shows recovery of depreciation from security deposit at the time of refund of security on return of the used deep freezer by the distributor. Appellant has not stated wherefrom these deep freezers are sourced and what is the nature of transactions so far done such as the number of deep freezers supplied, amount collected towards security and refunds given against return of the equipment. However, what we feel is that since deep freezer is required for storage of Ice creams marketed by the appellant, appellant is entitled to supply free of cost the equipment to the distributor. So far as incidence of tax is concerned i.e. by way of recovery of depreciation, whether it be towards sale consideration or towards meeting cost of wear and tear in the form of depreciation on account of diminution in value, it is for the Assessing Officer to consider whether there is any tax effect under the KVAT Act and if so, to collect the same. We dispose of the Writ Appeal by modifying the judgment of the learned Single Judge with direction to the Assessing Officer to issue delivery note to the appellant after conducting enquiry and by imposing conditions including collection of tax, if liable for the supplies made. The appellant should be given opportunity to produce
