In Brief
Tata Motors and motor vehicle dealers challenged sales tax demands on free replacement parts supplied during warranty periods. The case involved consolidated appeals from dealers who received replacement parts free of cost but were assessed for sales tax when returning defective parts and receiving credit notes from manufacturers. The Supreme Court examined whether such warranty replacements constitute taxable sales. Rather than deciding on merits, the Court found the issue raised fundamental legal questions requiring larger Bench consideration, particularly regarding whether sales tax liability exists where the vehicle price includes replacement costs and the customer pays nothing for replacement parts. The matter was remanded to the Chief Justice for larger Bench constitution."
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