Sales tax on industrial alcohol and embedded cost components upheld as part of taxable sale consideration.

State sales tax on industrial alcohol was treated as falling within the State's taxing power under entry 54 of List II, and the earlier contrary observation was regarded as not establishing a binding bar. The levy on industrial alcohol was therefore upheld. The administrative fee component was also held taxable where it formed part of the sale consideration or sale price; the record did not establish a distinct fee outside the price, and the disputed factual claim was not suitable for writ relief. The challenge to the levy on that component was rejected, and the impugned tax was sustained.

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Issues: (i) Whether the State could levy sales tax on rectified spirit or industrial alcohol. (ii) Whether sales tax could be levied on the administrative fee component relating to industrial alcohol.

Issue (i): Whether the State could levy sales tax on rectified spirit or industrial alcohol.

Analysis: The levy was tested against the constitutional distribution of taxing power and the earlier Supreme Court decisions concerning industrial alcohol. The governing principle applied was that the State's power under entry 54 of List II extends to taxes on sale or purchase of goods, and the earlier observation suggesting a bar on sales tax for industrial alcohol was treated as not laying down a binding proposition. The later clarification was relied upon to hold that the State's taxing power was not excluded in this field.

Conclusion: The levy of sales tax on industrial alcohol was upheld and the challenge failed.

Issue (ii): Whether sales tax could be levied on the administrative fee component relating to industrial alcohol.

Analysis: The fee component was treated as part of the cost or consideration forming the sale price of the goods. The Court also noted the absence of material to establish that sales tax had in fact been levied on a distinct administrative fee outside the sale price, and held that such a disputed factual claim was not fit for writ adjudication against the State authorities. The component, if included in the sale price, could be subjected to sales tax as part of the price charged to the purchaser.

Conclusion: The challenge to sales tax on the administrative fee component was rejected.

Final Conclusion: The petitions were found to be without merit and the impugned levy was sustained, with no basis for constitutional or writ relief.

Ratio Decidendi: Sales tax can be levied on industrial alcohol where the State acts within its taxing competence under entry 54 of List II, and amounts forming part of the sale consideration, including cost components built into the sale price, are taxable as part of the turnover.

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