STATE OF KERALA Vs. SYED MUHAMMED

JUDGEMENT

(1.) State of Kerala has filed the above revision assailing the order of the Kerala Value Added Tax Additional Appellate Tribunal, Palakkad ('the Tribunal' for short), by which it had set aside the orders of assessment and the order of the first appellate authority affirming the assessment, as prayed for by 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 Sec. 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 Honourable Supreme Court in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Emakulam Vs. 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 for the year 2010-2011 conceding a total sales turn over of Rs. 1,66,33,860.00. It was also conceded by the assessee that it had obtained an amount of Rs. 3,78,297/- as discount from its suppliers subsequent to the purchase from them. On verification of the accounts, it was noticed by the Assessing Officer that the purchase value declared by the assessee was without reckoning the loading and unloading charges paid by them. It was further noticed that when the said charges were also reckoned, the sale price will fall far below the purchase price, thus attracting Explanation VII to Sec. 2(ii) of the Act, which would warrant that the subsequent amounts obtained from the suppliers as 'discounts' be deemed as part of the turnover.