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2005 (3) TMI 783 - ALLAHABAD HIGH COURT

2005 (3) TMI 783 - ALLAHABAD HIGH COURT - TMI - Trade Tax Revision No. 895 of 2004 - Dated:- 18-3-2005 - RAJES KUMAR, J. Kunwar Saksena for the Applicant. JUDGMENT Kajes Kumar, J. - Present revision under Section II of U. P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 9th February, 2004 relating to the Assessment Year 1999-2000 under the Central Sales Tax Act. 2. Brief facts of the case are that the applicant is a Public Limited Comp .....

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he L.P.G. in cylinder, applicant has taken cash security in a sum of ₹ 550 for cylinder and ₹ 150 for regulator, total ₹ 700 as per terms and conditions specified on the reverse of the security voucher issued to the customers. During the year under consideration, applicant received a sum of ₹ 9,55,850 by way of cash security. The said amount was transferred to profit and loss account, as the business was closed and the gas cylinder had not been returned by the customers. .....

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which was forfeited amounts to sale consideration liable to tax. 4. Heard learned Counsel for the parties. 5. Learned Counsel for the applicant submitted that the applicant was engaged in the business of distribution of L.P.Q. and was not engaged in the business of sale of cylinders. He submitted that the cylinder was used for the filling of the L.P.Q. gas which was returnable and the security amount was charged to ensure the return of such cylinders. Applicant never intended to sell the cylind .....

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omers. Thus, there was a proper communication of such conditions to the customers. He submitted that the costs of the cylinder inclusive of excise duty was ₹ 803.71 p, which was inadvertently told at ₹ 650 before the authorities below for which the application under Section 22 of the Act for the rectification of mistake was filed before the Appellate Authority which was rejected. He submitted that the amount of security was less than the cost of cylinder and not in the nature of sale .....

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he decision of the Apex Court in the case of United Breweries Limitedy. State of Andhra Pradesh reported in 1997 U.P.T.C. 1274 is not applicable to the facts of the case. He further submitted that the decision in the case of United Breweries Limited v. State of Andhra Pradesh and in the case of Deputy Commissioner of Commercial Taxes v. Mysore Breweries Ltd and others are decision of three Judges Bench, while the decision in the case of KaiyaniBreweries Ltd. v. State of West Bengal and others re .....

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s concerned, there is no dispute, namely, that the gas cylinder was returnable. In the security voucher it was specifically mentioned that the cylinder was returnable and in case of non-return, amount of security would be forfeited. A sum of ₹ 550 was charged towards security while the costs of the cylinder was ₹ 650 though it was claimed as ₹ 803.7 1 which has not been accepted. Question for consideration is whether in the event of non-return of cylinder whether there was any .....

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o another for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on the hire-purchase or other system of payment by instalments, but does not include a mortgage or hypothecation of or a charge or pledge on goods; 2 (h) "sale price? means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowd as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged .....

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ed in accordance with the provisions of this Act and the rules made thereunder." 9. In the case of United Breweries Limited v. State of And lira Pradesh under the terms and conditions, bottle was returnable, security was charged with the view to get the bottle returned and in case of non-return of the bottle as per terms and conditions, security was liable to be forfeited. Assessing Authority levied tax on the amount of security treating it as a part of the turnover. Matter went to the Apex .....

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"19. We are unable to uphold this contention. Whether the bottles and the crates were sold along with the beer or not will depend upon the intention of the parties. We have set out the terms and conditions under which the beer was sold and it does not appear from these terms and conditions that UB intended to sell crates and bottles to the customers. On the contrary it was very anxious to get back these crates and bottles in order to use them again for further supplies. The fact that UB ad .....

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supplier under Section 74 of the Contract Act. An overall view has to be taken of the dealings and transactions between the manufacturer of the beer, its customers and the consumers. The intention of UB does not appear to have been to sell the beer bottles. Mor was there any intention of the retailers to sell the bottles to the consumers. On the contrary, by the terms and conditions of the agreement UB was trying to ensure that the bottles in which the beer was supplied to the consumers through .....

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ll the bottle. Hence, we are of the view that the deposit cannot be considered as price of the bottles. "33. We are of the view that the High Court was in error in holding that the crates and the bottles were sold along with the beer. In the facts of this case, the deposits could not be treated as the price of the bottles and the crates." 10. In the case of Kalyani Breweries Ltd. v. State of West Bengal and others reported in 107 S.T.C. 190 amount of security which was charged at the t .....

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adesh (supra) and held forfeited amount liable to tax for the following reasons: "Now, there is nothing on record .which indicates that the terms under which the deposits would be repaid were communicated to the assessee's customers. There is no suggestions that there was an oral communication of such terms to the customers or that there was any trade usage in this behalf. It is difficult to visualize a bailment the terms whereof are not made known to the bailee. The forfeiture of amoun .....

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e of the bottles to, the customers, the assessee buying back the empties from some customers. It is, therefore, that the assessee could show a refund of ₹ 11,62,974 out of the total amount of deposits, namely, ₹ 30,57,143. Had there been a bailment, which necessarily pre-supposes that the bailee was aware of the terms thereof, a larger refund would have been shown. The judgment in the case of United Breweries Ltd., 1997 U.P.T.C. 1274 (SC) : (1997) 105S.T.C. 177 (SC): (1997)3 S.C.C. 5 .....

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