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Allahabad High Court · body

2004 DIGILAW 2380 (ALL)

Commissioner, Trade Tax v. Ajudhiya Disttillery

2004-11-30

RAJES KUMAR

body2004
RAJES KUMAR, J. ( 1 ) PRESENT revision under Section 11 of the U. P. Trade Tax Act (hereinafter referred to as the "act" ) is directed against the order of the Tribunal dated 6 th October, 1994 relating to the assessment year, 1982-83. ( 2 ) DEALER/opposite party (hereinafter referred to as "dealer" ) was engaged in the business of indian Made Foreign Liquor (hereinafter referred to as "imfl" ). Books of account of the dealer was accepted and there is no dispute in this regard. The dispute relates to amount of excise duty amounting to Rs. 27,97,323/- for the period April, 1982 to December, 1982 paid by the purchaser as a part of the turnover or not The claim of the dealer was that in view of the Circular issued by the Excise Commissioner dated 19th March, 1982, business of IMFL has taken over by the State Government in his hands with effect from 1. 4. 1982 and the liquor which was to be sold to the Government, its price was to be informed, but the excise duty was not to be added. The claim of the dealer was that the liquor was sold by it to the Government ware-house and the State government has further sold to the retailer and the retailer deposited the excise duty. Dealer was neither liable for excise duty nor recovered any amount towards excise duty nor deposited and, therefore, the amount of excise duty paid by the retailer would not be a part of the turnover. Assessing Authority has not accepted the claim of the dealer and added the amount of excise duty to the extent of Rs. 27,97,3237- for the period April, 1982 to December, 1982 in a taxable turnover. First appeal filed by the dealer was allowed and the alleged amount of excise duty has been held not the part of the turnover. Commissioner of Trade Tax filed appeal before the tribunal, which has been rejected by the impugned order. ( 3 ) TRIBUNAL held that an amendment was made with effect from 1. 4. 1982 by the Excise commissioner in Section 41 of the U. P. Excise Act. According to amended Rules, manufacturer or importer of IMFL has to take licence and this licence has to be given to those dealers whose supply prices has been accepted by the department. 4. 1982 by the Excise commissioner in Section 41 of the U. P. Excise Act. According to amended Rules, manufacturer or importer of IMFL has to take licence and this licence has to be given to those dealers whose supply prices has been accepted by the department. It has been stated that a Circular was issued by the Excise Commissioner dated 19th March, 1982 by which the business of IMFL has been taken over by the State Government in its hand with effect from 1. 4. 1982 and the liquor which was to be sold to the Government its price was to be informed for which the excise duty was not to be added. Tribunal held in the present case that the goods in question have been sold by the dealer to the Government operated ware-house and the State Government further sold the goods to the retailers and the retailers in turn have deposited the excise duty directly to the Government treasury and it was on the deposit of the excise duty, retailers drew respective quantity of liquor from the Government ware-house. On these facts, Tribunal held that the dealer was not liable for payment of excise duty under the Rules for the aforesaid period sand the dealer has not realised any excise duty from customer nor paid and, therefore, the amount of excise duty paid by the retailers directly in the Government Treasury would not be a part of the turnover. ( 4 ) I do not find any error in the order of the Tribunal. Whether the excise duty would be a part of the turnover or not, relevant consideration is whether the dealer was liable to pay excise duty under the Act or the Rules? If the answer is yes, then irrespective of the payment of excise duty by retailers or by any one, the amount of excise duty would be a part of the turnover, but if the dealer was not at all liable for payment of excise duty, the same would not be a part of the turnover. In the present case, it was found that after the amendment in Section 41 of the U. P. Excise Act by the Excise Commissioner and by the Circular dated 19th March, 1982 with effect from 1. 4. In the present case, it was found that after the amendment in Section 41 of the U. P. Excise Act by the Excise Commissioner and by the Circular dated 19th March, 1982 with effect from 1. 4. 