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2014 (3) TMI 443 - HC - VAT and Sales TaxExemption from export duty - Inter-State sales of Rectified and Denatured Spirit - Held that - The decision in Commissioner of Sales Tax UP. Versus M/s. Upper Doab-Sugar Mills Ltd. 2014 (2) TMI 1003 - ALLAHABAD HIGH COURT followed - United Provinces Sales of (Motor Spirit, Diesel Oil and Alcohol) Taxation Act, 1939 is a sales tax law within the meaning of Section 2(i) of Central Sales Tax Act, 1956 - The alcohol being taxable under the 1939 Act, payment of central sales tax on inter-State sale of alcohol not exempted as per provisions of Section 8 (2-A) of the 1956 Act even though there was general exemption under section 4 of the 1948 Act - The orders of the Tribunal in revisions set aside - Decided in favour of revenue. Inclusion of export pass fee in taxable turnover Held that - Judgment in Commissioner of Income-Tax Versus Rampur Distillery And Chemicals Co. Limited 2004 (11) TMI 88 - ALLAHABAD High Court followed - export pass fee is the liability of the exporter to pay while getting the export permit - there was no liability of payment of export pass fee on the dealer under the Excise Act - No question of treating the export pass fee as part of the turnover Decided against revenue.
Issues:
1. Exemption of inter-State sales of Rectified Spirit and Denatured Spirit along with export duty 2. Taxability of export pass fee in the taxable turnover of the Assessee Analysis: Issue 1 - Exemption of inter-State sales of Rectified Spirit and Denatured Spirit along with export duty: The first question of law revolved around the justification of the Tribunal in exempting inter-State sales of Rectified Spirit and Denatured Spirit along with export duty. The judgment referred to a Division Bench ruling that clarified the taxability of alcohol under the United Provinces Sales of (Motor Spirit, Diesel Oil and Alcohol) Taxation Act, 1939, and the Central Sales Tax Act, 1956. The Division Bench's decision highlighted that the central sales tax on inter-State sale of alcohol was not exempted despite general exemptions under relevant acts. Consequently, the Court answered Question No. 1 against the Assessee and in favor of Revenue based on the established legal principles. Issue 2 - Taxability of export pass fee in the taxable turnover of the Assessee: The second issue concerned the inclusion of the export pass fee payable by an Ex. U.P. purchaser on the purchase of Denatured Spirit from a Distillery in the taxable turnover of the Assessee. The judgment cited a Division Bench ruling and an earlier Single Judge judgment to address this matter. The Court emphasized that the liability for the payment of the export pass fee rested with the purchaser and not the distillery. It was clarified that the amount of the export pass fee paid by the purchaser should not be considered as part of the turnover of the selling company. The Court further reiterated that the export pass fee was not a liability of the dealer and should not be included in the turnover. Consequently, Question No. 2 was answered in favor of the Assessee and against Revenue, leading to the partial allowance of the Revision and remand of the matter to the Tribunal for further proceedings in accordance with the legal principles established. In conclusion, the judgment addressed the issues of exemption of inter-State sales of Rectified Spirit and Denatured Spirit along with export duty, as well as the taxability of the export pass fee in the taxable turnover of the Assessee. The legal analysis provided clarity on the application of relevant laws and established precedents, resulting in a balanced decision that upheld the legal principles while ensuring fair treatment for the parties involved.
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