TaxTMI 
TaxTMI 
2010 (8) TMI 855
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....1,54,872, treating the value of medicines returned on expiry of date and due to damage and breakage and the sum of Rs. 32,81,050 as the value of medicines supplied as free sample and treating the both as intra-State sale, to the gross turnover for the purpose of assessment and levy of tax thereon and being aggrieved by and dissatisfied with the said assessment order the petitioner preferred an appeal before the Additional Commissioner of Commercial Taxes, West Bengal (respondent No. 1) who, in his turn has disposed of the appeal by an order dated July 27, 2009 confirming the order of assessment and hence the present application under section 8 of the West Bengal Taxation Tribunal Act, 1987 is filed praying for setting aside the assessment and the appellate orders impugned and for consequential relief(s). It is contended in the application and submitted by Mr. Bhattacharyya, learned advocate appeared for the petitioner that respondent No. 1 by misconception as to the peculiarity of the trade of dealing in drugs and medicines included the amount of Rs. 10,38,542 to the gross turnover for which credit notes were issued against the sale value of the returned medicines on expiry of s....
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....od prescribed by the manufacturers within which such medicines are required to be utilized failing which those loss their utility and market value and are returned to the manufacturers for free replacement and here in this case the petitioner received return of such expired medicines from the sub-dealers, wholesalers, retailers, etc., for replacement and hence the sale price of such returned medicines claimed to be deducted from the gross turnover but the respondents, being failed to appreciate that special feature of the medicinal business, have illegally added the said value to the gross turnover as intra-State sale and thereby have committed a gross material irregularity to interfere with by this Tribunal and on the basis of the above Mr. Bhattacharyya prays for setting aside the orders impugned directing deduction of the said amounts from the gross turnover as added back and thereby not to levy any tax thereon as has been imposed in the assessment impugned. In support of his above contentions and submissions Mr. Bhattacharyya has cited/referred the decision of this Tribunal taken in an another case of the petitioner for the period 2002-03 being Case No. RN-650 of 2009 and prays....
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....o some for damage and breakage. But the reason assigned in the order is that in such cases the dealers should have to take the correct steps by issuing credit notes against such returned goods and by adjusting in the ledger of the dealer concerned. In the ground of appeal it is the allegation of the petitioner that the assessing authority disallowed the adjustment of credit notes against goods returned on the ground that the credit notes issued against sales relating to the back year 2003-04 and for non-production of documents of such goods returned at the time of hearing of the assessment case. It is also alleged that the assessing authority disallowed the credit notes in respect of expired goods for no document thereof. It is the submission of Mr. Bhattacharyya that the normal trade practice in medicine trade is that goods are returned either for the expiry date or due to lapse of expiry date of slow moving medicines and such goods are generally destroyed by the manufacturers in the presence of the stockists and necessary adjustments in the account are made and hence the disallowance is improper and bad in law for non-considering the same. In the order of assessment respondent No....
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....ssessment order on the second account for disallowing the claim of Rs. 32,81,050 for distribution as free samples as the dealer failed to produce sufficient reasons for such conversion of the imported medicines by virtue of way-bill into free sample medicines and treating the amount as intra-State sale. In the memorandum of appeal it is however admitted by the petitioner that in fact, the relevant certificates issued by the manufacturers in respect of such conversion of saleable item into free sample could not be produced during the course of hearing of the assessment case. But now three number of forms as to free goods approval has been annexed in the present application as annexure A and it is the case of the petitioner that in course of business the petitioner brought the medicine worth Rs. 32,81,050 by the strength of valid way-bill and thereafter those were distributed as free samples to the doctors, medical practitioners, wholesalers, stockists, sub-distributors, etc., etc., at the instance of the principalcompany and on the basis of issuance of the said approval forms as a sanction under a specified format by the company in the name as free goods approval form. It is the sum....