1982, business of IMFL had been taken over by the State Government and the price fixed by the Government for the supply by the manufacturer to the Government was without any excise duty. The amount of excise duty was paid by the retailer directly to the Government treasury on the sale by the State owned Ware-house to the retailers and on the payment of excise duty, required quantities were lifted. Therefore, under the above provision and the scheme formulated by the Excise Commissioner, dealer was not liable for excise duty. Consequently, it had neither realised the excise duty nor deposited and, therefore, Tribunal rightly held that the amount of excise duty paid by the retailers would not be a part of the turnover. Decision of the apex Court in the case of Hindustan Sugar Mills v. State of Rajasthan reported In 1979 uptc page 37 and the decision of the Apex Court in the case of Mcdowell and Company limited v. Commercial tax Officer reported in 1985 UPTC page 747 are not applicable in the present case. In the case of Hindustan Sugar Mills v. State of Rajasthan (Supra), Apex Court has held as follows: " The test is what consideration passing from the purchaser to the dealer for the sale of the goods. It is immaterial to enquire as to how the amount of consideration is made up whether it includes the excise duty or sales tax or freight. The only relevant questioned to ask is as to what is the amount payable by the purchaser to the dealer as consideration for the sale. . . . . , The sale price in such a case could be the entire price inclusive of excise duty because that would be the consideration payable by the purchaser to the dealer for the sale of the goods". The Honble Supreme Court has further observed as under:-"as a fact, in the hands of the buyer the cost of the liquor is what is charged by the appellant under its bills together with excise duty which the buyer has directly paid on the sellers account. The Honble Supreme Court has further observed as under:-"as a fact, in the hands of the buyer the cost of the liquor is what is charged by the appellant under its bills together with excise duty which the buyer has directly paid on the sellers account. The consideration for the sale is thus the total amount and not what is reflected in the bill, we are, therefore, clearly of the opinion that excise duty through paid by the purchaser to meet the liability of the appellant, it is a part of the consideration for the sale and it is includible in the turn over of the appellant. The purchaser has paid the tax because the law asks him to do it on behalf of the manufacturer. " ( 5 ) IN the case of Mcdowell and Co. Ltd. v. Commercial Tax Officer (Supra), the Apex court held that the amount of excise duty paid by the purchaser would be a part of the turnover of the manufacturer on the ground that under the Excise Act, duty was on the production and the manufacturer was liable to pay excise duty. ( 6 ) AS stated above, in the present case, dealer was not liable for excise duty. The price fixed by the State Government was exclusive of excise duty and the sale was made to the State government ware-house on the price excluding excise duty and the excise duty was paid by the retailers to the exchequer on the sale amount by the State owned warehouse to the retailers. ( 7 ) IN the case of Commissioner of Sales Tax v. M. P. Beer Product reported in 1989 UPTC page 1026. under the similar circumstances, this court held that the excise duty would not be a part of the turnover. The observations of this court are referred as below: "the Sales Tax Tribunal examined the facts of the case and came to the conclusion that the excise duty to the extent of Rs. 2,940/~ was deposited by the retailers direct in the Government treasury and it was on deposit of the same only that the retailers were entitled to draw the respective quantity from the Government Ware house. On these facts, the Tribunal has held that so far as the present case is concerned, the Government was introduced as an intermediary. 2,940/~ was deposited by the retailers direct in the Government treasury and it was on deposit of the same only that the retailers were entitled to draw the respective quantity from the Government Ware house. On these facts, the Tribunal has held that so far as the present case is concerned, the Government was introduced as an intermediary. According to the circular of the Excise Commissioner the excise duty was to be paid by the retailer to the Government ware-house. It has further recorded a finding that the government Ware house was responsible for the payment of the excise duty. On these facts, the Tribunal has, in its impugned order dated 31. 8. 1987 for the assessment year 1982-83, taken the view that the excise duty shall not form part of the turnover. On this finding, in my opinion, after hearing the learned Standing Counsel, it has to be held that the excise duty shall not form part of the turnover. To my mind there is no error involved in the impugned order passed by the Sales Tax Tribunal". ( 8 ) FOR the reasons stated above, there is no merit in the present revision. ( 9 ) IN the result, revision fails and is, accordingly, dismissed. . .