TaxTMI 
TaxTMI 
1994 (3) TMI 376
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....able to be included in his taxable turnover although the said amount of excise duty has neither been paid by the purchaser nor is payable by him under the contract entered between him and the assessee." 3.. The Andhra Pradesh High Court on identical facts and law speaking through honourable Mr. Justice B.P. Jeevan Reddy, erstwhile Chief Justice of this Court and presently a puisne Judge of the apex Court of the land answering the question in the negative held that excise duty which is neither paid nor payable by the buyer cannot be included in the taxable turnover of the assessee. The learned Judges while coming to the above conclusion took into consideration the definition of "turnover" in the States Sales Tax Act (sic) and "sale price" in the Central Sales Tax Act. 4.. In brief, the facts of the case may be stated as follows: M/s. Indian Aluminium Cables Pvt. Ltd., 7/1, G.T. Road, Ghaziabad, which is a registered public limited company under the Companies Act, 1956 is engaged in the manufacture and sale of ACSR/AAC, AAAC conductors and is registered as dealer both under the U.P. and Central Sales Tax Acts. Certain projects happened to be financed by the International Ban....
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.... the two contradictory stands taken on behalf of the assessee and the department, it is, therefore, necessary first to examine as a fact as to whether the liability to pay excise duty which normally is that of the manufacturer is being borne by the assessee himself or by a third person on his behalf. The Government Order dated January 7, 1970, a copy whereof has been filed with the revision application, would show that the Central Government has made a general policy decision to refund the amount of excise duty on all the sales made by manufacturer to the projects aided by IBRD and IDA. The scheme sponsored by the Central Government is for the purpose of promoting local manufacturers of conductors or other articles to compete with foreign manufacturers in the global tenders floated for supply of articles in question to the local consumers in connection with the projects aided by the IBRD and IDA. It is not a case where the liability of the assessee regarding payment of excise duty is being shifted either on the purchaser of the goods or on someone else. The contract entered into between the applicant and the purchaser, a copy whereof has been supplied at the time of arguments by th....
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....and spirituous liquors of all kinds including methyl alcohol but excluding alcohol, as defined in the United Provinces Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939, at the point of sale by the manufacturer or importer or such other single point as the State Government may by notification declare at the rate of twenty per cent or at such rate not exceeding twenty-six per cent, as the State Government may, by notification declare; (d) on the turnover in respect of goods specified in the Schedule, at such point and at such rate, not exceeding fifteen per cent, as the State Government may, by notification, declare, and different points and different rates may be declared in respect of different goods comprised in any entry in the said Schedule: Provided that the State Government may, by notification, omit the entry relating to any goods from the Schedule and may, in the like manner, restore any entry so omitted, and upon the issue of any such notification omitting or restoring any entry, the said Schedule shall, subject to the provisions of subsection (2), be deemed to be amended accordingly; (e) on the turnover in respect of goods, other than those referre....
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.... (i) means the aggregate amount for which the goods are supplied or distributed by way of sale by a dealer. Similarly, "turnover of purchases" means the aggregate amount of price in respect of purchase of goods made by or through him. Thus, from the above it is noticeable that emphasise is on the price or consideration paid or payable for the purchase or supply of goods by the purchaser. 11.. Similarly, under the Central Sales Tax Act, 1956, section 6 is the provision which imposes tax on all sales effected by him in the course of inter-State trade or commerce during any year on and from the date so notified. "Sale" and "sale price" as well as "turnover" have been defined in section 2 of the Central Sales Tax Act in clauses (g), (h) and (j). The definitions of these words, which are relevant for the purpose of this case, are being extracted below: "(g) 'sale', with its grammatical variations and cognate expressions, means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on the hire-purchase or other system of payment by instalments, but does not include a mortg....
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....e by the purchaser will be relevant and not the price of the goods and sales tax will be assessed at Rs. 15 and not at Rs. 10. On the other hand, if the price of the goods is Rs. 15 inclusive of the excise duty, if however purchaser is required to pay only Rs. 10 for purchase of that goods, the "sale price" or the "turnover of sale" in respect of the goods will be determined on the basis of the amount paid or payable by the purchaser in respect of that goods which is Rs. 10 and not Rs. 15. In the present case, admittedly, the purchaser under the scheme of the Central Government as well as under the contract entered into between him and the assessee was required to pay the price of the goods minus the amount of excise duty payable thereon. The bill sent to him by the seller also indicated the net liability of the purchaser being the price of the goods reached after adding the excise duty but subsequently deducting the said amount for determining the net liability. In the circumstances, there should appear no confusion whatsoever for the purpose of knowing as to what is the amount paid or payable by the purchaser for the transfer of the goods by the assessee in his favour as per t....
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....aid by the assessee in respect of the goods has, in any case, to be added to the turnover disclosed by the assessee and the actual turnover has to be determined by adding the amount of excise duty paid by the assessee. It was emphasised that a perusal of the bill raised by the assessee on the purchaser would also show that he had recovered Central sales tax on the gross liability of the purchaser for the supply of goods by adding the amount of excise duty paid by him in respect of the goods whereafter the said amount of excise duty has been deducted for the purpose of determining the net liability of the assessee. This, therefore, will make it clear, according to the learned Standing Counsel, that to the mind of the assessee himself the turnover for the purpose of payment of sales tax both under the Central and the State Sales Tax Acts, the amount of excise duty was to be included. According to the learned State counsel reimbursement of the amount of the excise duty to the assessee by the Central Government under the scheme sponsored by that Government would at the most mean payment or reimbursement of the excise duty on the goods to the assessee on behalf of the purchaser becau....
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....747. In this case the Supreme Court held that the amount of excise duty which was paid directly to the State exchequer by the purchaser of the excisable articles on behalf of the manufacturer will form part of the turnover of sale of the manufacturer under section 2(s) of the Andhra Pradesh General Sales Tax Act, 1957, irrespective that the said amount of excise duty was not included in the bill which was raised by the assessee against the purchaser of the excisable articles for the supply of the commodity in question. The Supreme Court came to the said conclusion on the basis that for the purchase of the goods the amount of excise duty was paid by the purchaser on behalf of the assessee himself at the time of the lifting of the goods by him from the bonded warehouse as the same was a pre-condition for the lifting of the excisable articles from the bonded warehouse under the local Excise Act. The Supreme Court turned down the contention of the assessee that since the bill raised for the supply of the goods was not inclusive of the amount of excise duty, as such, the same was not to be included in the turnover of sale of the assessee. The facts of the present case are quite distingu....