Extended period of limitation unsustainable; allowable deductions for prompt payment discounts, pro rata recovery, freight and VAT led to demand being set aside.

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....Invocation of the extended period of limitation based on alleged clandestine removal was rejected because sales were supported by proper invoices and payments by account payee cheque to KSRTC, so extended limitation could not sustain the demand. Pro rata recoveries billed as lump sums were allowable where purchase orders authorised such deductions and no performance failure was shown; denial for lack of invoice wise particulars was erroneous. Prompt payment discounts shown in purchase orders and payment records were allowable. Deductions for trading turnover, freight under valuation principles, and VAT paid/payable were substantiated and should be accepted; the impugned demand, interest and penalty were set aside.....