TaxTMI 
TaxTMI 
2010 (2) TMI 1070
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.... the financier and the balance from the purchaser and in case of excess payment, refund to the purchaser) a tax invoice is raised making the purchaser (customer) and the financier aware of a discount as set out in a worksheet prepared prior to or simultaneous with the tax invoice. The vehicle is handed over only after the receipt of the price, less the discount from the customer. Thereafter, a credit note is raised on the customer in respect of the discount, including the tax element on the discount, resulting in reduction in the price. (B) General Motors India Private Limited: A pro forma invoice is raised disclosing the on-road price of the car inclusive of all VAT, road tax, insurance, etc., and the customer fills up the "order form" leading to the preparation of a "customer worksheet" disclosing the payment received and discount offered. Thereafter, a "tax invoice" is raised disclosing the ex-showroom price inclusive of VAT and on receipt of the price, less the discount, the vehicle is delivered. It is thereafter that a credit note is raised on the customer in respect of the discount including the tax element on discount, resulting in reduction in price. It is further ....
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....hedule to the Constitution of India, in the interest of equity and justice. The challenge to the vires of rule 3(2)(c) of the Rules in so far as it is set out in the prayer column supra, is grounded on: (i) The levy of tax on discount, not received or receivables in terms of the contract of sale by the seller transgresses the power of the State under entry 54 of List II of the Seventh Schedule to the Constitution of India; (ii) The mandate of the rule that discount if reflected in the tax invoice alone, is entitled to deduction in the taxable turnover, is in conflict with section 2(36) read with sections 4 and 30 of the Act; (iii) The two categories of discounts, namely, discount reflected in the tax invoice and those not reflected in the tax invoice resulting in diminution of the price are met with differential tax treatment creating hostile discrimination, failing to satisfy article 14, namely, intelligible differentia and nexus with the object sought to be achieved; (iv) The opinion in Southern Motors v. State of Karnataka [2008] 18 VST 161 of a learned single judge of this court, holding rule 3(2)(c) as intra vires section 30(1) of Act is not on the premise that ....
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....utside the State otherwise than by way of sale. (36) 'turnover' means the aggregate amount for which goods are sold or distributed or delivered or otherwise disposed of in any of the ways referred to in clause (29) by a dealer, either directly or through another, on his own account or on account of others, whether for cash or for deferred payment or other valuable consideration, and includes the aggregate amount for which goods are purchased from a person not registered under the Act and the value of goods transferred or despatched outside the State otherwise than by way of sale, and subject to such conditions and restrictions as may be prescribed the amount for which goods are sold shall include any sums charged for anything done by the dealer in respect of the goods sold at the time of or before the delivery thereof; 3.. Levy of tax.-(1) The tax shall be levied on every sale of goods in the State by a registered dealer or a dealer liable to be registered, in accordance with the provisions of this Act. (2) The tax shall also be levied, and paid by every registered dealer or a dealer liable to be registered, on the sale of taxable goods to him, for use in the cours....
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.... be deemed to be a credit or debit note for the purpose of this section. Rules 30(1) and 31 of the rules read thus: "30. Particulars of bill of sale.-(1) A bill of sale as specified in section 29, issued by a registered dealer where the value of the goods sold is in excess of one hundred rupees, or a registered dealer selling non-taxable goods or a registered dealer selling goods in the course of inter-State trade or commerce or in the course of export out of the territory of India or import into the territory of India, shall contain the following details, namely.- (a) a consecutive serial number with date of sale; (b) the name, address and registration number of the selling dealer; and (c) a description of the goods with its value: Provided that a consolidated bill of sale shall be prepared by the dealer at the close of each day in respect of all sales whose value does not exceed one hundred rupees: Provided further that where the purchaser so requires, a bill of sale may be issued irrespective of the value of the goods sold. 31.. Particulars of credit and debit notes.-Where a registered dealer has given a tax invoice in respect of a sale of goods and there....
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.... not payable when the goods sold are returned within the prescribed period, the dealer is required to forthwith issue to the purchaser a credit note containing the particulars prescribed in rule 31 of the Rules. This section contemplates the issue of a credit note when the sale value mentioned in the tax invoice is reduced, and a debit note when the sale value is increased. Viewed thus, the dealer is entitled to modify his returns filed for the period when the debit/credit note is issued, however within the period of six months from the date of tax invoice. Regard being had to the aforestated provisions of the statute, there can be no more doubt that the sale price being the consideration payable by the purchaser of the goods, is fixed at the time of sale without scope for fixing the price at a later point of time. This deduction would ensure that the purchaser secures the reduction in the purchase price of the goods on the date of purchase or the date of invoice/bill, while the registered dealer too would benefit from such a course of action in securing the deduction from out of the total taxable turnover. The requirement of the rule that the tax invoice should disclose the dis....
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....ce but exists apart from and outside it and prior to it. The apex court, in Advani 's case [1980] 45 STC 32; [1980] 1 SCC 360 held thus (at page 34 of 45 STC): "6. Under the Central Sales Tax Act, the sale price which enters into the computation of the turnover is the consideration for which the goods are sold by the assessee. In a case where trade discount is allowed on the catalogue price, the sale price is the amount determined after deducting the trade discount. The trade discount does not enter into the composition of the sale price, but exists apart from and outside it and prior to it. It is immaterial that the definition of 'sale price' in section 2(h) of the Act does not expressly provide for the deduction of trade discount from the sale price. Indeed, having regard to the circumstance that the sale price is arrived at after deducting the trade discount, no question arises of deducting from the sale price any sum by way of trade discount." Rule 3(2)(c) is not contrary to the aforesaid principle but prescribes that such a deduction must be disclosed in the tax invoice. This salutary procedure is to ensure that the dealer does not tinker with the value of th....