Madhya Pradesh High Court
Sanghi Beverages Pvt. Ltd. vs Commr. Of Sales Tax on 30 November, 1995
Equivalent citations: 1998(98)ELT307(MP)
Author: S.B. Sakrikar
Bench: S.B. Sakrikar
JUDGMENT A.R. Tiwari, J.
1. These eight reference applications are filed by the applicant-assessee under Section 44(2) of the Madhya Pradesh General Sales Tax Act, 1958 (for short, "the State Act"), for direction to the Tribunal (Board of Revenue) to state the cases and refer the question of law, common in all these applications, as extracted below for our opinion:
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that excise duty recovered by the assessee from the purchaser formed part of the sale price on which sales tax was leviable?"
2. Facts are in a narrow compass. The applicant is a dealer engaged in the business of bottling soft drinks (Coca Cola, Fanta orange, etc.). It is liable to pay Central Excise duty at the rate of 20 per cent of ex-factory price and auxiliary duty levelled as 50 per cent of excise duty. The applicant was assessed for different years, i.e., 1974-75, 1976-77, 1977-78, 1978-79 and 1979-80 under the State Act and Central Sales Tax Act (for short, "the Central Act"). The Regional Assistant Commissioner, the assessing authority, turned down the contention that the excise duty and auxiliary duty were not parts of the taxable turnover and assessed by including the same under the State Act and Central Act. The first and second appeals did not result in fluctuation of fortune. View and order of the assessing authority were affirmed. Aggrieved, the applicant in all cases filed applications under Section 44(1) of the State Act which too were rejected on June 30, 1987, on the linchpin that decision was in conformity with the law laid down by this Court in (1982) 15 VKN 337 (Central Coalfields Ltd. v. Commissioner of Sales Tax, M.P., Indore) and by the Apex Court in (1985) 18 VKN 484; AIR 1986 SC 649 (McDowell & Company Limited v. Commercial Tax Officer) and as such there was no referable question of law. Similar view is taken in (1971) 4 VKN 389 (S.C.) (Delhi Cloth and General Mills Co. Ltd. v. Commissioner of Sales Tax, Indore). The applicant felt dissatisfied by the order of refusal to refer on the fulcrum that validity of the decision in case of McDowell & Company (1985) 18 VKN 484; AIR 1986 SC 649 was under consideration of larger Bench of the Supreme Court. The applicant has thus taken recourse to Section 44(2) of the State Act in these applications. It is significant to note that decision reported in (1982) 15 VKN 337 (Central Coalfields Ltd. v. Commissioner of Sales Tax) is now affirmed by the Supreme Court in 1994.
3. We have heard Shri Chaphekar, learned Senior Counsel with Shri Samvatsar for the applicant and Shri Piyush Mathur, learned Deputy Government Advocate for the non-applicant in all these applications heard analogously as entailing common question of facts and law.
4. The Tribunal held and rejected applications as under :-
"As observed in the Board's order the decision of the Board is based on the decision of our own High Court in Central Coalfields Ltd. v. Commissioner of Sales Tax (1982) 15 VKN 337. The view of our High Court is supported by the decisions of the Supreme Court in McDowell & Company Limited v. Commercial Tax Officer (1985) 18 VKN 484 and Delhi Cloth and General Mills Co. Ltd. v. Commissioner of Sales Tax (1971) 4 VKN 389. I thus find that the question proposed for reference has already been answered by the High Court of Madhya Pradesh and the Supreme Court. There is, therefore, no need for making these references."
5. Section 2(o) of the State Act and Section 2(h) of the Central Act define the "sale price" as meaning the amount payable to a dealer as valuable consideration for the sale of any goods less any sum allowed as cash discount but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before delivery thereof other than cost of freight, etc. Section 2(t) of the State Act defines "turnover" and Section 2(r) defines "taxable turnover" ascertainable after deduction therefrom the sale price and amount as enumerated vide Clauses (i) to (v). Section 2(n) defines "sale".
6. There is no indication about exclusion of the duties in question.
7. Section 64A, substituted by Act No. 33 of 1963, of Sale of Goods Act, 1930, however, provides that in contracts of sale, amount of increased or decreased taxes can be added to or deducted from the contract price. It is further clarified by Section 64A(2) of the aforesaid Act that the provisions of Sub-section (i) apply to any duty of customs or excise on goods or to any tax on the sale or purchase of goods. This provision, however, springs into action only when any duty or tax is imposed, increased, decreased or remitted after the contract for sale. Hence this provision is demonstrably inapplicable in the instant cases.
8. It is laid down in the aforesaid decisions that duties of excise, recovered by the seller from the purchaser were parts of the sale price for the goods sold. There is nothing to indicate that the assessee was authorised to pass on the duties to its buyers under the aforesaid Acts and as such the excise duties were parts of sale price and thus includible in taxable turnover of the assessee.
9. In Pike v. Bluce Church 397 US 137 at page 142 general contours were outlined in these words :
"Where the statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on inter-state commerce are only incidental; it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits."
10. Taxability is not shown to be excessive here.
11. Shri Chaphekar very frankly submitted that the decision rendered by this Court in (1982) 15 VKN 337 (Central Coalfields Ltd. v. Commissioner of Sales Tax) is affirmed by the Supreme Court on August 11, 1994, in Civil Appeal No. 1486 of 1981 (Central Coal Fields Ltd. v. Commissioner of Sales Tax) and in view of this position no question of law survives for reference and opinion.
12. The question as referred in these reference applications now stands concluded by the Supreme Court decision in (Central Coal Fields Ltd. v. Commissioner of Sales Tax). In the result there is no referable question in these applications.
13. Accordingly we are satisfied with the correctness of the decision of the Tribunal.
14. Consequently we reject all these applications with no order as to costs. The Counsel fee shall, however, of Rs. 500/- in each case for each side, if certified.
15. Retain the order in Misc. Civil Case No. 264 of 1987 and place one copy each in other connected cases as noted above.