9911796707
TMI Blog1991 (10) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... e of beer, etc. The assessee filed his quarterly returns showing gross turnover at Rs. 1,81,59,219.56. The deductions were claimed in respect of sales of tax-free goods and sales made to the registered dealers. The Assessing Authority, Ludhiana, vide its order dated April 12, 1962, assessed the dealer to sales tax including penalty and interest at Rs. 5,23,262.35 for the assessment year 1979-80 under the Punjab General Sales Tax Act and to Central sale tax including penalty and interest at Rs. 9,266.99. The Assistant Excise and Taxation Commissioner, Ludhiana, exercising the powers of Commissioner (hereinafter referred to as "the revisional authority") in its revisional jurisdiction initiated the proceedings to examine the legality or propriety of the assessment orders framed by the Assessing Authority, Ludhiana. It was discovered that the dealer did not include sale price of bottles supplied with beer in the gross turnover and that the dealer was liable to pay sales tax at the rate of 10 per cent under the Punjab General Sales Tax Act (hereinafter referred to as "the State Act") and the Central Sales Tax Act (hereinafter referred to as "the Central Act"). The revisional author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contents of the bottle, that is the beer only but has to sell beer in bottled condition. Opened beer bottles cannot be sold by a L1 licensee to the consumers. L1 licensee is under no obligation in the matter of return of bottles to the dealer; further L1 licensee is left with no domain over the bottles sold to the customers as under mandate of law beer can only be sold in sealed bottles. Factually, it was conceded before the Tribunal that not a single bottle was in fact returned by the L1 licensee to the dealer. Such being the position, the Tribunal came to a firm finding of fact that the present case was not a case of bailment but a case of sale of bottles by the dealer to the L1 licensees and, therefore, the dealer was liable to pay the sales tax on the price of bottles as had been held by the revisional authority. We have heard the learned counsel for the parties at length. The question to be determined in this backdrop of facts is as to whether this was a case of "bailment" as claimed by the dealer or a case of "sale" of bottles as found by the Tribunal? The word "sale " has to be understood in its meaning as given under the Sale of Goods Act. The distinction between "sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed for sales tax though not under section 7(1)(a), but under section 7(1)(c) of the Act. But the assessees would be liable to pay sales tax only in respect of the unrefunded amount." Their Lordships of the Bombay High Court in Arlem Breweries' case [1983] 53 STC 172 relied upon a Supreme Court judgment in Punjab Distilling's case [1959] 35 ITR 519; AIR 1959 SC 346 the same judgment on which reliance was placed by the Tribunal in its order as well, to come to the conclusion that since an agreement between the dealer and the purchasing dealer did not create any obligation on the purchaser for return of bottles coupled with the fact that no time-limit was fixed for the return of the bottles, the case was one of "sale" and not "bailment"; further their Lordships differed from the view taken by the Kerala High Court in Deputy Commissioner of Sales Tax v. McDowell Co. Limited [1980] 46 STC 79 and State of Tamil Nadu v. McDowell and Company Ltd. [1980] 46 STC 85 (Mad.) on which reliance has been placed by the learned counsel appearing for the dealer to canvass the proposition that the present case is one of "bailment" and not "sale" of goods. We agree with the view taken in Arlem Bre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the sale was referred to as cost of the bottles and this, the High Court said, constituted the sale price of the bottles although described as a deposit. In Jamana Flour Oil Mill (P) Ltd. v. State of Bihar [1987] 65 STC 462; AIR 1987 SC 1207 this Court affirmed the finding that there was an implied agreement of the sale of gunny bags. It said: 'Admittedly gunny bags are a different commodity and sale thereof is assessable to tax at 41/2 per cent. It is not disputed that the appellant bought gunny bags for packing wheat products for the purpose of sale. The Control Order contemplates a net weight which means that the weight of the bag is included in the price to be charged by the dealer. Under the explanation when packing is done in cloth bags, a higher rate is admissible. The scheme clearly suggests that the price of gunny bags is inclusive and where cloth bag is used, a higher price over and above what has been provided for ordinary containers is permitted.' It is, therefore, perfectly plain that the issue as to whether the packing material has been sold or merely transferred without consideration depends on the contract between the parties. The fact that the packing is of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the words "security deposit" implied an obligation on the L1 licensee to return the bottles to the dealer. These words, in the absence of any other evidence, would not create an obligation on L1 licensee to return the bottles to the dealer specially when L1 licensee sells the beer to his customers in bottled condition with no corresponding obligation on the customer to return the empty bottles to the L1 licensee. It may further be noticed that there was no time frame fixed for the return of bottles by L1 licensee to the dealer to obtain the refund. It was further conceded by the learned counsel appearing for the dealer in this Court that on every consignment to the L1 licensee a fresh deposit of security was taken for the bottles supplied. It is admitted position in this case that not a single bottle was in fact returned by the L1 licensee to the dealer. We are in agreement with the view taken by the Bombay High Court in Arlem Breweries' case [1983] 53 STC 172 which in a way stands approved by their Lordships of the Supreme Court in Raj Sheel's case [1989] 74 STC 379. Accordingly we answer the question in the affirmative, i.e., in favour of the Revenue and against the dealer and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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