Case: M/s. Universal Cylinders Limited Vs. The Commercial Taxes Officer

by the dealer in respect of the goods at the time of or before the delivery thereof." 9. Reference may also be made to Section 2(44) of the Rajasthan Sales Tax Act, 1994 which defines turnover as under: "2(44) "turnover" means the aggregate amount received or receivable by a dealer for sales as referred to in clause (38) including the purchase price of the goods which are subject to purchase tax under section 11 of the Act;Explanation : Tax charged or collected and shown separately in the sale bill/cash memorandum or in the accounts shall not form part of turnover." 10. The High Court held that since the words paid, payable, amount received and or receivable have been used in the aforesaid two sections, the assessee was entitled to receive the amount of Rs.682/per cylinder and if he has given any discount, he cannot claim refund of the same and the price of the cylinder cannot be said to be Rs.645/per cylinder. The High Court also held that the goods were delivered at Rs.682/per cylinder and this amount was collected and therefore, no amount should be refunded. 11. We have heard learned counsel for the parties and a number of decisions have been cited. 12. In IFB Industries Limited v. State of Kerala (2012) 4 SCC 618 ), the issue was with regard to the definition of turnover. This court held that to take the benefit of trade discount and to make it eligible for exemption, all that the assessee is required to prove was that the purchaser had paid only the sum originally charged less the discount and that this should be a regular practice in the trade. 13. Reliance has also been placed on the judgment of the Gujarat High Court in ONGC v. State of Gujarat (2014 SCC Online Guj 15385 (Tax Appeal No. 50 of 2014), wherein in similar circumstances, it was held that the discount does not form part of the sale price. A similar view was taken by the Madhya Pradesh High Court in Gail India Ltd. v. State of M.P. (2014) 72, VST 161). The facts of this case were that the petitioner company GAIL, a Public Sector Undertaking, was doing business of supply of various petroleum products including LPG. The price of LPG and kerosene was regulated and controlled by the Public Planning and Analysis Cell (PPAC). The assessee supplied LPG to the oil companies on the basis of provisional price and final bill invoice was issued after the price was settled by the PPAC and credit note or debit note was issued. The High Court after referring to the judgment of this Court in IFB Industries Ltd. (supra), held that both the provisional price and the final price are controlled by the PPAC. The change in sale price is due to the direction by the PPAC and is not within the control of the assessee. It held that even though the credit note may have been issued on the basis of the provisional price, the price to be taken into consideration for calculating the turnover and the sale price must be the actual price received by the assessee.14. Learned counsel for the respondent has relied upon a judgment of this Court in the case of MRF Ltd. v. Collector of Central Excise, Madras (1997) 5 SCC 104). We are of the opinion that this judgment has no relevance to this case since it is a judgment arising out of the Excise Act where the tax is attracted the moment the goods are removed from the factory gate.15. In our view, a bare reading of Section 2(39) of the Rajasthan Sales Tax Act, which defines "sale price" clearly indicates that it is the price which is either paid or payable to a dealer as consideration for the sale. The definition itself makes it clear that any sum by way of any discount or rebate according to the practice normally prevailing in the trade shall be deducted and shall not be included in the sale price. The definition of turnover means the aggregate amount received or receivable by a dealer.16. In the instant case, when the orders were placed with the assessee, the price was not finalized by the MoP & NG. There was a clear cut stipulation in the purchase order that the price of Rs.682/is only a provisional price subject to review and it was clearly understood by the parties that the final price applicable after 01.07.1999 will be the price as approved by the MoP & NG. Therefore, though the assessee may have received Rs.682/per cylinder, it was under a legal obligation only to receive that price which was fixed by the MoP & NG. This price could have been higher than Rs.682/per cylinder, in which event the assessee would have had to collect and deposit with the Rajasthan Sales Tax Department sales tax on the excess amount. However, since the price of the cylinder has been reduced, the assessee cannot charge more than the price fixed, is bound to refund the excess amount collected and is therefore legally entitled to get refund of the tax paid on the excess amount.17. We may also note that it is undisputed that the assessee had to refund the amount of Rs.37/per cylinder to the oil companies. Therefore, what it has actually received is only Rs.645/per cylinder. What was legally receivable by it was the amount to be finally fixed by the MoP & NG i.e. Rs. 645/per cylinder. In the supply order only a provisional price was fixed. We have also taken into consideration the fact that the price fixation is not in the hands of the assessee. It is not even in the hands of the oil companies. The price is fixed by the MoP & NG and in such an eventuality, the amount actually payable is the amount to be fixed by the MoP & NG and that is also the amount which the assessee is legally entitled to receive.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]14. Learned counsel for the respondent has relied upon a judgment of this Court in the case of MRF Ltd. v. Collector of Central Excise, Madras (1997) 5 SCC 104). We are of the opinion that this judgment has no relevance to this case since it is a judgment arising out of the Excise Act where the tax is attracted the moment the goods are removed from the factory gate.15. In our view, a bare reading of Section 2(39) of the Rajasthan Sales Tax Act, which defines "sale price" clearly indicates that it is the price which is either paid or payable to a dealer as consideration for the sale. The definition itself makes it clear that any sum by way of any discount or rebate according to the practice normally prevailing in the trade shall be deducted and shall not be included in the sale price. The definition of turnover means the aggregate amount received or receivable by a dealer.16. In the instant case, when the orders were placed with the assessee, the price was not finalized by the MoP & NG. There was a clear cut stipulation in the purchase order that the price of Rs.682/is only a provisional price subject to review and it was clearly understood by the parties that the final price applicable after 01.07.1999 will be the price as approved by the MoP & NG. Therefore, though the assessee may have received Rs.682/per cylinder, it was under a legal obligation only to receive that price which was fixed by the MoP & NG. This price could have been higher than Rs.682/per cylinder, in which event the assessee would have had to collect and deposit with the Rajasthan Sales Tax Department sales tax on the excess amount. However, since the price of the cylinder has been reduced, the assessee cannot charge more than the price fixed, is bound to refund the excess amount collected and is therefore legally entitled to get refund of the tax paid on the excess amount.17. We may also note that it is undisputed that the assessee had to refund the amount of Rs.37/per cylinder to the oil companies. Therefore, what it has actually received is only Rs.645/per cylinder. What was legally receivable by it was the amount to be finally fixed by the MoP & NG i.e. Rs. 645/per cylinder. In the supply order only a provisional price was fixed. We have also taken into consideration the fact that the price fixation is not in the hands of the assessee. It is not even in the hands of the oil companies. The price is fixed by the MoP & NG and in such an eventuality, the amount actually payable is the amount to be fixed by the MoP & NG and that is also the amount which the assessee is legally entitled to receive.