Prakash Krishna, J. - (1.) The present revision is directed against the order dated August 24, 1991 passed by the Sales Tax Tribunal, Ghaziabad, in Second Appeal No. 554 of 1985 for the assessment year 1981-82. It manufactures refrigerators and its parts. Factory is situate at Faridabad. The manufactured goods are brought to Ghaziabad Sales Depot. The only dispute in the present revision is regarding addition of Rs. 39,18,175 in the turnover of the assessee. The assessing authority included this amount in the taxable turnover of the dealer-opposite party on the ground that the same was towards the warranty charges. It rejected the claim of the dealer-opposite party that the warranty charges were optional and therefore it is not part of turnover. The assessing authority recorded a finding that the case of the dealer that it is open to the customers to pay Rs. 300 to Rs. 385 per fridge towards warranty charges. The dealer-opposite party provides warranty for a period of one year and it charges Rs. 300 to Rs. 385 per fridge for the additional warranty provided for a period of four years after the expiry of the period of one year of the warranty.
(2.) The first appellate authority as well as the Tribunal have held that the said amount is towards the service contract and is realised after one year of the sale of the fridge and is optional.
(3.) Heard the counsel for the parties and perused the record. Following two questions of law have been framed: (1) Whether the Sales Tax Tribunal was legally justified to hold that warranty charged by the dealer from the customers is not a part of taxable turnover despite the fact that Section 2(i) of the U.P. Sales Tax Act, 1948 indicates otherwise ? (2) Whether on the facts and in the circumstances of the case the Sales Tax Tribunal was legally justified to hold that warranty charged by the opposite party dealer from the customers is not a part of taxable turnover ignoring the fact that in the case of Commissioner of Sales Tax, Delhi Administration v. Prem Nath Motors (P.) Ltd. ILR1978 Delhi 273 , [1979 ]43 STC52 (Delhi ), such charges were held to be a part of sale price ?;