COMMERCIAL TAXES OFFICER Vs. WHIRLPOOL INDIA LTD

JUDGEMENT

(1.) In both the petitions, the challenge is to the orders of Rajasthan Tax Board both passed on December 5, 2002 holding that optional service/warranty charges were not included in the price of the goods sold (refrigerators) as they do not constitute a part of the sale price. Holding thus, the Rajasthan Tax Board has held that such charges paid by a customer to a dealer would not be liable to attract levy of tax under the Rajasthan Sales Tax Act, 1994. The Tax Board thus, set aside the orders both of the assessing authority and the appellate authority holding to be contrary. Mr. R.B. Mathur, senior counsel arguing for Revenue, would submit that even while the principle on which the Tax Board has rendered its judgment is unexceptional, yet there was no material before the Tax Board to come to the conclusion that charges levied by the respondent assessee towards service/warranty were optional. He submits that without a specific finding of fact in this regard, the charges levied purportedly on account of after sales service or warranty ought to have been included in the sale price and visited with tax or at the minimum the matter ought to have been remanded to the assessing authority for determining the issue of fact.

(2.) Mr. J.K. Ranka appearing on behalf of the assessing authority would submit that from the reading of the orders of the assessing authority, appellate authority and also the Rajasthan Tax Board, it is evident that issue of the nature of optional service/warranty charges has been considered specifically by the authorities below and there is a categorical finding of fact by the appellate authority that in 90 per cent of the transactions of sale of refrigerators by the company the service/warranty charges were levied while in others they were not. He submit that this finding of fact clinches the issue in favour of the assessee establishing as it does that charge in issue was not universal but optional. He submits that in this view of facts obtaining on record, the case of the respondent-assessee is covered by the judgments of this court delivered in the case of Commercial Taxes Officer v. Godrej G.E. Appliances Limited, 2011 46 VST 372 (Raj) (S.B. Sales Tax Revision Petition No. 47 and 49 of 200.5 decided on March 30, 2011) as also the judgment of this court in the case of Commercial Taxes Officer v. Weston Electronics Ltd.,1992 87 STC 522 (Raj), which enunciates the principle that payment made by the customer to dealers at the time of sale of goods when made by exercising an option to avail of service charge/warranty did not constitute the sale price of the goods sold and could not be reckoned for determining sales tax.

(3.) I have heard the learned counsel for the petitioner as also the learned counsel for the respondent.