1994 (8) TMI 284 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of excise duty in turnover calculation.

Analysis:
The revision petition involves a dispute regarding the inclusion of a sum of Rs. 15,35,357 in the turnover of a distillery dealer for the assessment year 1970-71. The primary issue is whether this amount, assumed to be excise duty paid by the dealer, should be considered in the turnover calculation. The dealer exported rum to the defense department, which is exempt from excise duty, but the assessing officer included the sum in the turnover due to the lack of proof that no excise duty was paid. The Assistant Commissioner remanded the matter for further investigation, and subsequently, the assessing officer found no basis to include the amount in the turnover.

The Commissioner filed a revision petition before the Sales Tax Tribunal, which observed deficiencies in the assessing officer's approach and remanded the case for thorough investigation, including summoning the excise authority if necessary. The Tribunal rejected the argument that the matter was final between the parties, asserting its jurisdiction to reexamine the issue. The revisionist contended that the excise duty amount should not be included in the turnover as it was not charged from the purchaser, citing a Supreme Court decision. The Tribunal's interpretation of the law was deemed incorrect, as the turnover should only reflect the consideration paid by the purchaser to the dealer.

The Tribunal's order was deemed unsustainable as the excise duty paid was an expenditure and should not have been included in the turnover calculation. The dealer had already included the price paid by the purchaser in its turnover, making the department's line of inquiry misguided. The Tribunal's decision was set aside, and the department's appeal related to the disputed amount was dismissed. The revision petition was allowed, with costs awarded to the revisionist.

In conclusion, the judgment clarifies the principles governing the inclusion of excise duty in turnover calculations and highlights the importance of considering the actual consideration paid by the purchaser to the dealer. The Tribunal's decision was overturned due to a misinterpretation of the law, emphasizing that only the real sale price realized by the dealer should be included in the turnover.