The transaction of replacing the defective parts did not fall within the definition of "sale" as defined under section 2(38) of the Rajasthan Sales Tax Act and since the facts of the case are distinguishable from the facts obtaining before the honourable Supreme Court in Mohd. Ekram's case [2004] 136 STC 515; [2004] 6 SCC 183; AIR 2004 SC 3965, the assessing authority was not justified in imposing tax much less interest and penalty upon the assessee and, therefore, the Tax Board was correct in setting aside the imposition of tax and also upholding the deletion of interest and penalty by the first appellate authority.

DR. VINEET KOTHARI, J. - These revision petitions have been filed by the Revenue under section 86 of the Rajasthan Sales Tax Act, 1994 (hereinafter referred to as, "the Act of 1994") being aggrieved by the order of the Rajasthan Tax Board, Ajmer dated June 18, 2007, whereby, the Tax Board decided a batch of six appeals filed by the assessee and another batch of six appeals filed by the Revenue. These cross-appeals arose out of the order of first appellate authority - Deputy Commissioner (Appeals), Jodhpur, dated July 22, 2006, whereby, the Deputy Commissioner (Appeals) upheld the levy of tax upon the assessee, whereas, set aside the levy of interest and penalty imposed by the assessing authority under section 65 of the Act. So far as levy of tax was upheld, the assessee was aggrieved and, therefore, it preferred six appeals for six different assessment years, namely, assessment years 2000-01, 2001-02, 2002-03, 2003-04, 2004-2005 and 2005-2006. As far as levy of interest and penalty is concerned, since the first appellate authority had set aside the same, the Revenue preferred another batch of six appeals and these 12 appeals came to be disposed of by a common judgment of the Tax Board dated June 18, 2007. It may also be stated that the assessment orders for the assessment year 2000-01 to 2003-04 were passed by the assessing authority by invoking the power of reassessment under section 30 of the Act to impose tax on turnover having escaped assessment, whereas, for assessment years 2004-05 and 2005-06 said assessment was framed under section 28 of the Act.

The issue which arises for consideration by this court in the present revision petitions is as to whether the assessing authority could impose tax on the assessee, a dealer of Tata vehicles, on the value of credit notes issued by the manufacturer, M/s. Tata Motors, for defective parts of cars and other vehicles supplied by the assessee, a dealer of the manufacturer under a warranty agreement between the manufacturer and the ultimate customer to whom such vehicles are sold by the assessee. The sole reason on which such tax was imposed by the assessing authority for three years by invoking the reassessment power under section 30 of the Act though the original assessment was framed without imposition of tax and for later two years in regular assessment proceedings under section 28 of the Act is that such levy of tax was upheld by the Supreme Court in case of Mohd. Ekram Khan & Sons v. Commissioner of Trade Tax, U.P., Lucknow [2004] 136 STC 515; [2004] 6 SCC 183; AIR 2004 SC 3965.

Mr. Vinit Kumar Mathur, learned counsel appearing for the Revenue urged that the assessing authority as well as the first appellate authority were justified in upholding the imposition of tax on such consideration received by the assessee - dealer from the manufacturer, M/s. Tata Motors, in the form of credit notes on account of replacement of defective parts of vehicles on the basis of the Supreme Court decision in the case of Mohd. Ekram case [2004] 136 STC 515; [2004] 6 SCC 183; AIR 2004 SC 3965 and Tax Board has fallen into error in setting aside such levy of tax distinguishing the case of the assessee from the one involved before the Supreme Court in Mohd. Ekram case [2004] 136 STC 515; [2004] 6 SCC 183; AIR 2004 SC 3965 and, therefore, revision petitions filed by the Revenue deserve to be allowed and such levy of tax deserves to be restored along with interest and penalty imposed by the assessing authority, which was wrongly set aside by the first appellate authority as well as Tax Board. He emphatically relied upon the decision of the Supreme Court in case of Mohd. Ekram [2004] 136 STC 515; [2004] 6 SCC 183; AIR 2004 SC 3965.

Per contra, Mr. R. P. Bhatt, senior advocate assisted by Mr. Vikas Balia submitted that the judgment of the Supreme Court in Mohd. Ekram's case [2004] 136 STC 515; [2004] 6 SCC 183; AIR 2004 SC 3965 was not applicable to the facts of the present case and, therefore,