In Reference vs M/S B.P.L. Limited
2022 Latest Caselaw 15560 MP

                                                 1
                              IN THE HIGH COURT OF MADHYA PRADESH
                                           AT JABALPUR
                                                  BEFORE
                                     HON'BLE SHRI JUSTICE SHEEL NAGU
                                                     &
                                   HON'BLE SHRI JUSTICE VIRENDER SINGH
                                       ON THE 25th OF NOVEMBER, 2022

                                              TR-00004-2018

                           BETWEEN:-
                           (IN REFERENCE

                                                                         .....PETITIONER
                           (BY SHRI A. D. BAJPAI, GOVT. ADVOCATE)

                           AND
                           M/S B.P.L. LTD. BHOPAL (MADHYA PRADESH)

                                                                       .....RESPONDENTS
                           (BY SHRI SUMIT NEMA, SENIOR ADVOCATE WITH SHRI AYUSH
                           GUPTA, ADVOCATE)

                                      TAX REFERENCE No. 3 of 2018

                           BETWEEN:-
                           (IN REFERENCE

                                                                         .....PETITIONER
                           (BY SHRI A. D. BAJPAI, GOVT. ADVOCATE)

                           AND
                           M/S B.P.L. LTD. BHOPAL (MADHYA PRADESH)




                                                                       .....RESPONDENTS
                           (BY SHRI SUMIT NEMA, SENIOR ADVOCATE WITH SHRI AYUSH
                           GUPTA, ADVOCATE)

                                      TAX REFERENCE No. 4 of 2018


Signature Not Verified
Signed by: SHIBA NARAYAN
BISWAL
Signing time: 11/29/2022
6:35:30 PM
                                                  2
                           BETWEEN:-
                           (IN REFERENCE

                                                                       .....PETITIONER
                           (BY SHRI A. D. BAJPAI, GOVT. ADVOCATE)

                           AND
                           M/S B.P.L. LTD. BHOPAL (MADHYA PRADESH)




                                                                     .....RESPONDENTS
                           (BY SHRI SUMIT NEMA, SENIOR ADVOCATE WITH SHRI AYUSH
                           GUPTA, ADVOCATE)

                                     TAX REFERENCE No. 21 of 2018

                           BETWEEN:-
                           (IN REFERENCE

                                                                       .....PETITIONER
                           (BY SHRI A. D. BAJPAI, GOVT. ADVOCATE)

                           AND
                           M/S B.P.L. LTD. BHOPAL (MADHYA PRADESH)




                                                                     .....RESPONDENTS
                           (BY SHRI SUMIT NEMA, SENIOR ADVOCATE WITH SHRI AYUSH
                           GUPTA, ADVOCATE)

                                     TAX REFERENCE No. 22 of 2018

                           BETWEEN:-
                           (IN REFERENCE

                                                                       .....PETITIONER
                           (BY SHRI A. D. BAJPAI, GOVT. ADVOCATE)

                           AND
                           M/S B.P.L. LTD. BHOPAL (MADHYA PRADESH)
Signature Not Verified
Signed by: SHIBA NARAYAN
BISWAL
Signing time: 11/29/2022
6:35:30 PM
                                                           3


                                                                                  .....RESPONDENTS
                                   (BY SHRI SUMIT NEMA, SENIOR ADVOCATE WITH SHRI AYUSH
                                   GUPTA, ADVOCATE)

                                               TAX REFERENCE No. 1 of 2022

                                   BETWEEN:-
                                   (IN REFERENCE

                                                                                    .....PETITIONER
                                   (BY SHRI A. D. BAJPAI, GOVT. ADVOCATE)

                                   AND
                                   M/S B.P.L. LTD. BHOPAL (MADHYA PRADESH)




                                                                                  .....RESPONDENTS
                                   (BY SHRI SUMIT NEMA, SENIOR ADVOCATE WITH SHRI AYUSH
                                   GUPTA, ADVOCATE)

                                 Th is appeal coming on for admission this day, JUSTICE SHEEL
                           NAGU passed the following:
                                                           ORDER

These tax references have been made by the Board raising following questions of law:

1. Whether the order passed by the Appellate Board in holding that discount allowed to retailers as per ordinary trade practice of the appellant by way of credit notes as not deductable from sale price is perverse in law and on facts and contrary to the decision of the Supreme Court in IFB Industries Vs. State of Kerala (2012) 20 STJ 285 ?

