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2014 (3) TMI 441 - 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. Inclusion of export pass fee in the taxable turnover of the Revisionist-Assessee Analysis: Issue 1: The first question of law in this matter pertains to the exemption of inter-State sales of Rectified Spirit and Denatured Spirit along with export duty. The Court referred to a Division Bench judgment which ruled against the Assessee and in favor of Revenue. The Division Bench held that the United Provinces Sales of (Motor Spirit, Diesel Oil and Alcohol) Taxation Act, 1939 is a 'sales tax law' within the meaning of the Central Sales Tax Act, 1956. It was emphasized that the payment of central sales tax on inter-State sale of alcohol was not exempted despite a general exemption under section 4 of the 1948 Act. Consequently, the Court answered Question No. 1 against the Assessee and in favor of Revenue. Issue 2: The second question raised in the case concerns the inclusion of the export pass fee payable by the Ex. U.P. purchaser on the purchase of Denatured Spirit from a Distillery in the taxable turnover of the Revisionist-Assessee. The Court cited a Division Bench judgment and an earlier Single Judge judgment to support its decision. In the case of Hindustan Sugar Mills Ltd., the Court clarified that the liability for the payment of the export pass fee rests with the Ex. purchaser and not the distillery. The amount of export pass fee paid by the purchaser cannot be considered part of the turnover of the company selling the spirit. Similarly, in the judgment involving M/S Rampur Distillery and Chemicals Ltd., it was reiterated that the export pass fee is the liability of the exporter and not the dealer. As the dealer did not realize or pay the export pass fee, it should not be included in the turnover. Consequently, Question No. 2 was answered in favor of the Assessee and against Revenue. In conclusion, the Court partially allowed the Revision, setting aside the Tribunal's judgment on the mentioned issues and remanding the matter back to the Tribunal for further proceedings in accordance with the Court's findings.
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