COMMERCIAL TAXES OFFICER Vs. TATA OIL MILLS LTD

JUDGEMENT

(1.) THIS was initially a reference which is now heard as a revision under section 15 of the Rajasthan Sales Tax Act, 1954, as amended by the Amendment Act of 1984. The question of law referred for the decision of this Court, is the following : " Whether, on the facts and circumstances of the case, the rebate allowed by the assessee on account of reduction of price as per agreement to its dealers amounts to discount deductible under section 2 (t) of the Rajasthan Sales Tax Act, 1954 and rule 29 (a) of the Rajasthan Sales Tax Rules, 1955 ?"

(2.) THE assessee, M/s. Tata Oil Mills Ltd. , entered into an agreement with its retail dealers, under which, it allowed full rebate to the extent of reduction in prices on the entire actual stock held by the dealers on the date of reduction in prices, irrespective of the date of supply. During the assessment year 1967-68, the assessee showed taxable turnover of Rs. 32,13,542 after deducting the amount of Rs. 41,137 therefrom as the rebate given in this manner. THE assessee claimed this deduction in accordance with explanation (iii) to clause (t) of section 2 of the Rajasthan Sales Tax Act, 1954, defining the turnover read with rule 29 (a) of the Rules framed under the Act. THE contention of the department, which has been repelled by the Tribunal, is that such a deduction could not be granted as it did not qualify for deduction under the aforesaid explanation (iii), as a discount on the price. It is also contended that the deduction was not given at the time of sale, but, subsequently, on the basis of the existing stock as a result of reduction in the price.