TaxTMI 
TaxTMI 
1980 (1) TMI 179
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....is allowed on the basis of customer's off-take in a specified period. The rate of discount and the quantity to be taken are indicated in the scheme. If the purchases during a half-year period January to June or July to December exceeded, for example, 12 cases of large, medium, small or temple blue or 24 cases of some other items, etc., there will be a discount of 1 per cent and if the sales exceeded certain higher quantities, then the discount was higher. Similarly, if the total purchases by a dealer exceeded Rs. one lakh in a year, 3 per cent discount was allowed and if the turnover exceeded that figure, higher percentages were given. The idea was to see that a customer gets an incentive to place orders and increase the volume of purchases....
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....in the meaning of section 2(h) of the Central Sales Tax Act, 1956." The allowance of the deduction in the manner done by the Tribunal is challenged in the present revision petitions. Section 2(h) of the Central Sales Tax Act defines "sale price" as meaning "the amount payable to a dealer as consideration for the sale of any goods less any sum allowed as cash discount according to the practice normally prevailing in the trade". The learned Government Pleader contended that the discount in the present cases cannot be said to be cash discount so as to fall within the scope of this provision. We are unable to agree with him. The expression "cash discount" appears to have been used in contradistinction to any other kind of discount. Suppos....
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....d against further despatches to be made against orders of the same party. The seller had also a right to vary or cancel the scheme at any time. The bonus discount adjusted in the above manner was claimed as deduction in the sales tax assessment of the assessee in that case. It was held that such "discount" was not allowable as deduction. This decision came up for consideration in State of Tamil Nadu v. Poly-ene General Industries[1977] 39 S.T.C. 254 at 257. and was explained as follows at page 257: "In that case, under a bonus discount scheme, the assessee, a manufacturer of pistons used in automobiles, gave to its distributors, whose net purchases exceeded a target figure, a bonus discount called a rebate, which was not received in cash....
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.... Industries[1977] 39 S.T.C. 254., the assessee, manufacturers of polythene tabular film, bags, etc., entered into a contract with a manufacturer of tobacco. The polythene liners were to be used by the tobacco manufacturers for the purpose of packing tobacco. A refund of 50 paise per liner used for packing was given on receipt of import licence for raw materials against order. The assessee's claim for deduction of the amount of 50 paise per liner from its turnover under section 2(h) of the Central Sales Tax Act was negatived by the assessing authority and the appellate authority, but was upheld by the Tribunal on the ground that though the amount was not cash discount, the price to that extent had been reduced and that the said amount did no....
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....mount, which is called "discount", formed an integral part of the agreement or contract between the parties and affected the price and would, therefore, call for deduction. The Supreme Court in Deputy Commissioner of Sales Tax v. Advani Oerlikon (P.) Ltd.[1980] 45 S.T.C. 32 at 34, 35 (S.C.). considered a similar question on the following facts: The assessee disclosed a taxable turnover after deducting from the catalogue price the amount of Rs. 1,06,708 paid as trade discount by it to retailers. The Sales Tax Officer refused to allow the deduction and computed the taxable turnover at Rs. 9,78,332 and the Appellate Assistant Commissioner upheld the claim. The Tribunal confirmed the order of the Appellate Assistant Commissioner. The matter ....