9911796707
TMI Blog1974 (5) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale of such liquor has been lawfully imposed in view of the provision of section 6 of the Sales Tax Act; and (ii) beer is not "Indian-made foreign liquor" within the meaning of that expression used in entry 37 of Schedule B to the Sales Tax Act as amended with effect from 1st October, 1966. Section 4 of the Sales Tax Act (which is the charging section) provides that every dealer (subject to certain exceptions which are not relevant for us) whose gross turnover in a year exceeds the taxable quantum, shall be liable to pay tax on all sales effected by him. The petitioner admittedly falls within the definition of "dealer" as contained in section 2(d) of the said Act. Sub-section (1) of section 6 is in the following terms: "No tax shall be payable on the sale of goods specified in the first column of Schedule B subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column thereof and no dealer shall charge sales tax on the sale of goods which are declared tax-free from time to time under this section." Entry 37 in Schedule B as it existed at the time of the enactment of the Sales Tax Act in 1948, and the changes which it underwent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clined to accept this contention for the reasons stated hereinafter. All these beer, wine, rum and brandy serve the same purpose, i.e., intoxication. Their process of manufacturing is almost the same with slight variation. They all contain alcohol in varying quantities. The only distinguishing feature in all of them is that the quantity of alcohol and degree differ. All these reasons show that 'beer, wine, rum and brandy, etc.' are definitely Indian-made foreign liquor especially when the fact is that the term 'Indian-made foreign liquor' is not defined in the Act and is to be construed as understood in common parlance. There is no other information on the file." The first point relating to the scope, interpretation and legality of the exception contained in the exemption mentioned in entry 37 does not appear to have been specifically argued before the Assessing Authority as the same has not been dealt with anywhere in its order. Since, however, the matter has been raised and argued at length and is likely to arise in other cases also, I have considered it advisable to deal with the same. The submission of Mr. R.N. Narula, the learned counsel for the petitioner, is that if out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Anand Swarup on the expression "conditions and exceptions" used in section 6(1) of the Act is the correct one. The object of making this provision in section 6 is that despite exemption of a commodity from levy of sales tax by including it in column 1 of Schedule B, the sale of the same commodity may nevertheless be made liable to the incidence of the tax under that Act in certain circumstances which may be detailed in column 2. All the same, the article exempted under column 1 and the article made subject to the incidence of the tax by being mentioned in column 2 is expected to be the same and the incidence of the tax on the exempted article would be attracted only if the exceptions or conditions specified in column 2 relating to the sale of that article are fulfilled in a given case. This becomes still clearer from a reference to the various entries in Schedule B against which conditions and exceptions have actually been mentioned in column 2. "Vegetables" are mentioned in column 1 of entry 16. The exception carved out in column 2 of that entry is "except when sold in tins, bottles or cartons". The effect of reading both the columns of entry 16 together is that no tax is levia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entry 37 in Schedule B as it existed during the assessment year 1966-67. Section 3(14) of the Punjab Excise Act states that "liquor" means "intoxicating liquor, and includes all liquid consisting of or containing alcohol; also any substance which the State Government may by notification declare to be liquor for the purposes of this Act". It is not disputed that beer is a liquid and does contain some alcohol. Beer, therefore, undisputably falls within the statutory definition of liquor. Nor is there any dispute about the fact that the beer on which the tax has been assessed in the impugned order is Indian-made. What is contended is that beer manufactured in India cannot be called a foreign liquor. In subparagraph (2) of paragraph 2 of the Punjab Liquor Definitions, 1954, foreign liquor has been defined to mean: (a) all liquor imported by sea into India......; (b) all liquor manufactured in India (other than rectified spirit, denatured spirit and perfumed spirit) on which duty at a rate higher than that levied on country liquor is leviable; and (c) all beer (including ale, porter, stout and all other fermented liquors made from malt) manufactured in India or abroad. The statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore them and held that "Indian-made beer" fell within the description of "country-made liquor" in entries 38 and 39 and was, therefore, taxable under entry 39 only. But this was because of the special statutory definition of "country liquor" in explanation II appearing underneath the Second Schedule to the Mysore Act. The relevant explanation was in the following terms: " 'Country liquor' in items 38 and 39 means liquor manufactured in India, other than liquor manufactured and compounded in India and coloured and flavoured to resemble gin, brandy, whisky or rum imported from outside the territory of India." It is plain from a reading of the above-quoted explanation in the Mysore Act that in the absence of such an explanation occurring in the Sales Tax Act with which we are concerned the ratio of the judgment of the Mysore High Court in Krishnamurthy's case[1962] 13 S.T.C. 436. cannot possibly be of any avail to the petitioner. A special statutory definition of "country liquor" has been given in the Mysore Act. There is no such definition in our Act. As already observed by me, "beer" falls within the definition of "liquor". The beer in question was manufactured in India in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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