TMI Blog2004 (2) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... le on the excise duty, a component of the sale price. 3.. The necessary facts for disposal of the aforesaid writ applications are that the petitioner has been granted licence to manufacture and sale of country liquor at places Buxar, Ara, Sasaram, Mohania, Bikramganj and Bihia. For the relevant assessment years, he filed the returns showing total turnover and paid the taxes under the provisions of the Act. The assessing authority made assessment under section 17(3) of the Act by order dated November 18, 2000 in C.W.J.C. Nos. 4959 and 5165 of 2003 and by order dated June 14, 2002 and April 10, 2002 in C.W.J.C. Nos. 5527 and 5528 of 2003 respectively. The assessing authority did not allow the claim of cash discount with reference to excise duty being a part of the sale price and other claims and brought them to the tax under the provisions of the Act, copies of the said orders have been annexed as annexure 1 to the writ applications. The petitioner filed an appeal before the Joint Commissioner of Commercial Taxes (Appeals) who after having considered the question of discount with reference to the definition of "sale price" as defined under section 2(u) of the Act read with Explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cause (annexure 6 series to the writ applications) and subsequently, the impugned order has been passed whereby the matter has been remanded after giving the finding that the cash discount is not allowable with regard to excise components of the sale price as defined under the Act. 6.. Dr. Debi Prasad Pal appearing for the petitioner submitted two points. Firstly he submitted that under section 46(4) of the Act, the order passed by the subordinate authority can be revised only to consider the legality and propriety of the order and the authority cannot act as an appellate forum in disguise. Once the assessing authority having considered the matter has allowed the claim, the interference by the revisional authority under section 46(4) of the Act was not permissible as no question of legality and propriety was involved in the matter. Secondly, he submitted that under the provisions of the Bihar Excise Act read with Rules framed under section 90 of the Act, the excise duty is paid by the purchaser and not by the petitioner engaged in manufacturing country liquor, the same is not a part of the sale price and as such no tax is leviable with regard to excise duty paid. In support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Joint Commissioner under the notification, to suo motu call for the records of any proceeding in which order has been passed by any authority appointed under section 9, for the purpose of satisfying himself as to the legality or propriety of such order and after examining the record and making such enquiry to pass necessary order as he thinks proper. According to sub-section (5) of section 46, an order has to be passed after giving a reasonable opportunity of hearing to affected person. Sub-section (4)(a) of section 46 of the Act runs as follows: "(4)(a) The Commissioner may, on his own motion call for and examine the records of any proceeding in which any order has been passed by any other authority appointed under section 9, for the purpose of satisfying himself as to the legality or propriety of such order and may after examining the record and making or causing to be made such enquiry as he may deem necessary, pass such order as he thinks proper." 9.. Under section 9 of the Act, the State Government has been empowered to appoint the authorities to carry out the purposes of the Act and the aforesaid authorities are vested with the power to pass order with regard to asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds, aggregate of sale prices received and receivable by a dealer, including the gross amount received or receivable for execution of works contract or for the transfer of right to use any goods for any purpose (whether or not for a specified period) during any given period (and also including the sale of goods made outside the State and in the course of inter-State trade or commerce or export), but does not include sale prices of goods which have borne the incidence of purchase tax under section 4; (ii) for the purposes of levy of purchase tax, aggregate of purchase prices paid or payable by a dealer during any given period in respect of purchase of goods or class or description of goods which have borne the incidence of purchase tax under section 4; (iii) for the purposes of section 3, the aggregate of the amounts under sub-clauses (i) and (ii); ........................... 2(u) 'sale price', means the amount payable to a dealer as valuable consideration in respect of the sale or supply of goods; Explanation I. Sale price shall include any amount charged by the dealer for anything done in respect of the goods at the time of, or before delivery thereof to the buyer. Explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ex Court held that the taxable event in the case of duties of excise is a manufacture of goods and the duty is not directly on the goods but on the manufacture thereof. After considering the definitions of "turnover" and "sale" it was held that as the excise and countervailing duties did not go into the common tills of the manufacturer and did not become a part of their circulating capital the same could not be included in the turnover as the excise duty and countervailing duty was not charged by them but was charged by and paid directly to the excise authorities by the buyers of the liquors. In other words, it was held in that case that the excise duty as well as countervailing duty did not form part of the consideration for sale and as such it could not be included in the turnover for the purpose of assessment of tax under the Act. 17.. Thereafter, it appears that the rules framed under the Andhra Pradesh Excise Act was amended to the effect that "no spirit or liquor manufactured or stored shall be removed unless the excise duty specified under the rule has been paid by a holder of a D-2 licence before such removal and on payment of the excise duty by the holder of the D-2 lice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion held that the position is not different when under a prior agreement, the legal liability of the manufacturer-dealer for payment of excise duty is satisfied by the purchaser by direct payment to the excise authorities or to the State exchequer. It further held that we are, therefore, clearly of the opinion that excise duty though paid by the purchaser to meet the liability of the appellant is a part of the consideration for the sale and is includible in the turnover of the appellant. The purchaser has paid the tax because the law asks him to pay it on behalf of the manufacturer. 21.. Thus, in view of the settled law, the excise duty which is the liability of the manufacturer though paid by the purchaser is a part of the consideration money and thus is part of the sale price as defined under the Act. According to definition of the "gross turnover", the relevant provision is aggregate of sale prices received and receivable by a dealer in respect of sale of goods is the gross turnover. The excise duty, as stated above, being the part of the consideration paid to the manufacturer though under the relevant rules, as stated above, is deposited by the purchaser, is thus included in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price and the said discount cannot be a part of the sale price for being included in the gross turnover. The sale price cannot be segregated componentwise, namely, excise duty, price claimed by the manufacturer for the sale of excise commodity to decide as to whether the cash discount can be allowed with regard to one component or the other. Thus, the Joint Commissioner of Commercial Taxes has rightly held that the sale price cannot be segregated into component wise. After having held so he was not justified in holding that trade discount is not permissible with regard to excise duty. Once the excise duty becomes part of the sale price, the trade discount is also permissible with regard to the same. 25.. The very purpose of trade discount is to encourage the business. It enables the dealers to sell the goods and yet make a reasonable margin of profit after taking into account his business expense, etc. Thus, when a claim for trade discount is made, it has the question to be considered is as to whether the trade discount is bona fide or reasonable one or it is a device to tax evasion. 26.. Learned counsel appearing for the State drew our attention to the averments made in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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