The allowance of rebate in accordance with the regular business practice is not assessable to tax as it falls under the definition of 'sale price' and is specifically deductible under the Central Sales Tax Act, 1956.

DR. A. S. ANAND, C.J.

The controversy in this tax revision case filed by the Revenue is rather limited. The assessment year in question is 1973-74. The controversy revolves around the dismissal of the enhancement petition filed by the Revenue for restoration of assessment on a turnover of Rs. 93, 249.41 allowed by the Appellate Assistant Commissioner as rebate eligible for exemption. The Tribunal, while dismissing the appeal by the assessee, on a turnover of Rs. 6, 340 assessed at 10 per cent. in the absence of proof towards consignment sales, also dismissed the enhancement petition filed by the Revenue for restoration of the assessment on the turnover of Rs. 93, 249.41. The Tribunal held that the rebate allowed in the course of business was not liable to be taxed as it could not be said to form part of the sale price. In taking this view, the Tribunal had been influenced by the judgments rendered in State of Tamil Nadu v. Poly-ene General Industries 1977 (39) STC 254 (Mad.) and Deputy Commissioner (C.T.) v. South India Viscose Ltd. 1977 (6) CTR 505, 1977 (40) STC 442 (Mad.). At the time when the tax case revision was filed by the Revenue it was submitted before the Bench that the Revenue had preferred T.C. (R) No. 319 of 1979 on an identical question as is involved in this tax case revision. We are, however, informed at the Bar that a Division Bench of this Court dismissed T.C. (R) No. 319 of 1979 by order dated September 11, 1989. Though, ordinarily, that would have relieved us of any need to say anything further, we find there is a little confusion which may require a slight clarification at our hands.

2. There is no dispute that allowance of rebate in accordance with the regular business practice is not assessable to tax inasmuch as cash discount is specifically deductible under the Central Sales Tax Act, 1956

"In this Act, unless the context otherwise requires, 'sale price' means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or the cost of installation in cases where such cost is separately charged."

On a plain reading, it shows that the sale price would mean the amount payable to the dealer as consideration for sale of any goods less the cash discount allowed according to the practice normally prevailing in the trade. Thus, it is only a deduction from the sale consideration of amount of "cash discount" which alone is specifically contemplated in the definition of "sale price" by section2(h) of the Central Sales Tax Act, 1956 1980 (46) STC 220 a Bench of this Court also took the view that even if a discount allowed does not fall strictly within the concept of cash discount as contemplated under section2(h) of the Act, still the amount is capable of adjustment in the sales tax assessment provided it goes to vary the price payable in respect of the goods. That was a case also where the assessee claimed exemption in respect of the rebate given to the dealers. That judgment fortifies the view that we have taken.

3. Thus, in view of what we have said, we find that the view taken by the Tribunal dismissing the enhancement petition on the ground that the turnover of Rs. 93, 249.41 being the rebate was not liable to tax is proper and sound. The tax revision case, therefore, fails and is dismissed, but without any orders as to costs.