Rajasthan Sales Tax Act, 1994: ss.2(39), 2(44) – Refund of sales tax – Appellant-assessee manufacturer of cylinders for storage of LPG supplied the entire production to Government owned companies – The cost of the cylinders was to be determined by the Ministry of Petroleum and Natural Gas (MOP & NG) under the pricing policy – IOC placed an order for supply stating in the supply order to charge a provisional price of Rs.682 per unit and that pricing formula was under review by the Government and the final prices applicable after 1.7.1999 would be only as per approval of MOP & NG – Accordingly appellant-assessee supplied the cylinders – On 31.10.2000, IOC sent letter to appellant that after review of the prices, cylinders have again been provisionally revised to Rs.645 per unit w.e.f 1.7.1999 – Thereafter oil companies deducted/adjusted excess payment of Rs.37 and proportionate sales tax thereon from the payments due to the assessee – Claim for refund of sales tax on the excess amount of Rs.37 – Entitlement for – Held: s.2(39) defines “sale price” as a price which is either paid or payable to a dealer as consideration for sale – The definition itself makes it clear that any sum by way of any discount or rebate according to the practice normally prevailing in the trade would be deducted and not be included in the sale price – The definition of ‘turnover’ means the aggregate amount received or receivable by a dealer – In the instant case, when the orders were placed with the assessee, the price was not finalized – There was a clear cut stipulation in the purchase order that price of Rs.682/- was only a provisional subject to review and the final price applicable after 01.07.1999 would be the price as approved by the MoP & NG – Therefore, though the assessee may have received Rs.682 per cylinder, it was under a legal obligation only to receive that price which was fixed by the MoP & NG – Assessee had to refund the amount of Rs.37/- per cylinder to the oil companies – Therefore, it actually received only Rs.645 per cylinder – The price fixation is not in the hands of the assessee – It is not even in the hands of the oil companies – The price is fixed by the MoP & NG and in such an eventuality, the amount actually payable is the amount to be fixed by the MoP & NG and that is also the amount which the assessee is legally entitled to receive – The assessee is entitled to refund of the amount of sales tax paid on the excess amount.
Allowing the appeals, the Court
HELD: It is undisputed that the assessee had to refund the amount of Rs.37/- per cylinder to the oil companies. Therefore, what it has actually received is only Rs.645/- per cylinder. What was legally receivable by it was the amount to be finally fixed by the MoP & NG i.e. Rs. 645/- per cylinder. In the supply order only a provisional price was fixed. The price fixation is not in the hands of the assessee. It is not even in the hands of the oil companies. The price is fixed by the MoP & NG and in such an eventuality, the amount actually payable is the amount to be fixed by the MoP & NG and that is also the amount which the assessee is legally entitled to receive. The assessee shall be refunded the amount of sales tax paid on the excess amount. The order of the Deputy Commissioner is restored. [Paras 17, 18] [514-B, D]
IFB Industries Limited v. State of Kerala [2012] 4 SCR
802 : 2012 (4) SCC 618; ONGC v. State of Gujarat 2014 SCC Online Guj 15385; Gail India Ltd. v. State of M.P. (2014) 72 VST 161; MRF Ltd. v. Collector of Central Excise, Madras (1997) 5 SCC 104 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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