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of <h1>High Court rules on central sales tax exemption for alcohol sales, export pass fee not part of taxable turnover.</h1> <h3>The Commissioner, Trade Tax Versus Ayodhya Distillery, Chandausi</h3> The Commissioner, Trade Tax Versus Ayodhya Distillery, Chandausi - TMI Issues:1. Whether the Tribunal was justified in exempting inter-State sales of Rectified Spirit and Denatured Spirit along with export dutyRs.2. Whether the export pass fee payable by Ex. U.P. purchaser on purchase of Denatured Spirit from Distillery is liable to be included in the taxable turnover of the Revisionist/AssesseeRs.Analysis:Issue 1 - Inter-State Sales Exemption:The High Court considered a previous Division Bench judgment that clarified the applicability of the United Provinces Sales of (Motor Spirit, Diesel Oil and Alcohol) Taxation Act, 1939 as a sales tax law under the Central Sales Tax Act, 1956. The Court held that the exemption for central sales tax on inter-State sale of alcohol was not applicable despite a general exemption under the 1948 Act. Consequently, the Tribunal's decision to exempt inter-State sales of Rectified Spirit and Denatured Spirit, along with export duty, was deemed unjustified. Therefore, Question No. 1 was answered against the Assessee and in favor of Revenue.Issue 2 - Inclusion of Export Pass Fee in Taxable Turnover:Regarding the export pass fee payable by the Ex. U.P. purchaser on the purchase of Denatured Spirit, the Court relied on a Division Bench judgment and a previous Single Judge judgment. The Court emphasized that the liability for the export pass fee lies with the purchaser, not the distillery. The amount paid by the purchaser cannot be considered part of the turnover of the selling company as it was not received or receivable by the seller. The Court further clarified that the export pass fee is the responsibility of the exporter and not the dealer, as it is paid when obtaining the export permit. Therefore, the export pass fee should not be included in the turnover of the seller. Consequently, Question No. 2 was answered in favor of the Assessee and against Revenue.In conclusion, the High Court partially allowed the Revision, setting aside the Tribunal's judgment on the mentioned issues. The matter was remanded to the Tribunal for further proceedings in accordance with the Court's rulings.
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