Excise duty forms part of manufacturer turnover even when purchaser pays it directly to the excise authority.

Excise duty paid or payable by a manufacturer was treated as part of the manufacturer's turnover for sales tax purposes, even where the purchaser remitted the duty directly to the excise authority at the time of removal of goods. Applying later Supreme Court decisions, the Court reasoned that the primary liability to pay excise duty remains with the manufacturer, so the mode of payment does not change the character of the levy for turnover computation. The challenge to the show cause notice also failed, with no ground found to interfere at that stage.

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Issues: Whether excise duty paid or payable by the manufacturer, including where payment is made directly to the excise authority by the purchaser at the time of removal of goods, forms part of the manufacturer's turnover for sales tax purposes.

Analysis: The Court followed the later Supreme Court decisions referred to in the judgment and held that the primary responsibility to pay excise duty rests on the manufacturer. On that basis, the fact that the duty was paid directly to the Government by the purchaser did not alter the character of the levy for turnover purposes. The challenge was also directed against a show cause notice, and no ground was found to interfere at that stage.

Conclusion: Excise duty formed part of the manufacturer's turnover and the contention to the contrary was rejected.

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