1997 (3) TMI 484

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ocates [for M/s. J.B. Dadachanji & Co., Advocates] with him), for the respondent in Civil Appeals Nos. 3172 of 1988, 44 and 45 of 1984 and 3174 to 3176 of 1988.   A.K. Ganguli, Senior Advocate (V. Krishnamurthy and T. Harish Kumar, Advocates, with him), for the appellant in Civil Appeals Nos. 3172 of 1988, 5553 and 5554 of 1990, 3173 of 1988, 3174 to 3176 of 1988 and 445 to 447 of 1984.   --------------------------------------------------   The judgment of the Court was delivered by   SUHAS C. SEN, J.-This appeal arises from a judgment of the High Court at Madras on a sales tax revision case. McDowell and Company Ltd., is primarily a distributor of liquor for United Breweries Limited (hereinafter referred to ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on sale of the bottles. The deposit amount could not be taxed in any way as price of bottles. 2.. Before the High Court, the contention of the State was that the transactions were liable to be treated as sales. The deposits were merely shown in the accounts separately. That did not mean that these deposits were not sale proceeds. The way they were shown in the accounts could not be determinative of the nature of the amount received. The rights of the parties crystallised at the time when the sale of liquor took place. The purchaser not only paid for the liquor but also for the bottles. The amounts received on account of sale of the bottles though described in the account as deposits, were nothing but sale price of the bottles. 3.. Ano....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....essee had to deposit certain amounts for taking delivery of the liquor in bottles. The clear understanding was that when the bottles were returned, U.B. would refund the amount of the deposits. The assessee, in its turn, collected deposits at the same rate from its customers when it sold liquor in bottles. When the bottles were returned, the assessee refunded the amount of deposit collected by it to its customers. If any customer did not return the bottles due to breakages or for any other reason, the assessee did not refund the deposit amount.   6.. When the assessee received back the bottles from its customers, it used to return the bottles to its principal and get back its deposit. If there was any shortage in returning of the....