2000 (5) TMI 1059 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to order by Excise Commissioner, Government of Bihar; Prayer for declaration on sales tax and excise duty; Recall of order by State Government; Challenge to circular letter by Commissioner-cum-Secretary, Commercial Taxes Department; Dispute on levy of sales tax on country liquor; Legal validity of fixing wholesale price inclusive of excise duty for sales tax calculation.

Challenge to Order by Excise Commissioner:
The writ petitions were filed to challenge an order issued by the Excise Commissioner, Government of Bihar. However, during the proceedings, the State Government recalled the order in question. The petitioners then redirected their challenge towards a circular letter issued by the Commissioner-cum-Secretary, Commercial Taxes Department. This change in focus led to arguments for different reliefs than originally sought in the petitions.

Prayer for Declaration on Sales Tax and Excise Duty:
The petitions sought declarations that no sales tax was payable on subsequent sale of country liquor, the notification adding excise duty to the cost price was illegal, and sales tax should be calculated based on sale price excluding excise duty. The petitioners also prayed for setting aside the notification and quashing the tax, including during a specific period.

Recall of Order by State Government:
The State Government recalled the order challenged in the writ petitions, which should have resolved the petitioners' grievances. However, the petitioners continued to challenge a circular letter issued by the Commissioner-cum-Secretary, Commercial Taxes Department, insisting that sales tax on country liquor should not include excise duty in the wholesale price calculation.

Dispute on Levy of Sales Tax on Country Liquor:
The petitioners argued against including excise duty in the wholesale price for calculating sales tax on country liquor. They cited legal precedents to support their position, while the Government Pleader argued in favor of including excise duty in the wholesale price based on Supreme Court decisions and a full bench decision of the Kerala High Court.

Legal Validity of Fixing Wholesale Price Inclusive of Excise Duty:
The dispute centered around whether the wholesale price of country liquor for sales tax calculation should include excise duty. While the petitioners relied on legal decisions to oppose this inclusion, the Government Pleader argued for the inclusion of excise duty in the wholesale price. The court noted the arguments but emphasized the need to maintain the scope of the writ petitions without allowing further expansion or changes.