C. N. Ramachandran Nair :-

This revision is filed against the order of the VAT Appellate Tribunal upholding the addition of incentive received by the petitioner from the manufacturer in the form of credit notes as turnover under Explanation VII to section 2(lii) of the Kerala Value Added Tax Act, 2003. We have heard senior counsel Dr. Muhamed Kutty appearing for the revision petitioner and Sri Mohammed Rafiq, Government Pleader appearing for the respondent.

The revision petitioner is a dealer in ceramic tiles, vitrified tiles, sanitary items, etc. During the year 2005-06, the revision petitioner received an amount of Rs. 21,65,301 in the form of credit notes from the manufacturer - company whose distributor the petitioner was. On examination of the returns and accounts, the assessing officer noticed that tiles purchased by the petitioner from outside the State were sold at less than the purchase price and the amount received through credit notes from the manufacturer was towards differential price assessable as turnover under Explanation VII to section 2(lii) of the Act. He therefore added the entire amount received by the petitioner from the manufacturer through credit not