TaxTMI 
TaxTMI 
1973 (4) TMI 86
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.... General Sales Tax Act. So far as the first item is concerned, the assessee's claim for exemption on the ground that it represented the sales discount did not find favour with the assessing authority as well as the Appellate Assistant Commissioner. But the said claim was accepted by the Tribunal on the ground that the said sum is liable to be exempted as sales discount under clause (iii) of explanation (2) to section 2(r) of the Tamil Nadu General Sales Tax Act read with rule 5-A(a) of the Tamil Nadu General Sales Tax Rules. Before us, the revenue questions the correctness of the said view taken by the Tribunal. According to the revenue, the said sum will not fall under clause (iii) of explanation (2) to section 2(r) of the Act and, t....
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....ncluded in the total turnover of a dealer: (a) all amounts allowed as discount, provided that such discount is allowed in accordance with the regular practice of the dealer or is in accordance with the terms of a contract or agreement entered into in a particular case, and provided also that the accounts show that the purchaser has paid only the sum originally charged less the discount." Clause (iii) of explanation (2) to section 2(r) read along with the above rule makes it clear that all amounts allowed either as cash discount or other discount on the price payable in respect of any sale in accordance with the regular practice of the dealer or in accordance with the terms of any contract entered into between the seller and the purchaser wi....
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....f he places an order for a certain amount or quantity or more. Such a discount is given to encourage a buyer to buy more at a time or within a period of time. When the Legislature has specifically used the words "cash or other discount% it must be taken that it was aware of the normal trade practice in commercial circles of giving cash or other discounts. A similar provision giving deduction in respect of cash or other discounts came up for consideration before the Allahabad High Court in Baidya Nath Ayurved Bhawan (P.) Ltd. v. Commissioner of Sales Tax, U.P.[1970] 26 S.T.C. 171. In that case, the court was concerned with clause (ii) of the second explanation to section 2(i) of the U.P. Sales Tax Act, 1948. The said clause (ii) runs as foll....
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....s paid at the time of the payment of the price. The only condition before a payment can be excluded from the turnover is that it should be a payment in cash or kind, and that it must be allowed on the price of any sale. The term 'any sale' would not, in our opinion, mean an individual sale. It will include any aggregate of sales. If a particular purchaser buys half a dozen things, the dealer would normally make out a single cash memo, and he would give the discount on the total value of the sales. If the argument for the department is taken to its logical conclusion, such a consolidated cash discount would not be deductible, simply because the dealer has given the discount not on the sale of each article separately, but had clubbed together....
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....ce to any particular sale or purchase, but as an incentive for prompt payment of the aggregate of price at the time of settlement. This does not impress us. The only relation between the parties to the transaction was that of vendor and purchaser and the discount allowed could not but be in relation to the sales. It makes no difference whether it was allowed in a lump sum or proportionately to each of the sales or purchases. In substance the character of the discount is the same." The learned counsel for the revenue, however, relies on the decision of the Andhra Pradesh High Court in Hyderabad Chemicals and Fertilizers Ltd. v. State of Andhra Pradesh[1968] 22 S.T.C. 298. We, however, find that the said decision does not throw any light o....