TaxTMI 
TaxTMI 
2008 (11) TMI 629
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....ted as per section 4 of the Central Excise Act, 1944 irrespective of actual sale consideration charged by the assessee for sale of the said commodity?" The appellate authorities below held in favour of the assessee that the assessing authority could not impose such additional tax on the assessee and unless sale consideration was shown to have been charged by the assessee from its purchaser under an agreement, no such additional tax could be imposed upon the respondent-assessee. Upholding the contention of the assessee that imposition of Central excise duty on the basis of assessable value computed as per section 4 of the Central Excise Act was hypothetical sale consideration as far as respondent-assessee was concerned and without dischar....
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.... of this court in the case of Assistant Commissioner, Anti Evasion, Commercial Taxes, Udaipur v. Vilas Udhyog reported in [2007] 18 Tax-update 184 in which the similar question though answered in a brief judgment, concludes this issue in favour of the respondent-assessee. The honourable Supreme Court in the case of Rajasthan Chemists Association [2006] 147 STC 542; [2006] 6 SCC 773 while dealing with the validity of section 4A inserted in the Rajasthan Sales Tax Act, 1994 empowering the State Government to impose sales tax on the basis of maximum retail price (MRP, for short) of commodity held that under section 4A of the Act for the taxable event that has occurred, the amount received or receivable is assumed to be different from that w....
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.... event that has occurred, the amount received or receivable is assumed to be different from which is neither received nor receivable and that amount which neither flows from the Control Order, nor which flows from buyer to seller under the contract but is relatable to a transaction of sale by a retailer which may not have come into existence. For the present, the price to which rate of tax is sought to be applied to a sale by a wholesaler to a retailer is neither the price agreed upon by the parties to the contract of taxable sale to which charge is attracted nor flows from the Control Order under which also, it is the price of formulation before end sale is to be determined within prescribed limits. 47.. The charging section 4 stipulate....
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....eduled drugs.' 50.. Applying the principles enunciated above, the inevitable conclusion is that when the wholesaler sells any formulation to a retailer in bulk quantity, taxable event of sale of goods takes place where the wholesaler and retailers are the parties to the contract, the goods in question are the formulations and the consideration is one which is agreed to between the parties to that transactions within the limits permissible by law. By substituting the assumed quantity of goods or a price which is not subject-matter of that contract of completed sale for the purpose of measuring tax the Legislature assumes existence of contract of sale of drugs by legal fiction which has not taken place and which cannot be consid....
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....and which cannot be the subject of legislation providing tax on 'sale of goods' by transplanting a sum related to as 'likely price' to be charged for subsequent sale to be taxed by the devise of measuring tax for the completed transaction which has become subject of tax. 54.. It may be relevant to recall here that this court in Hotel Balaji's case [1993] 88 STC 98 (SC); AIR [1993] SC 1048 held that where a tax was levied as a purchase tax and was confined to the purchase price paid by the buyer, and was not chargeable at the price at which the end produce was sold later, it had retained its character as a tax on purchase. 55.. If the legislation can provide for a measure of tax on subject of tax by substituting any....