Warranty replacement receipts treated as taxable turnover; prior binding rulings left no substantial question of law.

Amounts received by an authorised dealer from the manufacturer for replacement of spare parts supplied under warranty were held liable to value added tax. The Court applied the binding Supreme Court ruling in Mohd. Ekram Khan and Sons, and rejected the assessee's attempt to distinguish the arrangement as principal to principal, noting that Navnit Motors Pvt. Ltd. had already considered and rejected that distinction on the same commercial arrangement. As the factual differentiation did not change the legal position, no substantial question of law arose in the appeal.

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Issues: Whether the amounts received by an authorised dealer from the manufacturer towards replacement of spare parts supplied under warranty were liable to value added tax and whether the appeal disclosed any substantial question of law.

Analysis: The Tribunal had applied the Supreme Court decision in Mohd. Ekram Khan and Sons and held the controversy to be concluded against the assessee. The Court noted that the attempted distinction based on a principal to principal relationship had already been considered and rejected in Navnit Motors Pvt. Ltd., where the same commercial arrangement was treated as principal to principal and not as agency. In view of these binding decisions, the factual distinction pressed by the assessee did not alter the legal position.

Conclusion: The receipts were liable to VAT and no substantial question of law arose in the appeal.

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