TaxTMI 
TaxTMI 
2000 (2) TMI 805
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....t for the return of bottles and that there was no evidence to show that the bottle deposit was refunded. Thus, the turnover pertaining to bottle deposit was brought to assessment. In the first appeal, for the assessment year 1981-82, before the Deputy Commissioner of Commercial Taxes, it was observed that there was no agreement with the customers towards purchase of bottles and no obligation was cast upon the customers for the return with provision for time-limit. Therefore simply because the amount was mentioned as deposit for maintaining separate account for certain amount, it would not make it a deposit and would not partake of the nature of sale. Thus, the view of the assessing authority was confirmed. In respect of the assessment year 1982-83, the first appeal was preferred before the Appellate Assistant Commissioner. It was observed in the appeal "that there being actually no refund of bottle deposits and that the wholesale section of the appellants' business having been closed once for all, by no stretch of imagination can it be stated that the appellants have collected their bottle deposits of Rs. 1,91,316 and that they are holding them up for the purpose of refund when the....
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....ent made on bottle deposit is not correct. Tax has been levied on the entire bottle deposit amount. It is not the case of levying any tax on forfeited bottle deposit amount as contemplated in the decision reported in [1997] 107 STC 190 (SC) (Kalyani Breweries Ltd. v. State of West Bengal). The ratio of the decisions reported in 1997] 105 STC 177 (SC) (United Breweries Ltd. v. State of Andhra Pradesh) and [1997] 107 STC 190 at page 195 (Kalyani Breweries Ltd. v. State of West Bengal) squarely apply in the case of the petitioner. No sales tax has been collected by the petitioner on bottle deposit and in fact the department has allowed exemption in the earlier years on bottle deposit. In the balance sheet also in the liability side, this amount was included under the heading "others". There was tacit agreement with the customers for return of bottles. The absence of time-limit for return of bottles is not the essence of contract. Further while delivering the empty bottles the customers should bear packing and incurred freight charges will not alter the character of the transactions. The Tribunal's decision in T.C. No. 517 dated January 23, 1986 relied on is incorrect. Similarly, in....
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....e bottle deposit amount in the account has been reduced. Thus, the fact remains that the amount considered by the assessing authority for the two years represented the bottle deposit collected but not refunded to the customers because the empty bottles were not returned to that extent. In this connection, it is relevant to note that the petitioner closed the liquor division with effect from September 29, 1982 consequent on the cancellation of the licence on account of Government policy in regard to liquor. Thus, the amount shown as bottle deposit for the years 1981-82 and 1982-83 and assessed to tax by the assessing authority were unrefunded amount utilised in the trading activities of the petitioner. No evidence was let in that these amounts were refunded subsequent to the closure of the liquor division with effect from September 29, 1982. In the light of the factual position, we shall examine the decisions relied on by the learned counsel for the petitioner. In [1997] 105 STC 177 in the case of United Breweries Ltd. v. State of Andhra Pradesh the Supreme Court referred to the circular of the Appellant which set out the following terms: "(1) The refundable deposits were being c....
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....he bottle. There is a clear intention not to sell the bottle. Hence, we are of the view that the deposit cannot be considered as price of the bottles." 7.. In [1997] 107 STC 190, in the case of Kalyani Breweries Ltd. v. State of West Bengal, the Supreme Court observed as follows: There can be no doubt that the facts and circumstances must be ascertained to determine whether or not the assessee had sold the beer bottles to its customers so as to become liable to pay sales tax on the price or deposit realised therefor. 8.. In that case, the invoice spoke of deposit on bottles and that it was shown that a sum of Rs. 11,62,974 was refunded out of the bottle deposit amount of Rs. 30,57,143. However, there was no record which indicated the terms under which deposit would be repaid and no communication to the assessee's customers in this regard was shown. While referring to the United Breweries case [1997] 105 STC 177 (SC) the following observations were made. "The judgment in the case of United Breweries Ltd. [1997] 105 STC 177 (SC); (1997) 3 SCC 530 proceeded upon the very clear terms of the bailment that were made known by circulars to the customers. The judgm....