TMI Blog2012 (1) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... ner. Liability to pay sales tax - Export duty recoverable in respect of spirit exported to other States or Union Territories in India, forms part of turnover – Held that:- "manufacture and export duty" is the liability of the buyer - once that is so, the contention of the learned counsel for the petitioner loses its weight – in McDowell And Co. Limited Versus Commercial Tax Officer [1985 (4) TMI 64 - SUPREME Court] it has been held that it was primarily a burden which the manufacturer had to bear - intending purchasers of the Indian liquors who seek to obtain distillery passes are also legally responsible for payment of the excise duty is too broadly stated - The 'duty' was primarily a burden which the manufacturer had to bear and even if the purchasers paid the same under the Distillery Rules, the provisions were merely enabling and did not give rise to any legal responsibility or obligation for meeting the burden - the provisions of rules 80, 81, 82, 83 and 84 do not militate against the conclusion that the payment of excise duty is a liability exclusively of the manufacturer - In these rules detailed provisions have been made regarding obtaining of distillery pass, correct ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the court was delivered by AJAY KUMAR MITTAL J.- This court vide order dated July 14, 1997 passed in STC No. 15 of 1990, had directed the Tribunal to refer the following questions of law for the opinion of this court: (1) Whether, in the facts and circumstances of the case, after upholding the quashing of purchase tax assessment under section 4B of the Punjab General Sales Tax Act, the Tribunal was right in law in directing the Assessing Authority to levy sales tax in place of purchase tax limited to the amount of purchase tax liability already determined in the assessment order dated December 4, 1978? (2) Whether, in the facts and circumstances of the case, the Tribunal was right in law in holding that the export duty recoverable in respect of spirit exported to other States or Union Territories in India, forms part of turnover and is liable to sales tax having regard to the provisions of the Punjab Excise Act, Punjab Excise Fiscal Orders, 1932, Punjab Liquor Permit and Pass Rules and Punjab Distillery Rules? (3) Whether, in the facts and circumstances of the case, the Tribunal is right in law in holding that notice issued under section 11(2) of the Punjab General ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Tribunal to refer the questions of law. This court vide order dated July 14, 1997 directed the Tribunal to refer the questions of law, as reproduced above. Hence, the present reference. 3. We have heard learned counsel for the parties. 4. At the outset, learned counsel for the petitioner-dealer stated that he does not wish to press question No. 3. Accordingly, the same is returned unanswered. 5. Regarding question No. 1, learned counsel for the petitioner submitted that the petitioner was manufacturing country liquor which was exempt under entry 37 of Schedule B of the Act and, therefore, no purchase tax was leviable thereon. On the strength of judgment of the apex court in Premier Breweries v. State of Kerala [1998] 108 STC 598 (SC) and of this court in Punjab Breweries Limited, Ludhiana v. State of Punjab [1999] 112 STC 314 (P H); [1998] 12 PHT 351 (P H), it was argued that the bottles which were purchased by the petitioner being packing material they had to be charged at the same rate as the contents thereof and since the country liquor itself was exempt, no purchase tax was leviable on the bottles as well. It was also argued that the appellate authority was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... All); [2003] 21 PHT 481 (All). 8. On the other hand controverting the aforesaid submissions, learned State counsel submitted that the matter has been remanded to the assessing authority as the liability to tax is shown to exist but the assessing authority is required to mention the correct provision of law. The authorities relied upon by the learned counsel for the petitioner, thus, had no applicability. 9. Replying on question No. 2, reliance was placed on the Constitution Bench judgment of the honourable apex court in McDowell Company Limited v. Commercial Tax Officer [1985] 59 STC 277 (SC), to contend that the duty in question was not export duty simplicitor but a manufacture and export duty which was the primary liability of the manufacturer and, therefore, formed part of taxable turnover. 10. As regards question No. 4, it was submitted that the respondent-State vide notification dated April 6, 1973 had provided that purchase of goods by dealers liable to pay tax under the Act shall be at the rate which the tax is payable on the sale thereof and the rate of tax on the purchase of such goods shall be three paise in a rupee on the purchase value thereof. Thereafter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter to the assessing authority to assess the sales tax on the sale of empty bottles and packing material to which the petitioner is liable and the liability has been restricted to the liability already assessed in the original assessment order. 