TaxTMI 
TaxTMI 
1984 (7) TMI 352
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....e of gross profit at 35 per cent on the excise duty and the inclusion of the same in the turnover assessed finally. A few facts may be stated to appreciate the matter in dispute. The assessee is a dealer in liquors. The assessee imported liquor from Bangalore. It was purchased from Khoday Brewing and Distilling Industries, Bangalore, under a bill issued on 24th February, 1977. The value of the liquor purchased was Rs. 22,880. The assessee sold the same for Rs. 25,000 to Chaman Wines, Hyderabad, under a bill issued on 2nd March, 1977. For the purpose of securing the release of the liquor from the bonded warehouse, the assessee was required to pay excise duty of Rs. 32,895. The assessee claimed that the above excise duty was paid by Cha....
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.... 2.. The Commercial Tax Officer rejected the assessee's plea that the excise duty paid did not form part of the assessee's turnover. The Commercial Tax Officer held that, on the admitted facts, there was no evidence to show that the assessee imported the liquor on behalf of Chaman Wines or that the excise duty was paid directly by Chaman Wines in its own name without the assessee having to do anything with the payment. The facts, that Chaman Wines issued a cheque in favour of the assessee, that the assessee encashed the cheque and realised the cash and that the amount was remitted by the assessee into the State Bank of Hyderabad in its own name and obtained the challan in support of the payment to secure the release of the liquor were, acc....
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....le. It is against this decision of the Tribunal that the assessee came in revision to this Court. 4.. We consider that on the undisputed facts there can be no escape from the conclusion that the excise duty of Rs. 32,895 paid formed part of the assessee's turnover. In the first place there was no evidence that the liquor was imported from Bangalore on behalf of Chaman Wines. The payment of excise duty was on 20th January, 1977 which was long before the liquor was released from the warehouse. The liquor was purchased under a bill issued on 24th February, 1977 from Khoday Brewing and Distilling Industries, Bangalore. The claim was that Chaman Wines issued the cheque for the sum of Rs. 32,895 in the name of the assessee and that the assesse....
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....ate Bank of Hyderabad under a challan in the assessee's name. The assessee is maintaining books of account. It is inconceivable that the cheque issued in the name of the assessee could have been cashed without passing through the transactions in the books of account. If the cheque issued is a crossed or account-payee cheque, it must necessarily have gone through the assessee's bank account. If, however, the assessee obtained a self cheque to suit his convenience and encashed the cheque across the bank counter, the transaction should still have been passed through the accounts maintained by the assessee. If the assessee did not record these transactions in the books of account, the only conclusion is that the assessee is not maintaining its ....
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.... liquors as stated above." The facts in the assessee's case are totally distinguishable. The sum of Rs. 32,895, on the undisputed facts stated above, reached the assessee's till and became part of its circulating capital. The principle in McDowell's case [1977] 39 STC 151 (SC) is clearly inapplicable in the assessee's case. In our opinion, the Commercial Tax Officer was competent to include the excise duty of Rs. 32,895 as forming part of the turnover and subjecting the same to tax. 6.. Learned counsel for the assessee also contended that in any event there is no justification for the estimate of gross profit at 35 per cent on the total purchase value of Rs. 55,775 (including the excise duty). It is stated that the liquor was sold onl....