2001 (1) TMI 941

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....er in T.A. No. 1056 of 1990 of the Kerala Sales Tax Appellate Tribunal, Additional Bench II, Ernakulam. The assessment years are 1984-85 and 1985-86. The assessee is the revision-petitioner and it is the appellant before the Tribunal. 2.. The dispute raised in this case is whether the cost of spares replaced by the petitioner/appellant during the warranty period forms part of the petitioner's t....

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....redit notes. 3.. The petitioner submits that the transaction does not constitute "sales" within the meaning of the Kerala General Sales Tax Act, 1963 (hereinafter referred to as "the Act"). It is only a free replacement for customer. The manufacturer issues credit notes for the value together with excise duty and sales tax thereby cancelling the original sale made to the petitioner in respect o....

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....ate by issue of C forms. 4.. The assessing authority was of the view that the petitioner has been making purchase purely for replacement and the value of the goods replaced are reimbursed by the manufacturer by issue of credit notes. The assessing authority took the view that exemption cannot be allowed. The Appellate Tribunal was of the view that the petitioner has transferred the property in ....

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....ely for replacement and not for sale. It is further seen that credit notes are issued by the manufacturer reducing the sale value. Learned counsel for the petitioner brought to our notice a decision of the Delhi High Court reported as Commissioner of Sales Tax v. Prem Nath Motors (P) Ltd. [1979] 43 STC 52.   In the above decision, the court observed as follows: "Now, the warranty was to re....