GEOFFREY MANNERS & COMPANY LIMITED Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THE short point that arises for adjudication in this appeal is:

(2.) M /s. Geoffrey Manners and Company Limited, Hyderabad a Limited Company with Head office at Mumbai has a sales promotion branch office in Andhra Pradesh (for short, 'the appellant'). The said appellant received certain stocks of medicines from its Head office and branches situated outside Andhra Pradesh for sale. Under instructions of the Head office the appellant offered a free offer scheme without separate sale value shown in the invoice. By the said scheme the appellant offered free of charge certain quantity of medicines against the quantity of same medicines for which money consideration is received. The Commercial Tax Officer, Agapura Circle, (for short, 'the assessing authority') subjected the impugned turnover of Rs. 24,28,921/ - to tax of Rs. 3,79,853/ - holding that "legitimate tax on free/bonus stocks is not forthcoming to the State exchequer". Aggrieved, the appellant challenged the levy in appeal before the Appellate Deputy Commissioner (CT)., Secunderabad who dismissed the appeal on the ground that the value of 'free sales' is not included in the value of medicines as evidenced by the sale invoices. Aggrieved again the appellant prefers this appeal before us.

(3.) IT is contended by the learned Counsel for the appellant that the appellant did not receive money consideration in respect of free supplies. He has filed copies of sale invoices to support his contention. It is seen from the sale invoices that for the quantity of sale of (WYOMOX DRY POWDER 60 ML and 30 ML, WYOMOX DISTAB 250 MG 10 X10, PLASTULES B -12 300) equal quantity of medicine is supplied to it without any money consideration. Under Column 'Rate of tax' it is shown as 'free' and under Column 'Amount', no money is charged. The invoice amount charged by the appellant is for the entire quantity inclusive of free supplies. In support of the contention, the learned Counsel placed reliance on this Tribunal's decision rendered in T.A. No. 69/1978, dated 13.11.1978 in the case between M/s. Rama Krishna Medical Agencies, Tuni v. State of Andhra Pradesh. In the said case also "free units' of medicines are involved. We have perused the said order. We may extract relevant portion of that order which is as follows: