i.F.B. Industries Ltd. Vs. State of Kerala - Court Judgment

Excerpt:
- land acquisition act, 1894.[c.a. no. 1/1894]. section 49: [j.b.koshy, a.k.basheer & k.p. balachndran, jj] acquisition of part of house or building claim put forward by owner to acquire entire building held, option under section 49(1) is to be made by the owner of the house or building when part of the building is sought to be acquired. once the option is exercised, the collector has no option but to acquire the entire building or withdraw from the acquisition. he has no option to decide whether the option exercised by the owner is genuine or not and the tenant has no role in the same and tenant cannot file a writ petition if the collector accepts the request of the owner under section 49(1). if any question arises whether any land proposed to be taken under the act does or does not form part of the house or building, collector can refer the matter to the court and until decision is taken by the court, collector shall not take possession (second proviso). the reference to the court also is only to limit questions mentioned in second proviso. therefore, collector has no decision making power in this matter once the owner expresses the desire to acquire the entire building when part of the building is acquired. section 49(1) gives power to the owner whose house or building is partly acquired to express his desire to acquire the entire building. the right of option given under section 49(1) is only available to the owner and not anybody including any person interested or occupier tenant. the expression of opinion to acquire the entire building need not be in any particular form, but the expression of his desire should be clear for acquisition of the entire building. the above expression of opinion should be made before passing of the award. the owner of the building has a right to withdraw the option exercised before passing of the award. if the option of the owner to acquire the entire building as provided under section 49(1) is accepted by the land acquisition officer, tenant cannot challenge that decision. if the desire exercised by the owner to acquire the entire building is not acceptable, the only option for the land acquisition officer is to withdraw from the acquisition. -- section 49 (1): acquisition of whole of such house or manufactory or building meaning held, the words whole of such house or manufactory or building includes land in which it is situated. in other words, when entire building is acquired, the land in which the building is situated also has to be acquired by the government; if the owner expresses his opinion only to acquire the building materials excluding the land in which it is situated, it is not an option exercised under section 49(1). c.n. ramachandran nair, j.1. the question raised in the connected revisions filed by the petitioner for the assessment years 2001-02 and 2002-03 is whether the tribunal was justified in not considering the petitioner's claim for deduction of discount in the determination of taxable turnover. we have heard counsel appearing for the petitioner and government pleader appearing for the respondent.2. on going through the order of the tribunal we notice that the tribunal did not consider the claim because according to the tribunal the assessing officer allowed the claim while determining the taxable turnover. however, the tribunal has specifically stated that the amount claimed is scheme discount, allowability of which is not considered by the tribunal at all. the government pleader produced copies of returns filed by the petitioner which does not disclose any trade discount claimed as exempt by the petitioner. according to him scheme discount is not entitled to any deduction under rule 9(a) of the kerala general sales tax rules, 1963. counsel for the petitioner contended that the assessing officer in fact has made a statement in the assessment order that discount is allowed. however, in the computation portion he deducted the amount after adding the same amount! we notice that none of the authorities below has considered the nature of discount claimed by the petitioner in the revised return filed and it's eligibility for deduction. rule 9(a), relevant for the assessment years in question, is as follows:9. determination of taxable turnover.-in determining the taxable turnover, the amounts specified in the following clauses, shall subject to the conditions specified therein, be deducted from the total turnover of the dealer,:(a) all amounts allowed as discount, provided that such discount is allowed in accordance with the regular practice in the trade and provided also that the accounts show that the purchaser has paid only the sum originally charged less the discount...3. it is clear from the above provision that what is allowable as discount in the computation of taxable turnover is the trade discount given in the bills. what is insisted in the rule is that the purchaser has paid the price charged less the discount. this certainly means that original invoice discount should be shown and tax should be charged only on the net amount exclusive of discount so that the buyer gets the deduction towards discount. the petitioner is a manufacturer engaged in supply of goods in wholesale to distributors and dealers. sales are therefore first sales and discount if any given can only be trade margin to dealers. if tax is not to be charged on the dealer margin, then discount should be given in the invoice itself. if the petitioner has made sales in this way, then necessarily deduction should have been claimed in the monthly return itself as the taxable turnover does not cover discount/trade margin given in the invoice. on the other hand, in the tribunal's order, what is referred to is scheme discount which is nothing but incentives given by manufacturers, and wholesalers to dealers, may be for seasonal sales or may be for annual sales. such incentives are normally given by credit note at the end of the season or at the end of the year. these incentives given through credit notes are outside the scope of discount covered by rule 9(a) of the kgst rules.4. since facts are not considered by the assessing officer with reference to monthly returns and annual returns filed and copies of bills raised by the petitioner and credit notes issued, we feel an opportunity can be given to the petitioner to demonstrate before the assessing officer that discount given is of the kind allowable under rule 9(a) as discussed above.5. we therefore set aside the orders of the tribunal and that of the lower authorities pertaining to disallowance of discount alone and remand the matter to the assessing officer for verification of records and for allowing the claim to the extent permissible under law stated above.