2. Whether under the facts and circumstances of the case, the Appellate Board is justified in rejecting the appeal of the appellant without considering documentary evidences demonstrating that bulk discount is in fact a cash discount which is allowed to its traders in ordinary course of trade and is in fact an ordinary trade practice ?

Signature Not Verified Signed by: SHIBA NARAYAN BISWAL Signing time: 11/29/2022 6:35:30 PM

3. Whether the order of the Appellant Board is perverse and vitiated in law and on facts ?

Shri Sumit Nema, learned senior counsel along with Shri Ayush Gupta, learned counsel for respondent fairly informed that the said question No.1 has already been answered in favour of the assessee vide order dated 27.01.2014 by the Division Bench of this Court in. BPL Ltd Vs. Assistant Commissioner, Commercial Tax, Bhopal Division - 1 Bhopal reported in (2014) 46 taxmann.com 211 (M.P.) . The relevant extract of the said judgment is reproduced hereinbelow:

Shri.Mukesh Agrawal, learned counsel for the appellant.

Smt. Nirmala Nayak, learned Govt. Advocate for the respondents.

This appeal was admitted on 18.7.2012 for considering the following substantial questions of law :-

"Whether the order passed by the Board in holding that discount allowed to retailers as per ordinary trade practice of the appellant by way of credit notes as not deductable from sale price is perverse in law and on facts and contrary to the decision of the Supreme Court in IFB Industries Ltd. Vs. State of Kerala (2012) 20 STJ 285 ?"

Appellant herein was assessed for tax under the Commercial Tax Law for assessment year 2002-2003 and the only question involved in this appeal is as to whether the discount allowed by the appellant herein a retail dealer as per Ordinary trade practice by way of credit note cannot be subjected to deduction from the sale price of the vehicle or not ?

It was the case of the revenue that without indicating the rebate or discount granted in the vouchers and sale document no deduction from the amount of the sale price is permissible. It has been held by the Revenue that the discount claimed for cannot be granted as they are neither indicated in the vouchers or bills issued to the parties who Signature Not Verified Signed by: SHIBA NARAYAN BISWAL Signing time: 11/29/2022 6:35:30 PM

have purchased the items whereas, it was the case of the appellant that the grant of discount being an admitted position even without there being disclosure in the voucher and bills the same are permissible.

Even though various grounds are raised in this VAT appeal, the question stands decided by the Supreme Court in the case of IFB Industries Ltd. Vs. State of Kerala - [2012] 49 VST 1. It has been held by the Hon'ble Supreme Court in the aforesaid case that discount through credit note issued even subsequent to a sale without their mention in the sale voucher of the bill is permissible. It has been held that claim for deduction of the amount of trade discount cannot be disallowed only on the ground that the discount amount were not shown in the sale invoice or the bills issued. The Supreme Court has held that once allowing of discount is established from the material available on record, the same has to be allowed.

Even though in the return respondents by relying upon the judgment rendered in the case of Dy. Commissioner Sales Tax (Law) Vs. Advani Oerlikon (P) Ltd. (1980) 45 STC 32 (SC) have tried to justify their action but in the case of IFB Industries Ltd. (supra) judgment in the case of Advani Oerlikon Pvt. Ltd. (supra) has been explained in para 30 and thereafter a decision taken. In view of law laid down in the judgment of IFB Industries Ltd. (supra), the question of law is answered by holding that the appellants are entitled to deduction claimed for with regard to the discount allowed by them as a retailer based on ordinary trade practice by way of issuing credit note even without showing the same in the sale invoice or the bill.

Accordingly, the amount, if any recovered towards tax on this count be now refunded back to the appellant if already recovered.

With the aforesaid, this appeal stands allowed and disposed of.

In view of question No.1 having been answered in favour of assessee, the

Signature Not Verified Signed by: SHIBA NARAYAN BISWAL Signing time: 11/29/2022 6:35:30 PM

consequential question Nos.2 & 3 have become infructuous and thus need no answer.

All the Tax References stand disposed of.

                              SHEEL NAGU)                                       (VIRENDER SINGH)
                                 JUDGE                                               JUDGE
                           Biswal




Signature Not Verified
Signed by: SHIBA NARAYAN
BISWAL
Signing time: 11/29/2022
6:35:30 PM