TaxTMI 
TaxTMI 
2015 (9) TMI 1610
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....aimed as trade discount, could be included in the taxable turn over to the petitioning Company or not, for the purpose of assessment under the Act. 3. Before we deal with the legal issue involved in the present proceeding, as taken note of in the preceding paragraph, it would be apt to encapsulate facts of the case, briefly which are as under:- 4. The petitioner, M/s. Indchemic Health Specialties is a Private Limited Company, registered under the Bihar Finance Act, 1981, having registration No.SL-702 (R), engaged in manufacture and sale of medicines. It has been paying sales tax as per the law including the provisions under the Act. The Company had been granting trade discount to its customers, but the trade discount, so granted, by it was at no point of time, prior to the assessment under challenge, was included to its total turn over, for the purpose of assessment of sales tax under the Act. For the first time, for the financial year 2000-2001, the respondent-authorities disallowed the quantitative discount and included it in the taxable turn over of the Company. The "Trade Quantity Discount Offer" of the Company, has been brought on record by way of Annexure-2/A of the writ ap....
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....fter including the trade discount given by the petitioner for the assessment year, in question, is sought to be justified by the State- respondents, accordingly. 7. From the assessment order under challenge, in the present writ petition, it is evident that the petitioner has been assessed on the gross turn over of Rs. 7,03,62,525/- which includes the discount given by the petitioner to its customers to the tune of Rs. 20,68,257/-. 8. Assailing the impugned assessment order and the demand notice, learned counsel for the petitioner has relied upon a Division Bench decision of this Court in case of M/s Mapra Laboratories Pvt. Ltd. Vs. The State of Bihar & Ors., reported in 2003(4) PLJR 507. It has been contended by him that as per the scheme of „trade quantity discount offer‟ of the petitioner, brought on record by way of Annexure-2/A to the writ application, on purchase of different types of medicines of particular quantity, the petitioner had given certain quantities of stripes and vials free to the purchasers without charging any consideration and, therefore, such products which were supplied to the customers by the petitioner free in terms of its above mentioned sche....
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....m of payment by instalments; (iv) transfer of the right to use any goods for any purpose (whether or not for a specified period); (v) supply of goods made by a society, trust, club or association, whether incorporated or not, to its members or otherwise; (vi) supply by way of or as part of any service or in any other manner, whatsoever, of goods being food or any drink whether or not intoxicating; and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply, and all grammatical variations and cognate expression shall be construed accordingly; and "purchase" means such acquisition of property in goods or purchase of those goods by the person to whom such transfer, delivery or supply is made. Explanation-I. - A transfer or acquisition of goods on hire purchase or under any other system in which payment of valuable consideration is made by instalments, shall, notwithstanding the fact that the seller retains that title in the goods as a security for the payment of the valuable consideration or for any other reasons, be deemed to be a sale or purchase. Explanation-II- Notwithstanding....
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....interpreted as having the same meaning as in the Sales of Goods Act, 1930. 12. The Supreme Court in case of Advani Oerlikon (P) Pltd. (supra), relied upon by the learned State Counsel, is of no help to support the case of the respondents. Paragraphs 5 and 6 of the said decision read thus: "5. At the outset, it is appropriate that we set forth the two relevant definitions contained in the Central Sales Tax Act. Section 2 (j) defines "turnover" to mean "the aggregate of the sale prices received and receivable by him (the dealer) in respect of sales of any goods in the course of inter-State trade or commerce.........."And S. 2 (h) of the Act defines the expression "sale price" to mean "the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade........" It is true that no deduction on account of cash discount is alone specifically contemplated from the sale consideration in the definition of sale price by S. 2 (h), and there is no doubt that cash discount cannot be confused with trade discount. The two concepts are wholly distinct and separate. Cash discount is allow....
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....unt could be allowed only if its effect travelled up to the end consumer. The said submission cannot be accepted. The Supreme Court held in paragraph 4 of the said decision as follows: 4. In our view, the circumstances in the case before the Bombay High Court and the case before us are entirely different. In the case before us, what is offered is a quantity discount. It is available only to those buyers who purchase more than eighty thousand boxes in a year. It cannot be treated as available to all buyers, regardless of whether or not they purchase eighty thousand boxes or more. The case of a quantity discount, which is dependent upon the purchaser buying a certain quantity of the goods, and a cash discount, which is available to all purchasers, is very different. The Tribunal's view is correct. 15. The Supreme Court, in that case, held that buyers who did not fulfill the condition of lifting the quantity of product prescribed under the discount scheme were not entitled for the quantitative discount. 16. In view of aforesaid discussion, this being an admitted fact, that the petitioner had not received any amount, for the supply of products, free to its customers under the schem....