TaxTMI 
TaxTMI 
2010 (5) TMI 775
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....r the respondent. The revision petitioner is a dealer in ceramic tiles, vitrified tiles, sanitary items, etc. During the year 2005-06, the revision petitioner received an amount of Rs. 21,65,301 in the form of credit notes from the manufacturercompany whose distributor the petitioner was. On examination of the returns and accounts, the assessing officer noticed that tiles purchased by he petitioner from outside the State were sold at less than the purchase price and the amount received through credit notes from the manufacturer was towards differential price assessable as turnover under Explanation VII to section 2(lii) of the Act. He therefore added the entire amount received by the petitioner from the manufacturer through credit notes to....
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....he sale price is below the purchase price of the goods, namely, tiles. Explanation VII to section 2(lii) is as follows: "Where a dealer sells any goods purchased by him at a price lower than that at which it was purchased and subsequently receives any amount from any person towards reimbursement of the balance of the price, the amount so received shall be deemed to be turnover in respect of such goods." It is obvious from the above that the purpose of the Explanation is to levy tax on the actual sale price irrespective of whether it is received by the dealer at the time of sale of goods or from the purchaser itself. In other words, any amount received by a dealer by way of consideration for sale of goods whether it is received from the pu....
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....received is for the goods sold by the petitioner which were purchased from the same manufacturer who issued the credit notes. The senior counsel for the petitioner contended that the amount received is in the form of discount received for inter-State purchases and therefore they cannot be treated as balance of the sale price received for the sales effected. We are unable to uphold this contention. There is nothing to prove that the manufacturer claimed the credit amount as discount for the inter-State sales made to the petitioner, in which case they would have claimed tax rebate on the discount so allowed in the form of credit notes later. Obviously the payment made through credit notes by the manufacturer is to make up for the loss suffer....