TMI Blog2003 (6) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the Assam General Sales Tax Act, 1993 and is engaged in the business of sale and supply of liquor. The petitioner-company has one distillery unit in Rajasthan and it is not possible for the solitary unit of the petitioner-company to cater to the entire requirement of the petitioner-company. Since excise duty in respect of the Indian-made foreign liquor is a subject under List II (i.e., State List) of the Constitution of India and since on the movement of the Indian-made liquor from one State to another, excise duties are charged by both the importing and exporting States and that too at different rates, it is not commercially viable to manufacture and supply Indian-made foreign liquor brands from one destination. To overcome these difficulties, the petitioner-company entered into agreements with various distillery units of the country for manufacturing and supplying of foreign liquor with requisite brands. In Assam, the petitionercompany owns only one wholesale licence and, accordingly, the petitioner-company entered into an agreement with one of its dealers, namely, Nanak Singh Sujan Singh Saha in Assam (hereinafter referred to as "NSSSS"), who owns a bonded warehouse located ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entered into by the petitioner-company with the said owner of the bonded warehouse, the difference in the purchase price and resale price comes to barely 37.9 per cent in respect of assessment for the assessment year 1993-94 and 33.29 per cent for the assessment year 1994-95, which is within the limits prescribed by the Explanation to section 8(1)(a) of the Act of 1993 read with rule 12 of the Assam General Sales Tax Rules, 1993. It was further submitted before the Superintendent of Taxes that the aforesaid difference would further go down in case the various credit notes issued to the customers in the subsequent years in respect of the transactions, undertaken during the assessment years 1993-94 and 1994-95, by way of rebate and discount, are taken into consideration. On considering the reply submitted by the petitioner and on examining the relevant papers and documents, the Superintendent of Taxes was satisfied with the contention of the petitioner that the difference between the purchase price and resale price for the assessment years 1993-94 and 1994-95 was below 40 per cent and thereby the provisions of section 8(1)(a) of the Act of 1993 read with rule 12 of the Assam General ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely, Deputy Commissioner and reiterated the contentions raised before the Superintendent of Taxes in this regard. It was submitted therein that after taking into account the various charges paid to the bonded warehouse owner, the difference between resale price and purchase price came to below 40 per cent and hence, the provisions of section 8(1)(a) of the Act of 1993 read with rule 12 of the Assam General Sales Tax Rules, 1993 were not applicable. It was also submitted therein that since the assessing officer was satisfied on examination of the books of accounts and documents that there was no case for rectification of the assessments, for, the difference between the purchase price and resale price was less than 40 per cent, the assessments made on re-examination by the Superintendent of Taxes cannot be disturbed by initiation of a parallel proceedings in exercise of powers under section 36(1) of the Act of 1993. It was further submitted therein that the power of suo motu revision cannot be exercised to entrench upon the powers reserved for the assessing officer and for making recalculation of the purchase price and resale price, which is solely a matter under the domain of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antial part of the goods manufactured by him or imported by him to another person for sale under the brand name of such other person or for resale as distribution or selling agent or for resale after repacking or subjecting the goods to any other process not amounting to manufacture and the price charged on resale exceeds the sale price by more than such percentage as may be prescribed in respect of such goods or class of goods, the resale by such other person shall subject to rules if any, framed in this behalf, be deemed to be at the first point of sale within the State." Rule 12 of the Assam General Sales Tax Rules, 1993 provided as under: "12. Charge of tax and rates under section 8(1)(a).-Where a person after purchasing goods covered by Schedule II under clause (a) of sub-section (1) of section 8 sells such goods in such manner as mentioned in the explanation to the aforesaid clause and if the price charged on such resale exceeds forty percentum of the original sale or purchase price, in respect of such goods or class of goods, the resale of such goods by such person shall be deemed as first point of sale within the State and the rates of tax shall be as specified in Sched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking delivery of the liquor shall be included within the purchase price. Since the petitioner-company, on the basis of the contract, as reflected from the agreement, dated April 1, 1993, paid various charges like storage charges, special service charges, distribution and C and F expenses and inward freight on goods from distilleries of the bonded warehouse, which were all expenses relating to the goods before taking the delivery thereof, the aforesaid charges obviously formed part of the purchase price of the petitioner. This position is not seriously disputed by Mr. Talukdar. 11.. However, the respondent No. 2, while passing the impugned order, dated March 22, 1999, totally ignored the agreement entered into between the petitioner-company and the owner of the bonded warehouse and simply for the reason that the charges were raised by the bonded warehouse owner on the petitionercompany after completion of the sale of the goods and not at the time of the sale of the goods, he held that the same would not form part of the purchase price of the petitioner. Further, the respondent No. 2 came to a palpably erroneous finding that the charges were paid by the petitioner-company for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued by the person entitled to receive money under the terms of the contract. I respectfully agree with the views so expressed. 14.. In the case at hand, the terms of contract are clear and leave no room for doubt that the charges, in question, were raised by the NSSSS against the petitioner-company for services rendered and facilities provided to the petitioner-company before the transactions of sale were complete and the same were to be paid before lifting of the goods by the petitioner-company. 15.. I may pause here to point out that the expression "anything done by the dealer", occurring in section 4, came up for interpretation by the apex Court in McDowell Company Ltd. v. Commercial Tax Officer [1977] 39 STC 151. The apex Court while dealing with the provisions of the Sales Tax Act, held that the phrase "any sums charged by the dealer" has to be understood in its ordinary popular sense and, so construed, it means, "what is demanded and collected or received by the dealer". 16.. Since in the present case, as per the contract entered into between the warehouse owner and the petitioner-company, it was obligatory on the part of the petitioner to pay the charges specified th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded warehouse owner as per the agreement, dated April 1, 1993, cannot be treated to be part of the purchase price is wholly incorrect and untenable in law and when such charges are taken into consideration, the difference between the purchase price and resale price comes to below 40 per cent. Hence, the provisions of Explanation to section 8(1)(a) will not be applicable to such cases. Logically, therefore, the orders of assessment passed by the Superintendent of Taxes cannot be termed as erroneous and/or prejudicial to the interest of the Revenue. 20.. We may pause here and take note of the relevant part of section 36(1) of the Assam General Sales Tax Act, 1993, which is reproduced below: "36(1). Revision of order by the Commissioner.-The Commissioner may call for and examine the records of any proceeding under this Act and if he considers that any order passed therein by any person appointed under sub-section (1) of section 3 to assist him is erroneous insofar as it is prejudicial to the interests of the Revenue, he may, after giving the dealer or the person to whom the order relates an opportunity of being heard and after making or causing to be made such enquiry as he deems ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
