RAJES KUMAR,J. - (1.) Present revision under Section 11 of the U.P. Trade Tax Act, 1948 (hereinafter referred to as 'the Act') is directed against the order of the Tribunal dated March 2, 2000 relating to the assessment year 1996 -97.
(2.) THE applicant is a company incorporated under the Indian Companies Act, 1956. The applicant was engaged in the business of sophisticated cylindrical grinding machines. During the year under consideration the applicant had sold one such machine to M/s. Munjal Showa Limited, Gurgaon against bill No. 07, dated April 25, 1996 for Rs. 65,43,222. Against the aforesaid bill on the claim of the purchaser that the machine was not properly working and as a result of negotiations credit note for Rs. 14,29,900 was issued by the applicant in favour of M/s. Munjal Showa Limited, Gurgaon. The sale consideration was reduced by Rs. 14,29,900 and on the balance amount the liability of tax has been admitted. The assessing authority disallowed the claim of reduction of the sale consideration by Rs. 14,29,900 and had levied Central sales tax on the entire amount of bill for Rs. 65,43,222. The applicant had also sold one machine to M/s. Vengatachalam Engineering Works Private Limited, Salem (Tamil Nadu) and had despatched the same against challan No. 151, dated December 21, 1996. The applicant claimed that due to non -payment the machine was brought back on March 5, 1998. It was claimed that the delivery of the machine was not given to M/s. Vengatachalam Engineering Works Private Limited, Salem (Tamil Nadu) but was taken at Salem, by the agent of the applicant, who had kept the said machine in exhibition for sometime and, thereafter, on non -receipt of the payment, same was returned back. The applicant claimed that the sale was not completed and, therefore, on the value of the machine, the applicant was not liable for tax. The assessing authority had not accepted the plea of the applicant and had levied the tax on the value of the machine at Rs. 13,73,994. Being aggrieved by the assessment order, the applicant filed an appeal before the Deputy Commissioner (Appeals), Ghaziabad. The Deputy Commissioner (Appeals) vide order dated August 9, 1999 upheld the levy of tax on the aforesaid two transactions. Being aggrieved by the order, the applicant filed an appeal before the Tribunal. The Tribunal by the impugned order dismissed the appeal. Heard Sri Bharatji Agrawal, learned Senior Advocate assisted by Sri Piyush Agrawal, learned Counsel appearing for the applicant and Sri K. M. Sahai, learned Standing Counsel.
(3.) LEARNED Counsel for the applicant submitted that in respect of machine sold by the applicant to M/s. Munjal Showa Limited, Gurgaon the purchaser complained about its proper operation. As a result of negotiations between the parties, it was decided to reduce the price by 25 per cent being Rs. 14,29,900. As a result of which debit note was issued by M/s. Munjal Showa Limited, Gurgaon for Rs. 16,35,806, which included the principal amount of Rs. 14,29,900 and the amount of excise duty and Central sales tax thereon. On the receipt of debit note, applicant wrote a letter dated July 1, 1997 to M/s. Munjal Showa Limited, Gurgaon stating therein that the reduction of 25 per cent would be allowed only on principal amount and the amount of excise duty and Central sales tax for Rs. 2,05,906 would be considered for payment only after getting the same from Government department as the same have been deposited in the Government department and accordingly, credit note for Rs. 14,29,900 was issued on March 31, 1997. He submitted that credit note was issued reducing the price of the machine and it was not in the nature of rebate or discount or any kind of deduction. Thus, the sale price would be the sale price mentioned in the invoice, less Rs. 14,29,900 on which tax is payable. He submitted that the Tribunal and the authorities below have illegally levied the tax on the entire amount. In respect of the consignment of one grinding machine sent to M/s. Vengatachalam Engineering Works Private Limited, Salem (Tamil Nadu) vide challan No. 151, dated December 21, 1996, he submitted that only the machine was despatched to the said party. The delivery was taken by its agent, M/s. K.G.P. Technovators, Coimbatore, and the same was kept in exhibition and, thereafter, when M/s. Vengatachalam Engineering Works Private Limited, Salem (Tamil Nadu) could not make the payment, the same was returned back to the applicant. He submitted that at no stage machine was delivered to the so -called purchaser, the payment was not received and, therefore, sale was not completed. Since the sale was not completed, no tax could be levied.;