Pks Holdings, Kolkata vs Department Of Income Tax on 1 June, 2016
He held that decision rendered by the Hon'ble
Supreme Court in the case of Mcdowell & Co. Ltd. (supra) was a case in which the
issue was whether the liability to pay excise duty was that of the assessee. Even if the
liability to pay excise duty was of the Assessee, whether the amount of excise duty,
directly paid by the buyer, was includible in the turnover of the assessee for payment of
sales tax? Referring to several earlier precedents wherein the concept of excise duty had
been elaborated, the Constitution Bench held that the incidence of excise duty was
directly relatable to manufacture and its payment is the primary and exclusive
obligation of the manufacturer... but (only) its collection can be deferred to a later stage
as a measure of convenience or expediency. As to the other issue relating to turnover
also, the Supreme Court held that excise duty is a part of the consideration which a
buyer pays to purchase liquor and is includible in the turnover of the assessee
(manufacturer) although the buyer had directly paid it to the Excise Department. The
Supreme Court held that the Assessee cannot indulge in a colorable device to evade tax
6
7
ITA No.1677/Kol/2011
M/s. PKS Holdings
A.Yr.2007-08
by asking the buyer to direct pay excise duty to the Excise Department. According to
the CIT(A) the above observations of the Hon'ble Supreme Court were rendered in a
totally different context and cannot be applied to the facts of the case of the Assessee.