays only the reduced amount, the taxable turnover is confined to the net sale consideration actually received.

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