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2015 (8) TMI 945 - SC - VAT and Sales TaxValuation - Price fixation of rectified spirit - Earlier HC has declared the provisions of Rule 17 unconstitutional in the case of Gowri Industries [1993 (10) TMI 354 - KARNATAKA HIGH COURT] as, Rule 17 in so far as it empowers of the fixation of price of rectified spirit, is therefore, declared as unconstitutional, and ultra vires the provisions of the State Act. Held that:- The contention of learned counsel for the Appellant is that the State is not entitled to take away the extra profit of ₹ 1/- per litre which the Appellant earns because molasses is available in its own premises. This argument, however, conveniently ignores the fact that the Respondent State had made it incontrovertibly clear that it would permit the Appellant to sell rectified spirit at the common fixed rate of ₹ 6/- provided it transferred ₹ 1/- per litre to the State. If the Appellant was serious in questioning the legal capacity of the Respondent State recover the said ₹ 1/- per litre, it perforce had to challenge the Government Order dated 12.5.1992. Having failed to do so it cannot, thereafter, challenge the Demand dated 15.12.1993 which is predicted on the Government Order itself. There were three Appellants before the Division Bench of the High Court of Karnataka in the case of but only one of them, i.e. the Appellant before us, has decided to further challenge the Demand of ₹ 13,32,000/- being accorded at ₹ 1/- per litre sold by the Appellant. It is also relevant to mention that the Appellant has not challenged the Demand of transportation charges of 1/- per litre for any subsequent charges - Appellant had full knowledge of the fact that it had been permitted to supply rectified spirit to third parties who are engaged in the business of production of arrack on the condition that of the general fixed price of ₹ 6/- per litre, ₹ 1/- per litre would have to be made over to the Respondent State. - Decided against assessee.
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