STATE OF TAMILNADU Vs. THERMON HEAT TRACERS LTD

JUDGEMENT

(1.) The Revenue has preferred this revision against the order of the Sales Tax Appellate Tribunal (Main Bench), Chennai dated 18.9.2000 passed in S.T.A.No.622 of 2000, and the same was admitted on the following question of law:

(2.) The issue is as to whether the liquidated damages stated to have been received by the assessee to the extent of Rs.4,52,960/-should form part of the turnover. The Assessing Officer has found that the said amount is only a temporary deduction and will be paid to the dealers after handing over of the project and, therefore, the deduction claimed by the assessee was held to be inadmissible. That finding of the Assessing Officer came to be reversed by the Appellate Assistant Commissioner holding that though the deduction on the receipts of the assessee was temporary, as the assessee has not received the said amount, there is no justification in including the said amount for determination of the turnover. Accordingly, the Appellate Assistant Commissioner held that the said amount of Rs.4,52,960/-has to be deleted from the taxable turnover. The said order of the Appellate Assistant Commissioner came to be confirmed by the Tribunal under the impugned order, while dismissing the appeal filed by the Revenue.

(3.) On a perusal of the impugned order of the Tribunal, we find that the Tribunal has correctly found, in our view, that the liquidated damages levied have to be borne by the contractor and the payment is reduced to the extent of liquidated damages and, therefore, such amount received after the contractual deductions can alone be treated as turnover. The operative portion of the order of the Tribunal is as follows: