(1) Adjustments as provided under this section shall be made where, in relation to a sale of taxable goods by any registered dealer,-

(a) the sale has been cancelled; or

(b) the nature of that sale has been fundamentally varied or altered, resulting in a change in the rate of tax applicable to that sale; or

(c) Omitted w.e.f. 19-9-2014; or

(d) the goods or part of the goods sold have been returned to the seller within six months from the date of sale,

and as a result of the occurrence of any one or more of the above-mentioned events, if,

(i) the amount of tax shown as charged in the tax invoice issued by a seller in respect of such sale, becomes incorrect in relation to the amount of tax properly chargeable on that sale; or

(ii) the amount of output tax as accounted for and disclosed in the return filed by the dealer in respect of such sale, becomes incorrect in relation to the amount of tax properly chargeable on that sale.

(2) Where a seller has accounted for either in the tax invoice or in the return an incorrect amount of output tax as contemplated in sub-section (1), such seller shall make an adjustment in calculating the tax payable by him in the return for the tax period during which it has become apparent that the output tax is incorrect. Such adjustment shall be made in the following manner, namely:-

(a) if the output tax properly chargeable in relation to that sale exceeds the output tax actually accounted for by the seller, the amount of that excess shall be deemed to be tax charged by such seller in relation to a taxable sale attributable to the tax period in which the event referred to in sub-section (1) occurred, and shall not be attributable to any prior tax period; or

(b) if the output tax actually accounted for exceeds the output tax properly chargeable in relation to that sale, such seller shall reduce the amount of output tax, attributable to the tax period in which the event referred to in sub-section (1) occurred, in terms of section 10 by that excess amount of tax:

Provided that the said deduction shall not be made where the excess tax has been borne by a purchaser of goods, and unless the amount of the excess tax has been repaid by the seller to the purchaser, whether in cash or by way of a credit against any amount owing to the seller by the purchaser.

(3) Notwithstanding anything contained in this Act, if after issuing invoice, any amount is allowed by a selling dealer to a purchaser as cash discount or commission or trade discount or sales incentive or otherwise and such amount is adjusted through credit note issued by such selling dealer to the purchaser or by any other means , the selling dealer shall not be allowed to reduce his output tax liability on account of such deduction.