In Brief
Tata Motors challenged the levy of sales tax on free replacement parts supplied during the vehicle warranty period. The Supreme Court declined to decide the case on merits, finding the issue required larger bench consideration. The Court questioned whether sales tax is payable on parts replaced free of cost when the customer pays no consideration, the cost is included in the car's price, sales tax was already paid on the car and dealer's inventory, and only a credit note is issued. The Court expressed reservations about the binding precedent in Mohd. Ekram Khan & Sons and remitted the matter to a larger Bench for reconsideration.
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