AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (2) TMI 1053
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....d. v. Additional Commissioner of Commercial Taxes [2014] 71 VST 522 (Karn); [2012] 74 Kar. LJ 97, applies to the facts of the present case on all fours and therefore, the second reassessment order passed by the fourth respondent under section 39(2) of the KVAT Act for the years 2006-07 and 2007-08 disallowing the claims to deduction and the appellate order passed by the third respondent, in the appeals which were clubbed together and filed against the order passed by the fourth respondent, are liable to be set aside. 3. The learned counsel for the petitioner draws attention to the relevant provisions of law, which would be pertinent to consider the case of the petitioner, namely, rules 31 and 3(2)(c) of the KVAT Rules and section 30 of the KVAT Act. The provisions read as follows: "31. Particulars of credit and debit notes.-Where a registered dealer has given a tax invoice in respect of a sale of goods and thereafter the goods or any part thereof are returned to the seller if the sale is cancelled or for any other reason, or the value of the sale is altered, whether due to a discount or otherwise, he shall, subject to the provisions of section 30, give to the buying dea....
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....or debit note is issued and claim reduction in tax or pay tax due thereon. (4) Any document issued by the registered dealer as required under any other law containing particulars of credit note or debit note as prescribed shall be deemed to be a credit or debit note for the purpose of this section." 4. The learned counsel for the petitioner places reliance on decisions of this court, which have dealt with the cases similar to that of the petitioner and in which provisions have been interpreted. State of Karnataka v. Reliance Industries Ltd., Bangalore [2012] 51 VST 274 (Karn); [2010] 68 Kar. LJ 337. A Division Bench of this court has passed an order in a revision petition filed by the State of Karnataka challenging the order passed by the Karnataka Appellate Tribunal in the case of Reliance Industries Limited, Bangalore v. State of Karnataka, pertaining to the tax periods April 2006 to September, 2006. M/s. Reliance Industries Limited had issued credit notes to its purchasers offering discounts in the sale prices at which the goods were sold and claimed deduction in terms of rule 31 of the KVAT Rules. The Tribunal allowed the claim in the second appeals filed by M....
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....spect has not been taken into consideration by the assessing authority as well as the first appellate authority." State of Karnataka v. MIRC Electronics Limited [2010] 68 Kar. LJ 655 This is a case filed by the State Government against the order passed by the Karnataka Appellate Tribunal, which was disposed of at the admission stage with the consent of the parties. This court had framed the following two substantial questions of law and disposed of the revision petition: "(1) Whether the dealer who has given post-sale discounts to its dealers not in the 'tax invoice' but by way of 'credit notes' at a later point of time and reducing his tax liability subsequently would qualify for deduction under rule 3(2)(c) of the Karnataka Value Added Tax Rules, 2005 and the first proviso thereof ? (2) Whether the Tribunal is justified in allowing deduction from the total turnover on the amount of post-sale discounts on the strength of credit notes which are not reflected in the tax invoice ?" This court found that the questions of law raised were already answered by a co-ordinate Bench of this court in the case of State of Karnataka v. Reliance Industries Ltd., Ba....
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....dated November 2, 2015 in STA No. 701 of 2013-. One of the questions of law framed in this decision is reproduced below (page 92 in 6 VST-OL): "Whether it is permissible for the assessee to show the discount given by a separate credit note subsequently and claim deduction even though the said discount is not shown in the tax invoice or sale bill ?" Interpreting rule 31 of the KVAT Rules, this court held that a dealer was entitled to give further discount even after the sale has been completed provided the discounts are customary practice in the trade or otherwise known as trade discount and that the onus of proving the said fact was on the assessee and he ought to demonstrate that the discount given was in accordance with the provisions of the Act and Rules. Relevant portion of the judgment is reproduced hereunder (pages 93 and 94 in 6 VST-OL): "21 The Rules specify. . . and rule 31 stipulates the particulars that ought to be revealed in a debit and credit note. Thus we conclude that the dealer is entitled to give further discounts even after the sale has been completed provided the discounts are the customary practice in the trade or otherwise known as trade discoun....
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....espect of the reduction in sale price and reduction in the corresponding amount of tax directly on the monthly returns filed in the months in which the credit notes are issued or received. It is pointed out that section 30 of the KVAT Act was omitted only with effect from April 1, 2012 by the Karnataka Act No. 17 of 2012 and it does not therefore affect the claims of the petitioner which pertain to the tax periods 2006-07 and 2007-08. That even though section 30 was omitted with effect from April 1, 2012, rule 31 of the KVAT Rules authorising registered dealers to issue credit notes for allowing discounts to purchasers is continued on the rule book even as on date. It is contended that a plain reading of sub-rule (2) of rule 3 of the KVAT Rules, it is evident that it pertains to the determination of taxable turnover by allowing the deductions specified in clauses (a) to (m) from the total turnovers. The discounts allowed in the sale prices is one such deduction authorized by clause (c) of sub-rule (2) of rule 3. In order to be eligible for deduction from the total turnover, one of the conditions prescribed in the proviso to clause (c) is that the tax invoice or the bill of sa....
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....Kar. LJ 97, that in Kitchen Appliances India Limited's case [2012] 51 VST 439 (Karn); [2011] 71 Kar. L.J. 234 the issue was whether rule 3(2)(c) and rule 31 of the Rules are inconsistent and are in conflict with each other. The issue whether credit notes could be issued separately after issuance of sale bills was not under consideration. Attention is drawn to Paragraph 7 of the judgment in Pratham Motors Pvt. Ltd.'s case [2014] 71 VST 522 (Karn); [2012] 74 Kar. LJ 97, which is reproduced below (page 526 in 71 VST): "7. The ratio laid down by this court in Southern Motors' case [2008] 18 VST 161 (Karn) does not prohibit the issuance of credit note subsequent to the sale bill. It is held that such modification in the sale bill is permitted if it is done within six months from the date of sale transaction. In Kitchen Appliances' case [2012] 51 VST 439 (Karn); [2011] 71 Kar. L.J. 234, the issue was whether rule 3(2)(c) and rule 31 of the Rules are inconsistent and are in conflict with each other. The issue whether the credit note could be issued separately after issuance of sale bill was not under the consideration in the said case. . ." It is contended that thoug....