13. Adverting to the judgments on which reliance has been placed by the petitioner, no support can be gathered by him as facts involved therein are substantially different. In Frick India Ltd.'s case [1990] 76 STC 148 (P H), the assessing authority while framing the assessment had declined to adjust ₹ 95,729.38 on account of credit notes; rejected C form involving tax of ₹ 32,333.25 and also added ₹ 3,495.18 on account of insurance charges. The dealer had filed an appeal before the appellate authority challenging the additions made by the assessing authority. The appellate authority did not agree with the contentions of the assessee and consequently held that there was no force in the appeal and rejected the same. The appellate authority went further and held that transfer of goods allowed for Delhi by the assessing authority was not in order and claim regarding exports out of territory of India to the tune of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e original assessment order. No fault could be found with the aforesaid reasoning of the Tribunal. Accordingly, question No. 1 is answered against the dealer. Question No. 2 18. To answer question No. 2, it would be expedient to quote below rule 11(a) and (b) of the 1932 Rules, para 1B of 1932 Orders and rule 120 of the Distillery Rules on which reliance has been placed by learned counsel for the petitioner which are as under: Rule 11(a) and (b) of 1932 Rules 11. The following procedure shall be observed as regards the export-in-bond of country spirit, Indian-made foreign spirit or rectified spirit from any licensed distillery in the Punjab to any State or Union Territory in India: (a) Whenever the manager of any distillery licensed in the Punjab under section 21 of the Punjab Excise Act receive a requisition for the export-in-bond in spirit to any other State or Union Territory in India, the person importing the spirit shall obtain and send to the manager an import-in-bond permit signed by the Collector or Chief Excise Authority of the District, State or Union Territory of destination, respectively, for supply of such spirit. (b) The manager of the distillery sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relatable to manufacture but its collection can be deferred to a later stage as a measure of convenience or expediency. On an examination of the provisions of the Excise Act, the Rules framed thereunder and the pronouncements referred to above, we are of the view that the conclusion of this court at page 921 of the reports (at page 158 of [1977] 39 STC 151 (SC)) that intending purchasers of the Indian liquors who seek to obtain distillery passes are also legally responsible for payment of the excise duty is too broadly stated. The 'duty' was primarily a burden which the manufacturer had to bear and even if the purchasers paid the same under the Distillery Rules, the provisions were merely enabling and did not give rise to any legal responsibility or obligation for meeting the burden. We do not propose, however, to examine this aspect any further for the change in rule 76 of the Distillery Rules has clearly affirmed the position that liability for payment of excise duty is of the manufacturer. The provisions of rules 80, 81, 82, 83 and 84 do not militate against the conclusion that the payment of excise duty is a liability exclusively of the manufacturer. In these rules d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court shall decide the questions of law raised thereby and pass its judgment thereon and thereafter the Appellate Tribunal may pass such orders as are necessary to dispose of the case conformably to such judgment. It has been held by this court that the jurisdiction conferred upon the High Court by section 66 of the Income-tax Act is a special advisory jurisdiction and its scope is strictly limited by the section conferring the jurisdiction. It can only decide questions of law that arise out of the order of the Tribunal and that are referred to it. Can it be said that a question whether a provision of the Act is ultra vires of the Legislature arises out of the Tribunal's order? As the Tribunal is a creature of the statute, it can only decide the dispute between the assessee and the Commissioner in terms of the provisions of the Act. The question of ultra vires is foreign to the scope of its jurisdiction. If an assessee raises such a question, the Tribunal can only reject it on the ground that it has no jurisdiction to entertain the said objection or decide on it. As no such question can be raised or can arise on the Tribunal's order, the High Court cannot possibly give any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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