COMMERCIAL TAXES OFFICER Vs. CEAT TYRES OF INDIA

JUDGEMENT

(1.) THIS is a revision against the Board of Revenue's order dated 18th February, 1980 rejecting the department's contention regarding inclusion of an additional amount in the sale price for the purpose of computation of the taxable turnover of the assessee. The assessee carries on the business of selling tyres. According to the prevailing practice, if a tyre is found defective, it is replaced with a new tyre. However, in some cases where the tyre has been used for some time, a part of the price is charged while replacing it with a new tyre. There is no dispute that where the replacement by a new tyre is without charging any additional amount, no question arises for payment of sales tax in addition to the tax paid on the initial transaction. For the other category of cases the assessee pays sales tax also on the additional amount charged from the customer while making the replacement. The department contends that in such cases the assessee should pay sales tax on the entire price of the tyre and not merely on the amount charged from the customer while making the replacement. THIS contention has been rejected by the Board of Revenue.

(2.) IN my opinion, there is no infirmity in the conclusion of the Board of Revenue. Admittedly, the assessee pays sales tax on the amount actually charged from the customer while replacing the old tyre with a new tyre, in addition to the payment of sales tax on the entire sale price of the initial transaction. There is no occasion to require the assessee to pay tax on an amount which is not charged from the customer as sale price while replacing the tyre. It is not as if the department reduces the sale price of the first transaction by the amount for which the adjustment is given to the customer while making the replacement with a new tyre. The sales tax charged on the entire sale price of the initial transaction is not reduced. There is no occasion in such a situation to demand sales tax from the assessee on any amount in excess of that paid by the customer to the assessee at the time of replacement of the tyre. Consequently, the revision is dismissed. No order as to costs. Petition dismissed. .