TaxTMI 
TaxTMI 
2019 (2) TMI 302
X X X X Extracts X X X X
X X X X Extracts X X X X
....2009 C.A. No. 6160/2009 C.A. No. 6173/2009 C.A. No. 6161/2009 C.A. No. 6164/2009 C.A. No. 6163/2009 C.A. No. 6162/2009 C.A. No. 6165/2009 C.A. No. 5967/2011 C.A. No. 5969/2011 C.A. No. 6168/2009 SLP(C) No. 19758/2009 SLP(C) No. 19745/2009 SLP(C) No. 19754/2009 SLP(C) No. 19748/2009 SLP(C) No. 19750/2009 SLP(C) No. 19756/2009 SLP(C) No. 19757/2009 SLP(C) No. 19746/2009 SLP(C) No. 19755/2009 SLP(C) No. 19752/2009 SLP(C) No. 19753/2009 SLP(C) No. 19751/2009 C.A. No. 6172/2009 SLP(C) No. 14260/2007 SLP(C) No. 28859/2011 SLP(C) No. 31698-31702/2013 C.A. No. 4019/2011 C.A. No. 4021/2011 SLP(C) No. 5447/2014 SLP(C) No. 5449-5451/2014 C.A. No. 4516/2018 C.A. No. 9979/2018 C.A. No. 10924/2018 C.A. No. 11724/2018 L. Nageswara Rao And Sanjay Kishan....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the appellant/dealer. However, the High Court, relying upon the judgment of this Court in Mohd. Ekram Khan & Sons v. Commissioner of Trade Tax, U.P., Lucknow (2004) 6 SCC 183 set aside the order passed by the Tribunal, restoring the order of the assessing authority. 5. Mr. P. Chidambaram, learned senior counsel appearing for the appellant, drew our attention to the Dealership Agreement and pointed out that it is a principal-to-principal agreement, but that would not really make a difference to the controversy in question. In terms of this Agreement, inter alia a stock of spare parts has to be kept by the dealer. 6. Learned senior counsel fairly conceded that if the judgment in Mohd. Ekram Khan & Sons (supra) case is applicable, then ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion to paras 17 & 18 of this judgment, where observations have been made to the effect that a dealer sells cars along with a warranty, under which it is agreed that it would replace the parts free of cost. When such a part is replaced, it becomes a part of the car and the property in it stands transferred to the buyer/consumer. There is no separate consideration paid for the part so transferred and, thus, the only reasonable inference is that the consideration for the part or parts that might be replaced, under the warranty, was not separately specified because it was included in the price fixed and paid for the car at the time of its sale. The price so fixed and received is, thus, a consolidated price for the car and the parts that may ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Prem Nath Motors (P) Ltd. (supra) was adopted to conclude that the transaction could not be categorised as a 'sale' even though the dealer had purchased spare parts by giving 'C' Forms. Such a transaction was purely for replacement and not for sale. This judgment again has been specifically overruled in Mohd. Ekram Khan & Sons(supra) case. 11. Commercial Tax Officer (Anti-Evasion), Jodhpur v. Marudhara Motors (2010) 29 VST 114 (Raj): This opinion is post the judgment in the Mohd. Ekram Khan & Sons (supra)case. The learned single Judge of the Rajasthan High Court distinguished the case of the assessee dealer from the facts obtaining in Mohd. Ekram Khan & Sons (supra) case. One such distinguishing factor was that in the Mohd. Ekram Khan & ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....." The submission, thus, is that for the sale of the parts of the car, a price has to be paid, which is not so in the present case. 14. SLP (C) Nos.12806-12808/2016: Learned counsel inter alia drew our attention to "Treitel- The Law of Contract" by G.H. Treitel, (7th ed.), to contend that to be enforceable as a collateral contract, a promise must be supported by consideration. It was submitted that the contract to supply spare parts, during the warranty period was akin to a collateral contract. 15. Learned counsel appearing for the other assessees also supported the stand taken by Mr. Chidambaram. 16. On the other hand, Mr. Basava Prabhu S. Patil, learned senior counsel appearing for the respondents in the aforesaid civil appeal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eplaced. In such an eventuality, the price equivalent of the "complaint reserve" is not returned to the customer. 20. We are not delving into the controversy in any further detail as we are of the opinion that the issue raised is required to be looked into by a larger Bench. The crucial point which would arise for consideration, and over which the matter needs to be debated, is as to whether, in the case of such a warranty for the supply of free spare parts; once the replacement is made, and the defective part is returned to the manufacturer, sales tax would be payable on such a transaction relating to the spare part, based on a credit note, which may be issued for the said purpose. This is in the context of the observations discussed af....