State of Madras Vs. Dunlop Rubber Company (India) Limited - Court Judgment

Excerpt:
- orderveeraswami, j.1. the point relates to discount allowed to be deducted from the turnover. the tribunal took the view that the discount squarely falls within clause (iii) to explanation (2) of clause (r) to section 2 of the madras general sales tax act, 1959. we are in entire agreement with this conclusion. what is, however, argued for the revenue is that the discount was not allowed with reference to any particular sale or purchase, but as an incentive for prompt payment of the aggregate of price at the time of settlement. this does not impress us. the only relation between the parties to the transaction was that of vendor and purchaser and the discount allowed could not but be in relation to the sales. it makes no difference whether it was allowed in a lump sum or proportionately to each of the sales or purchases. in substance the character of the discount is the same. the petition is dismissed.

Judgment:
ORDER

Veeraswami, J.

1. The point relates to discount allowed to be deducted from the turnover. The Tribunal took the view that the discount squarely falls within Clause (iii) to explanation (2) of Clause (r) to Section 2 of the Madras General Sales Tax Act, 1959. We are in entire agreement with this conclusion. What is, however, argued for the revenue is that the discount was not allowed with reference to any particular sale or purchase, but as an incentive for prompt payment of the aggregate of price at the time of settlement. This does not impress us. The only relation between the parties to the transaction was that of vendor and purchaser and the discount allowed could not but be in relation to the sales. It makes no difference whether it was allowed in a lump sum or proportionately to each of the sales or purchases. In substance the character of the discount is the same. The petition is dismissed.