TMI Blog1992 (12) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... pose in accordance with the provisions of the Punjab Excise Act, 1914, as applicable to the States of Punjab and Haryana. These licences are for retail vend of country spirit including rum and gin and, on the strength of such a licence, licensee trades in the licensed premises in alcoholic liquor for human consumption (other than Indian-made foreign liquor). A licensee who is a successful bidder is required to pay the entire amount of licence fee in twelve monthly instalments, Every licensed premises popularly known as the vend has a fixed quota of country liquor/alcohol and the licensees keep lifting for sale from time to time the country liquor from the distilleries (manufacturers). Before the country liquor can be purchased from the dist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the buyer of any goods of the nature specified in column (2) of the Table below, a sum equal to the percentage specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax : TABLE -------------------------------------------------------------------------------------------------------------------------------------------------- S. No. Nature of goods Percentage (1) (2) (3) -------------------------------------------------------------------------------------------------------------------------------------------------- (i) Alcoholic liquor for human consumption (other than Indian-made foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty established by or under a Central, State or Provincial Act, or any company or firm or co-operative society." It is not disputed that the petitioners who, as licensees, obtain in sale alcoholic liquor for human consumption other than Indian-made foreign liquor fall within the term "buyer" and the distilleries from whom alcoholic liquor is purchased are "sellers" as defined in the Explanation referred to above. The case of the petitioners is that, while collecting tax from them at source, the distilleries-respondents cannot collect tax on the amount of excise duty which they deposit in the Government treasury before obtaining a permit and on the basis of which they purchase alcoholic liquor from the sellers (distilleries). In other wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipt of such amount by the seller, whichever is earlier, is to be collected by the seller as tax at source. The question is what is the amount payable by the buyer to the seller at the time of debiting of the amount by the seller or at the time of receipt of such amount by him. It cannot be disputed that the amount payable by the buyer to the seller can be debited to the account of the former or is received by the latter only at the time the alcoholic liquor is purchased by the buyer on presentation of the distillery permit obtained by the buyer from the Excise Department. This permit can be had by the buyer after he has paid the excise duty into the Government treasury and produces the receipted challan before the Excise Department. Since t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be only that amount which is to be paid to the seller as price at the time of the sale and cannot, by any stretch of reasoning, be held to include the excise duty which has already been paid to obtain the permit to enable the licensee to purchase the liquor. In the case of McDowell and Co. Ltd. [1985] 154 ITR 148 (SC) relied upon by Mr. Tewatia, their Lordships of the Supreme Court were considering a question as to whether excise duty formed part of "turnover" as defined in section 2(1)(s) of the Andhra Pradesh General Sales Tax Act, 1957, and whether sales tax was payable thereon or not. After examining the concept of excise duty, their Lordships found that excise duty was part of the consideration for the sale and was includible ..... X X X X Extracts X X X X X X X X Extracts X X X X
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