High Court revises Tribunal's judgment on sales exemption, favors Revenue on one issue, Assessee on another.

The High Court partially allowed the Revision, setting aside the Tribunal's judgment on the first issue regarding the exemption of inter-State sales of Rectified Spirit and Denatured Spirit. The Court ruled in favor of the Revenue based on a previous judgment. However, the Court decided in favor of the Assessee on the second issue, stating that the export pass fee paid by the purchaser should not be included in the taxable turnover of the Assessee. The matter was remanded for further action in accordance with the Court's rulings.

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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:
1. The first issue pertains to the exemption of inter-State sales of Rectified Spirit and Denatured Spirit along with export duty. The learned Standing Counsel argued that a Division Bench judgment had already answered this question 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' under the Central Sales Tax Act, 1956. It was ruled that central sales tax on inter-State sale of alcohol was not exempted despite a general exemption under a different act. Consequently, the first question was answered against the Assessee and in favor of Revenue based on the previous judgment.

2. The second issue concerns whether the export pass fee paid by the Ex. U.P. purchaser for Denatured Spirit should be included in the taxable turnover of the Assessee. This matter was addressed in a Division Bench judgment and a Single Judge judgment. The Division Bench, in Hindustan Sugar Mills Ltd. case, clarified that the liability for the export pass fee rests with the purchaser, not the distillery. The amount of export pass fee paid by the purchaser should not be considered as part of the turnover of the distillery. Similarly, the Single Judge in Commissioner of Trade Tax Vs. M/S Rampur Distillery and Chemicals Ltd. case emphasized that the export pass fee is the exporter's responsibility, and it should not be included in the turnover of the dealer. Consequently, the second question 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 first issue and remanding the matter for further action based on the Court's rulings. The second issue was decided in favor of the Assessee, emphasizing that the export pass fee should not be included in the taxable turnover.

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