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Facts
The department challenged the orders of Rajasthan Tax Board, passed on December 5, 2002 holding that optional service/warranty charges were not included in the price of the goods sold (refrigerators) as they do not constitute a part of the sale price. The Rajasthan Tax Board has held that such charges paid by a customer to a dealer would not be liable to attract levy of tax under the Rajasthan Sales Tax Act, 1994.
Held
The Tax Board has held that the charges levied on account of after sales service/warranty were optional. There was enough material before the Tax Board to hold that the charge levied by the assessee towards service/warranty charges at the time of the sale was not universal but optional. Following this finding the legal consequences would be inexorable and entail exclusion of such charges from the ambit of sale price of the goods being post sale. Accordingly, the High Court dismissed the petition filed by the department.
