AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (10) TMI 1023
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....y the respondent herein in their appeal before it. 2. The question of law raised in this revision by the State, inter-alia, is whether the discounts received by the assessee much after purchase from the supplier would have to be deemed as turn over as per Explanation VII to Section 2(ii) of the Kerala Value Added Tax Act ('the Act' for short) or whether it would have to be treated as either a 'cash discount' or 'trade discount' as defined by the Hon'ble Supreme Court in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Emakulam v. Advani Oerlikon (P) Limited (45 STC 32 (SC)). 3. The respondent is a registered dealer under the Act and they are trading in cement. They had filed the annual return f....
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.... turn over. The assessing authority thus issued an order dated 25.09.2013 assessing the turn over by including the 'discounts' received by the respondent and completed the assessment. The respondent filed an appeal before the Assistant Commissioner (Appeals), Palakkad, which was dismissed confirming the order of the assessing authority. The respondent, thereafter, filed a further appeal, which was numbered as TA (VAT) No.226/2014 before the Tribunal. The said appeal was allowed in their favour as per order dated 28.01.2015, which is annexed as Annexure-C and impugned by the State in this revision. 6. From the order of the Tribunal, it is obvious that it had in fact confirmed the findings of the assessing authority and the first app....
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....ected itself in both interpreting the precedents cited above as well as in understanding the true import of the nature of the "discounts" that have been obtained by the assessee. It is without doubt that the Hon'ble Supreme Court in Advani Oerlikon (P) Limited (supra) has distinguished clearly between a 'trade discount' and a 'cash discount'. It has defined cash discount as a discount granted in consideration of the expeditious payments and a trade discount to be a deduction from the catalogue price of goods allowed by wholesalers to retailers engaged in the trade. 9. Both these discounts, though distinct, are however, one that are obtained to the retailer at the time of purchase. It may be that discounts are paid later....
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....e amounts that were obtained by them much after the purchase and subsequent to the sale by the dealer. The mandate of the Act, as is discernible from Section 2 (lii), (ii), is that any discount on the price allowed in respect of any sale where such discount is shown separately in the tax invoice and the buyer pays only the amount reduced by such discount; or any amount refunded in respect of the goods returned by the customers shall not be included in the turnover. However, this is in contra position to the amount that is received by the dealer towards reimbursement for the balance of the price as is shown in Explanation VII to the said section. 12. If all amounts received by the dealer from the suppliers are treated as 'discounts'....
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.... that are to be present for applying the mandate of Explanation VII to Section 2(ii) thus being obvious from the accounts of the assessee, any explanation to the nature of the amounts received by it, in the absence of specific and' clinching evidence/documents to prove such nature, would be of no avail. We, therefore, confirm the findings of the Assessing Authority and the first Appellate Authority that the amounts received by the assessee, which they call 'discounts' are, in fact, the amounts that would fall within the ambit of Explanation VII to Section 2(ii) and hence liable to be added to the turnover. 14. The legal position that the amounts that are obtained by an assessee, who has suffered loss in its trading by having ha....
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....his finding, we have to hold that the main part of the condition in the Explanation that the sale is at below the purchase price stands established and therefore, the contention of the petitioner is rejected. For attracting the above provision, a dealer should subsequent to the sale receive any amount from any person towards reimbursement of the balance of the price. Even though senior counsel appearing for the petitioner contended that the amount received by the petitioner in the form of credit notes is not balance of the price for the goods sold by the petitioner, the authorities below gave a clear finding that the credit notes received is for the goods sold by the petitioner which were purchased from the same manufacturer who issued the ....