Excise duty deduction from taxable turnover denied where duty was not paid by the dealer himself.

Deduction of excise duty from gross turnover under rule 7(1)(i) of the Travancore-Cochin General Sales Tax Rules, 1950 was allowed only where the dealer himself had paid the duty to the Central Government on the goods sold. Amounts collected by a warehouse licensee as part of the purchase price did not amount to excise duty paid by the purchaser, because the duty liability under the Central Excise Rules, 1944 rested on the producer, curer, manufacturer, or storekeeper. The claimed deduction was therefore not admissible, and the petition failed.

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Issues: Whether the amount collected from the petitioner as excise duty on tobacco purchased from a warehouse licensee was deductible from gross turnover while computing net taxable turnover under rule 7(1)(i) of the Travancore-Cochin General Sales Tax Rules, 1950.

Analysis: The deduction under rule 7(1)(i) applied only to excise duty paid by the dealer to the Central Government in respect of the goods sold by him. The amount in question was not paid by the petitioner to the Central Government but was part of the price charged by the warehouse licensee. Under rule 7 of the Central Excise Rules, 1944, the liability to pay excise duty rested on the person who produced, cured, manufactured, or stored the excisable goods, not on the purchaser. The petitioner therefore could not claim the amount as a deductible excise duty payment for sales tax purposes.

Conclusion: The claimed deduction was not allowable, and the petition failed.

Ratio Decidendi: A deduction for excise duty in computing taxable turnover is available only when the dealer himself has paid the duty to the Central Government; an amount recovered from him by another person as part of the purchase price is not such duty.

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