Hon’ble Surya Prakash Kesarwani, J.—Heard Sri B.K. Pandey, learned Standing Counsel for the revisionist and Sri M.M. Rai, learned counsel for the respondent.

2. This revision filed under Section 58 of the U.P. VAT Act, 2008 challenging the order dated 1.12.2014 in Second Appeal No. 183 of 2014 (2009-10) passed by the Member, Commercial Tax Tribunal, Aligarh Bench, Aligarh.

3. Learned counsel for the parties were heard at length on 2.12.2016 and their submissions were noted and certain queries were made as under:

“Heard Sri Nimai Das, learned counsel for the revisionist and Sri M.M. Rai, learned counsel for the respondent.

Learned counsel for the revisionist submits that the respondent has sold the parts to customers for consideration and the consideration on behalf of customers was paid by the manufacturer company in the form of credit notes. Thus all the ingredients of sale namely transfer of property in goods by the respondent-assessee to the customer for valuable consideration are present in the transaction and therefore, the transaction is clearly a sale within the meaning of Section 2(ac) of the U.P. VAT Act, 2008. He supports the assessment order and relies upon a decision of Hon’ble Supreme Court in the case of Mohd. Ekram Khan and Sons v. CTT, 2004 UPTC 1198 (pr 6) as well as the judgment of Bombay High Court in Navnit Motors PVt. Ltd. v. State of Maharashtra, 2012 (Vol. 47) VST 511.

Sri M.M. Rai, learned counsel for the respondent submits that the relationship between respondent-assessee and the manufacturer is that of Principal to Principal and not as Principal and Agent. He relied upon a decision of Rajasthan High Court in the case of C.T.O. (AE) Jodhpur v. Marudhara Motors, Jodhpur, 2010 NTN (Vol. 42) 205 (Pr 20, 22, 23 and 26).

On a specific query put to Mr. M.M. Rai, that what was the nature of transaction between respondent-assessee and the customer and what was the relationship between them, he states that relationship between the respondent-assessee and the customer is of Seller and Purchaser but nature of transaction is not sale within the meaning of Section 2(ac) of the Act in the absence of any consideration. He further submits that the credit note given by the manufacturer to the respondent-assessee is in the nature of reimbursement of the amount paid earlier for the purchases of spare parts and therefore, credit notes are not consideration for parts given to the customers by the assessee by way of replacement free of cost.

On a further query by the Court that when it is admitted as afore-noted that the relationship between the respondent-assess and the customer is of seller and purchaser then how it can be said that there was no sale, Sri M.M. Rai, stated that the parts were given by the respondent assessee to the customer because of agency agreement between the respondent-assessee and the manufacturer for replacement by the respondent-assessee which is reimbursed by the manufacturer through credit notes.

After the arguments were concluded and the statement made by learned counsel for the respondent-assessee was noted as above, learned counsel for the respondent-assessee prays that three days’ time may be granted to obtain further instruction from the respondent-assessee.

As prayed, put up on 8.12.2016.”

4. Today Sri M.M. Rai, learned counsel for the respondent stated that he has obtained instructions from the assessee and under his instructions he is submitting the written submission dated 8.12.2016 which is reproduced below:

Written Submission of the respondent:

“The above mentioned Commercial Tax Revision filed by the Revenue was heard on 1st and 2nd December 2016 by his Lordship and after hearing the parties, his Lordship had directed to clarify the stand on two issues, namely, as to what is the relationship between the respondent and the persons to whom the defective motor parts during the warranty period had been replaced and secondly, the credit note given by the manufacturer i.e. M/s. Tata