TaxTMI 
TaxTMI 
1974 (5) TMI 110
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....t having been mentioned in column 2 but in column 1 of Schedule B, no liability to pay sales tax in connection with the sale of such liquor has been lawfully imposed in view of the provision of section 6 of the Sales Tax Act; and (ii) beer is not "Indian-made foreign liquor" within the meaning of that expression used in entry 37 of Schedule B to the Sales Tax Act as amended with effect from 1st October, 1966. Section 4 of the Sales Tax Act (which is the charging section) provides that every dealer (subject to certain exceptions which are not relevant for us) whose gross turnover in a year exceeds the taxable quantum, shall be liable to pay tax on all sales effected by him. The petitioner admittedly falls within the definition of "dealer" as contained in section 2(d) of the said Act. Sub-section (1) of section 6 is in the following terms: "No tax shall be payable on the sale of goods specified in the first column of Schedule B subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column thereof and no dealer shall charge sales tax on the sale of goods which are declared tax-free from time to time under this section." Entry 37 ....
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....words: "The counsel contended that beer, wine and rum are not covered by the definition of Indian-made foreign liquor. I am not inclined to accept this contention for the reasons stated hereinafter. All these beer, wine, rum and brandy serve the same purpose, i.e., intoxication. Their process of manufacturing is almost the same with slight variation. They all contain alcohol in varying quantities. The only distinguishing feature in all of them is that the quantity of alcohol and degree differ. All these reasons show that 'beer, wine, rum and brandy, etc.' are definitely Indian-made foreign liquor especially when the fact is that the term 'Indian-made foreign liquor' is not defined in the Act and is to be construed as understood in common parlance. There is no other information on the file." The first point relating to the scope, interpretation and legality of the exception contained in the exemption mentioned in entry 37 does not appear to have been specifically argued before the Assessing Authority as the same has not been dealt with anywhere in its order. Since, however, the matter has been raised and argued at length and is likely to arise in other cases also, I have co....
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....ully considering the matter, I am of the opinion that the submission of Mr. Narula is wholly misconceived and the interpretation placed by Mr. Anand Swarup on the expression "conditions and exceptions" used in section 6(1) of the Act is the correct one. The object of making this provision in section 6 is that despite exemption of a commodity from levy of sales tax by including it in column 1 of Schedule B, the sale of the same commodity may nevertheless be made liable to the incidence of the tax under that Act in certain circumstances which may be detailed in column 2. All the same, the article exempted under column 1 and the article made subject to the incidence of the tax by being mentioned in column 2 is expected to be the same and the incidence of the tax on the exempted article would be attracted only if the exceptions or conditions specified in column 2 relating to the sale of that article are fulfilled in a given case. This becomes still clearer from a reference to the various entries in Schedule B against which conditions and exceptions have actually been mentioned in column 2. "Vegetables" are mentioned in column 1 of entry 16. The exception carved out in column 2 of that ....
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....have been mentioned in the writ petition.) The second question is whether beer is or is not an "Indian-made foreign liquor" for the purposes of entry 37 in Schedule B as it existed during the assessment year 1966-67. Section 3(14) of the Punjab Excise Act states that "liquor" means "intoxicating liquor, and includes all liquid consisting of or containing alcohol; also any substance which the State Government may by notification declare to be liquor for the purposes of this Act". It is not disputed that beer is a liquid and does contain some alcohol. Beer, therefore, undisputably falls within the statutory definition of liquor. Nor is there any dispute about the fact that the beer on which the tax has been assessed in the impugned order is Indian-made. What is contended is that beer manufactured in India cannot be called a foreign liquor. In subparagraph (2) of paragraph 2 of the Punjab Liquor Definitions, 1954, foreign liquor has been defined to mean: (a) all liquor imported by sea into India......; (b) all liquor manufactured in India (other than rectified spirit, denatured spirit and perfumed spirit) on which duty at a rate higher than that levied on country liquor is levia....