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of <h1>Court ruling: Assessee wins on export pass fee issue, loses on exemption of spirits.</h1> <h3>The Sales Tax Commisioner Versus Alco Chemicals Ltd.</h3> The Sales Tax Commisioner Versus Alco Chemicals Ltd. - TMI Issues:1. Exemption of inter-State sales of Rectified Spirit and Denatured Spirit along with export duty2. Inclusion of export pass fee in the taxable turnover of the Revisionist-AssesseeAnalysis:Issue 1:The first question of law in this matter pertains to the exemption of inter-State sales of Rectified Spirit and Denatured Spirit along with export duty. The Court referred to a Division Bench judgment which ruled against the Assessee and in favor of Revenue. The Division Bench held that the United Provinces Sales of (Motor Spirit, Diesel Oil and Alcohol) Taxation Act, 1939 is a 'sales tax law' within the meaning of the Central Sales Tax Act, 1956. It was emphasized that the payment of central sales tax on inter-State sale of alcohol was not exempted despite a general exemption under section 4 of the 1948 Act. Consequently, the Court answered Question No. 1 against the Assessee and in favor of Revenue.Issue 2:The second question raised in the case concerns the inclusion of the export pass fee payable by the Ex. U.P. purchaser on the purchase of Denatured Spirit from a Distillery in the taxable turnover of the Revisionist-Assessee. The Court cited a Division Bench judgment and an earlier Single Judge judgment to support its decision. In the case of Hindustan Sugar Mills Ltd., the Court clarified that the liability for the payment of the export pass fee rests with the Ex. purchaser and not the distillery. The amount of export pass fee paid by the purchaser cannot be considered part of the turnover of the company selling the spirit. Similarly, in the judgment involving M/S Rampur Distillery and Chemicals Ltd., it was reiterated that the export pass fee is the liability of the exporter and not the dealer. As the dealer did not realize or pay the export pass fee, it should not be included in the turnover. Consequently, Question No. 2 was answered in favor of the Assessee and against Revenue.In conclusion, the Court partially allowed the Revision, setting aside the Tribunal's judgment on the mentioned issues and remanding the matter back to the Tribunal for further proceedings in accordance with the Court's findings.
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