Warranty spare parts supplied through manufacturer credit notes are taxable sale turnover under sales tax law.

Spare parts supplied by an authorised dealer to customers during the warranty period, with reimbursement through manufacturer-issued credit notes, constitute taxable sale turnover under the Karnataka Sales Tax Act, 1957. The dealer acted as the manufacturer's agent, but the factual position was treated as identical to the rule in Mohd. Ekram Khan & Sons, where such supply against credit notes was held to be a sale. Applying that binding principle, the contrary view taken by the Tribunal could not stand, and the assessee's claim failed.

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Issues: Whether spare parts supplied by an authorised dealer during the warranty period against credit notes issued by the manufacturer constitute taxable sale turnover under the Karnataka Sales Tax Act, 1957.

Analysis: The dealer, acting as an authorised agent of the manufacturer, supplied spare parts to customers during the warranty period and received credit notes from the manufacturer. The factual situation was held to be identical to the situation considered by the Supreme Court in Mohd. Ekram Khan & Sons, where it was ruled that supply of parts to customers against the manufacturer's credit notes amounts to a taxable sale. In view of that binding declaration of law, the Tribunal's contrary view could not be sustained.

Conclusion: The transaction is taxable as a sale, and the assessee's claim fails.

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