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1987 (2) TMI 502 - HC - VAT and Sales Tax
Issues: Assessment under Andhra Pradesh General Sales Tax Act for sale of beer, ownership of bottles and crates, validity of company's sales scheme.
Analysis: The judgment by the Andhra Pradesh High Court involved the assessment of M/s. United Breweries Limited under the Andhra Pradesh General Sales Tax Act for the sale of beer in two brands in the State of Andhra Pradesh. The company claimed that the ownership of bottles and crates remained with them even when beer was sold, and customers were required to return the bottles and crates to receive security deposits. However, the taxing authorities found discrepancies in the company's scheme as customers did not return the bottles and crates as claimed. The Sales Tax Appellate Tribunal also rejected the company's scheme, leading to three revision cases before the High Court. The High Court considered the arguments presented by both the company and the Revenue regarding the ownership of bottles and crates. The court analyzed the scheme in detail and concluded that ownership of bottles and crates did not remain with the company upon sale of beer. The court held that when customers returned the bottles and crates, there was a resale of the items to the company, rejecting the company's contentions. The company cited various cases to support its arguments, including the Punjab Distilling Industries Ltd. case and Hindustan Sugar Mills Ltd. case. The court also considered English cases cited by the company, emphasizing the nature of transactions involving receptacles. Ultimately, the High Court aligned its decision with the findings of the three tax authorities and previous legal principles, concluding that bottles and crates were sold to customers when beer was sold, and the return of these items constituted a separate sale back to the company. In light of the analysis and legal precedents, the High Court dismissed the three tax revision cases filed by the company, ruling in favor of the Revenue. The court held that there were no merits in the company's contentions and ordered the petitions to be dismissed without costs.
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