Warranty spare parts reimbursement can amount to a taxable sale when binding precedent governs the dealership transaction.

Spare parts supplied by a dealer during the warranty period, with reimbursement from the manufacturer under the dealership arrangement, can constitute a taxable sale under the Kerala General Sales Tax Act when governed by binding Supreme Court precedent. The High Court held that the issue was no longer open, found no error in the Tribunal's application of that precedent, and declined interference. The transaction was therefore treated as a sale liable to sales tax, and the question was answered against the assessee.

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Issues: Whether spare parts supplied by a dealer during the warranty period, pursuant to the dealership arrangement and with reimbursement of cost from the manufacturer, constitute a taxable sale under the Kerala General Sales Tax Act.

Analysis: The issue was held to be no longer open in view of the authoritative pronouncement of the Supreme Court in the cited decision. The Tribunal had applied that legal position while rejecting the assessee's contention. The court found no error in that approach and declined to interfere with the Tribunal's conclusion that the transaction amounted to a sale.

Conclusion: The question was answered in the negative and against the assessee, and the transaction was held taxable as a sale.

Ratio Decidendi: Where a dealer supplies spare parts in discharge of warranty obligations and receives reimbursement, the transaction can constitute a sale for sales tax purposes if governed by the applicable binding precedent.

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