TaxTMI 
TaxTMI 
1991 (2) TMI 394
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....f Rs. 39,328.98 towards the discount allowed by the assessee to various purchasers. The total taxable turnover reported by the assessee, therefore, worked out to Rs. 25,11,367.32 for the assessment year 1977-78. The Deputy Commercial Tax Officer found that the claim of deduction in respect of Rs. 39,328.98 towards the discount allowed to customers represented incentive discount, by the assessee for the purchases made by its customers which was allowed at a particular rate at the end of the year on the basis of the total purchases reflected in the accounts. The incentive discount was allowed in the form of credit notes for utilisation by the customers for future purchases. The assessing authority was of the opinion that since the discount al....
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....rred to as "the Act" read with rule 5A(a) of the Tamil Nadu General Sales Tax Rules, hereinafter referred to as "the Rules". According to the Board the incentive discount was not entitled to be deducted. The Board did not dispute that the incentive discount had been given as a normal trade practice but opined that it was not enough that if the discount was allowed as a regular practice by the dealer to grant deduction, as in the opinion of the Board, since the discount granted by the assessee did not go directly or indirectly to reduce the pre-determined sale price, it was not entitled to be deducted from the total and taxable turnover. It was also found that there was non-repayment of the tax collected on the discount amount which may amou....
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....icles returned by customers shall not be included in the turnover; Rule 5A. In pursuance of explanation (2) to section 2(r) of the Act, the amounts specified in the following clauses shall not, subject to the conditions specified therein, be included 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." 4.. The ambit and scope of these provisions came up for consideration by this Court firstly in State of Mad....
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....m part of the total turnover of the dealer. We fail to understand why the Board did not follow the law laid down by the Division Benches of this Court in the two judgments cited. To say the least, it was not proper on the part of the Board to ignore, the law laid down by the Division Benches of this Court. The reasoning advanced by the Board had been considered by the Division Bench in State of Madras v. Jeewanlal [1929] Ltd. [1973] 32 STC 649. Therefore, the question involved in the case is no longer res integra. The order of the Board of Revenue under the circumstances, being contrary to the law laid down in the above noted Division Bench judgments, cannot be sustained. We, therefore, set aside the order of the Board of Revenue and restor....