UNION OF INDlA vs BOMBAY TYRES INTERNATIONAL (P) LTD.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1983 Supreme(SC) 372

Supreme Court Of India
EN. BHAGWATI, AMARENDRA NATH SEN AND RANGANATH MISRA, JJ.
UNION OFJNDlA AND OTHERS - Appellants;
Versus
BOMBAY TYRES INTERNATIONAL (P) LTD. -Respondent.
Civil Appeals Nos. 2269 of 1980, 2619 of 1977,1097 of 1981 and 1244 of 1977 with SLP No. 6883 of 1981, CAs Nos. 1313 of 1981, 1373-76 of 1976, 307-10 of 1978, 885-90 of 1977, SLPs Nos. 4851-64 of 1977, CAs Nos. 569, 3330 of 1981, 1136 of 1977, 55-62 of 1979, 3319-20 of 1980, SLPs Nos. 4041, 6410 of 1981, 4019-20 of 1977, CAs Nos. 683-86 of 1977, 1723-26 of 1981, SLP No. 4588 of 1977, CAs Nos. 3262 of 1979, 428, 3509 of 1982, SLPs Nos. 5638 of 1979, 3972 of 1978, 6416 of 1981 and 9789 of 1980, CAs Nos. 1062-64 of 1977, 2642-50 of 1978, SLPs Nos. 6977 of 1981, CAs Nos. 642-45 of 1982, SLPs Nos. 6772 of 1981, CAs Nos. 736, 2458, 2460-61 of 1982, TCs Nos. 25 to 28, 18-19 of 1983, 79 to 83 of 1982, WPs Nos. 400 of 1977, 1685-91 of 1979, SLP No. 10794 of 1982, 4020 of 1976, CAs Nos. 1285 of 1976, 1307 of 1977, 50 of 1978, 2808 of 1979, 388, 1773 of 1981, 168, 3479 of 1982, SLP No. 2864 of 1981, CAs Nos. 1233-42 of 1981, 261, 502, 3214, 10198-200, 10202, 10204-06 of 1983, SLP (C) No. 6841 of 1982 and CA No. 2796 of 1979, decided on November 14/15, 1983

Headnote:
Civil Appeals - Nature of goods - Cost of insurance - Transportation of goods - Deductions - Trade discounts.-Discounts allowed in trade (by whatever name such discount is described) should be allowed to be deducted from the sale price having regard to the nature of the goods, if established under agreements or under terms of sale or by established practice, the allowance and the nature of the discount being known at or prior to the removal of the goods – Held, It is clarified that the cost of insurance mentioned in the judgment as part of the cost of transportation which is to be included as a deduction is the transit transport insurance covering transportation of the goods d from the factory gate to the place or places of delivery – Order accordingly.

ORDER

1. SLP Civil No. 6841 of 1982 is dismissed as far as it is directed against the interlocutory order only.

2. CA No. 2796 of 1979 is stated to have already been disposed of.

3. As a result of further arguments in regard to certain specific matters on which our judgment dated 7-10-1983t was not specific we pass the following:

(1) Trade discounts.-Discounts allowed in the trade (by whatever name such discount is described) should be allowed to be deducted from the sale price having regard to the nature of the goods, if established under agreements or under terms of sale or by established practice, the allowance and the nature of the discount being known at or prior to the removal of the goods. Such trade discounts shall not be disallowed only b because they are not payable at the time of each invoice or deducted from the invoice price.

(2) Taxes.-Additional sales tax, surcharge on sales tax and turnover tax should be allowed to be deducted from the sale price in order to arrive at the assessable value, and also octroi where payable/paid by the c manufacturer. These taxes if proved to have been paid, should be allowed even if they are paid periodically to the relevant taxing authorities in accordance with the relevant provisions of taxing statutes/rules.

(3) It is clarified that the cost of insurance mentioned in the judgment as part of the cost of transportation which is to be included as a deduction is the transit transport insurance covering transportation of the goods d from the factory gate to the place or places of delivery.

(4) Where a company has more than one factory located at different places and the prices at the depots is the same irrespective of the lack of identification of the goods from a particular factory of production, the deductions as set out in this judgment and as explained in this order shall e be computed and allowed on the basis of such price.

(5) This order shall be by way of clarification of the judgment delivered on 7-10-1983t.

(6) The matters shall also be listed on 18-11-1983 and shall be heard in the Court at 2 p.m.

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