Excise duty on liquor removal from bonded warehouse forms part of sale price and taxable turnover under amended rules.

Amended excise and bonded warehouse rules required liquor removal only through the licensee after payment of excise duty, so duty paid in that process was treated as paid for and on behalf of the dealer. On that basis, the duty formed part of the sale consideration and was included in taxable turnover. Once the duty component was part of the price, the higher entry for liquor sales applied under the First Schedule, and the separate treatment under item 26(a) was excluded. The absence of separate invoice disclosure did not alter the legal character of the receipt.

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Issues: (i) Whether the excise duty paid in connection with removal of liquor from the bonded warehouse formed part of the petitioner's taxable turnover under the amended excise and storage rules. (ii) Whether the assessment was correctly made under item 26(b) of the First Schedule to the Andhra Pradesh General Sales Tax Act rather than item 26(a).

Issue (i): Whether the excise duty paid in connection with removal of liquor from the bonded warehouse formed part of the petitioner's taxable turnover under the amended excise and storage rules.

Analysis: The amended rules required removal of liquor from the bonded warehouse only through the licensee and only after payment of excise duty by the licensee. In that legal setting, payment of duty for the buyer's benefit was treated as payment made for and on behalf of the licensee. The amount was therefore deemed to have been deposited by the dealer, and the true nature of the transaction was that the dealer received the sale price inclusive of the duty component.

Conclusion: The excise duty formed part of the taxable turnover and was rightly included against the petitioner.

Issue (ii): Whether the assessment was correctly made under item 26(b) of the First Schedule to the Andhra Pradesh General Sales Tax Act rather than item 26(a).

Analysis: Once the excise duty component was held to be part of the sale consideration and taxable turnover, the transaction fell within the higher applicable entry for liquor sales where duty formed part of the price. The absence of a separate disclosure in invoices or accounts did not alter the legal character of the receipt.

Conclusion: Item 26(b) applied, and item 26(a) was inapplicable.

Final Conclusion: The writ petition failed because the excise duty paid in the course of liquor removal was legally treated as part of the dealer's sale consideration and therefore liable to be included in taxable turnover.

Ratio Decidendi: Where amended excise and bonded warehouse rules require the licensee alone to effect removal of liquor after payment of duty, the duty paid in that process is deemed to be paid by the dealer and forms part of the taxable sale price.

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