STATE OF KERALA Vs. KTC AUTOMOBILES (P) LTD

JUDGEMENT

(1.) The petitioner, a dealer in motor cars and carrying out servicing of vehicles, is before us in the above revisions concerned with the assessments made for the years 2005-06 and 2008-09. The issues which were raised in the year 2005-06 are with respect to the (i) assessment of workshop income as a works contract, (ii) the addition to the turnover of the amounts collected as insurance charges, and (iii) the claim of input tax credit with respect to the discounts obtained by the petitioner from the local dealers amounting to Rs. 66,08,180/-. In the year 2008-09, the question is with respect to workshop income, insurance charges and warranty. The questions of law framed with respect to each of the above issues are re-framed as follows:-

(2.) We would first deal with the issue of insurance charges and claim of input tax credit. As far as the insurance charges, there is no clarity as to what was the purpose for which the money was received by the assessee; whether it be commission from the insurance companies for the insurance taken on the sale of cars or the charges received from the customers for enabling such issuance of policies. We do see either of the authorities have gone into the facts. In such circumstances, we are inclined to remand the issue for a fresh consideration to the Assessing Officer, to verify whether there is any sale of goods involved.

(3.) Similarly, in the case of input tax credit, we notice the decision of this Court in (2010) 18 KTR 329 Cement House v. State of Kerala , which found that when there is a sale for a lesser amount than the purchase price and later the deficiency is made good by the supplier, then necessarily, the said amounts have to be included in the turnover for deciding the tax-ability. As a corollary, if the petitioner had purchased goods from dealers paying tax for the entire amounts and later a discount was granted by the local suppliers for which they had claimed any output tax deduction, then necessarily, the petitioner cannot be denied such input tax credit. We are conscious of the fact that Cement House was in quite a distinct grant of discount which we have to notice.