Central sales tax exemption and taxable turnover principles for spirit sales and export pass fee liability.

Inter-State sales of rectified spirit and denatured spirit were not exempt from central sales tax merely because the local sales tax law granted a general exemption; the governing view treated alcohol taxable under the local enactment as outside Section 8(2-A) of the Central Sales Tax Act. Export pass fee paid by the purchaser on denatured spirit could not be included in the seller's taxable turnover because it was the purchaser's own liability and neither received nor receivable by the distillery, so it did not form part of sale price or turnover under Sections 2(h) and 2(j).

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Issues: (i) Whether inter-State sales of rectified spirit and denatured spirit were exempt from central sales tax, and (ii) whether export pass fee paid by the purchaser on purchase of denatured spirit was includible in the taxable turnover of the assessee.

Issue (i): Whether inter-State sales of rectified spirit and denatured spirit were exempt from central sales tax.

Analysis: The issue was governed by the earlier binding view that alcohol taxable under the relevant sales tax law did not qualify for exemption from central sales tax under Section 8(2-A) of the Central Sales Tax Act, 1956 merely because general exemption existed under the local enactment. The Tribunal's contrary view had already been disapproved.

Conclusion: The issue was decided against the assessee and in favour of Revenue.

Issue (ii): Whether export pass fee paid by the purchaser on purchase of denatured spirit was includible in the taxable turnover of the assessee.

Analysis: Export pass fee was held to be the liability of the Ex. U.P. purchaser and not of the distillery. Since the assessee neither received nor was entitled to receive that amount, it could not form part of sale price or turnover within the meaning of Section 2(j) and Section 2(h) of the Central Sales Tax Act, 1956.

Conclusion: The issue was decided in favour of the assessee and against Revenue.

Final Conclusion: The revision succeeded only in part, with the first issue answered for Revenue and the second for the assessee, and the matter sent back for consequential action in accordance with the findings.

Ratio Decidendi: Amounts not received or receivable by the seller and constituting the purchaser's own liability cannot be included in the seller's taxable turnover, while inter-State sales taxable under the governing sales tax law are not exempt merely because of a general exemption under the local statute.

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