TMI Blog1983 (2) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... beer and the bottle on the basis of the sale being of bottled beer at the rate mentioned in section 7(1)(a), i.e., 12 paise per rupee, being applicable to item 22 of Schedule I to the Goa, Daman and Diu Sales Tax Act, 1964, viz., foreign liquor and Indianmade foreign liquor. He however took into consideration for levy of sales tax towards the sale price of the bottles only that net amount remaining with the dealers as on 31st March of each year after refund on account of return of bottles. 4.. In appeals by the petitioners against the said order of assessment, the Assistant Sales Tax Commissioner, by his orders dated 23rd August, 1976, in all the said appeals confirmed the said order of the Sales Tax Officer as to the manner of levying sales tax on the petitioners' sale of beer on the basis of the sale being of bottled beer. Further he also vacated that part of the Sales Tax Officer's order which gave credit to the petitioners for the amount refunded by the petitioners towards returned bottles. 5.. The Administrative Tribunal, in revision against the said orders, by its orders dated 14th April, 1978, upheld the order of the Assistant Sales Tax Commissioner. 6.. On an applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... First Schedule to the Act. Item 22 of the First Schedule to the Act or any other item therein does not anywhere provide for levying tax on bottled beer. The said item 22 of the First Schedule to the Act only speaks about the item of sales tax being: "Foreign liquor and Indian-made foreign liquor". The said item shows that taxation is only as against foreign liquor or Indian-made foreign liquor and not against bottle and liquor or bottled liquor. Apart from the contract entered into by the petitioners who are the manufacturers with the wholesalers said to be on the price list annexed by the petitioners to the references shows that sale of beer and bottles was separate and was separately billed. The sale by the petitioners of beer and bottles being separate, in our view assessment of the petitioners to sales tax for sale of beer under item 22 of the First Schedule to the Act on the basis of total price of beer and bottle, was not proper and legal. 10.. The second interesting question was whether in the facts and circumstances of this case the amount taken by the petitioners from their purchasers as "deposit" for bottles was really the sale price of the bottle so as to be considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis that terms of agreement between the petitioners and their purchasers for the sale of beer were on the same line as those contained in the said price list. The said price clearly shows three things: (1) The price of beer quoted therein was exclusive of cost of bottle; (2) That the said terms of sale did not contain an obligation on the purchasers to return the bottles and the time for such return; (3) That the payment of deposit for bottles in advance was a term of sale. Further as the learned Government Advocate has pointed out that under the said agreement the petitioners had also no control over the return of the bottles which would be sold by the wholesalers to the retailers and by the retailers to the consumers. 17.. The circumstances as in this case arose in the case before the Supreme Court in its decision in the case of Punjab Distilling Industries Ltd. v. Commissioner of Income-tax, Simla [1959] 35 ITR 519 (SC) which has been also relied upon by the lower authorities in arriving at their finding. 18.. In that case the Supreme Court was concerned with the question whether the deposit taken for the bottle in the sale of liquor was under the Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's account under the heading "Empty Bottles Return Security Deposit Account" which was contended not to be the price, the Supreme Court found that the method of accounting did not make any difference to the question whether the same was considered to be price or not and that merely because the account was different, if it were the price of sale, it cannot cease to be so by writing up the account in a particular manner. The court also negatived the petitioner's contention that since the price of the bottles was separately fixed the amount taken as deposit was different from and exclusive of it and also that the fact that additional sums might have to be refunded showed that it was not part of the price. It was further contended that the additional amount taken by the assessee from the sellers were only the deposits for securing the return of bottles and as such they were only security deposits and not trading receipts. While negativing the said contention the court at page 524 of the Reports observed as under: "........There could be no security given for the return of the bottles unless there was a right to their return for if there was no such right, there would be nothi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 (SC) has taken a contrary view. In that case the court has relied on a decision of the Allahabad High Court in the case of Dyer Meakin Breweries v. Commissioner of Sales Tax, U.P. [1972] 29 STC 69, which had taken the view that such a transaction was in the nature of bailment. It goes without saying that the term "bailment" which was a contract, implied an obligation, a breach of which entails recovery of damages. In fact the observations of the Allahabad High Court quoted and relied upon in the said Kerala High Court judgment, show that under the statutory rule which the court was considering, there was in fact such an obligation to return the bottles on the liquor therein being consumed, as signifying normal course of trade in the business. No such obligation is shown to exist in this case. 23.. Secondly, before the Kerala High Court in its said decision in McDowell Co.'s case [1980] 46 STC 79, its earlier Division Bench decision in Madura Coats Ltd. v. State of Kerala [1978] 41 STC 333 was not cited. In its said decision in the case of Madura Coats the same High Court had taken the same view as held by the Supreme Court in the aforecited decision, that the amount paid sep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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