ROSHAN MOTORS PRIVATE LIMITED Vs. ASSISTANT COMMISSIONER, COMMERCIAL TAXES DEPTT., ANTI-EVASION, RAJASTHAN

JUDGEMENT

(1.) The present Sales Tax Revisions / References (for short "STRs"), filed under Sec. 84 of the Rajasthan Value Added Tax Act, 2003 (for short "RVAT Act") being aggrieved of the order dtd. 3/3/2020 passed by the Rajasthan Tax Board, Ajmer (for short 'RTB"), were admitted on following questions of law:

(2.) Learned counsel for the assessee submits that the assessee is a registered dealer under the provisions of RVAT Act dealing in automobiles and having dealership agreement of automobile manufacturing company Tata Motors Limited (for short 'TML'). The vehicles purchased by the assessee from TML are as per various targeted schemes provided from time to time by the supplier company, i.e. TML. TML allows the benefit in the shape of discounts/rebates, e.g. 'Off Take Discount', 'Early Bird Off Take Discount' from basic purchase value providing book adjustment entries in the party ledger account. IN other words, the payments required to be made to TML are shortly made by the assessee. The tax charged by TML at the time of effecting sales to the assessee do not change its nature and whatever tax is charged in the tax invoices by the supplier company (TML) is paid to the State Treasury without having any relation with the targeted discounts/rebates. The revenue has made out a case of reversal of input tax credit (for short 'ITC') as per provisions of Sec. 18(3A) of the RVAT Act whereby the sales of the vehicles have been considered as sold on lesser price in comparison to purchase price. Therefore, treating them as sales of vehicles at subsidized rates, the assessee has been held responsible to reverse the ITC claimed as per Tax Account reflected in their books of accounts. Vide the impugned assessment order dtd. 6/12/2016, the revenue converted the discounts/rebates into subsidized sales and thereafter created demand of reversal of ITC with levy of interest and further imposition of penalty. Upon appeal, the appellate authority, vide order dtd. 17/2/2017, confirmed the reversal of tax and interest but set aside the penalty. The RTB, vide its order dtd. 3/3/2020, also confirmed the order of the appellate authority without properly appreciating the position of law and material on record. Being aggrieved, the present STRs are filed.

(3.) The primary contention of learned counsel for the assessee is that Sec. 18(3A) has wrongly being invoked and has no application in the facts and circumstances of the present case. In support of this contention, learned counsel made the following submissions: