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TMI Blog1994 (7) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... etail in various excise ranges in the State during 1993-94. They have executed agreements prescribed by the Kerala Abkari Shops (Disposal in Auction) Rules, 1974 and have paid the rental (kist). Appellants contend that they are not liable to pay the tax under the new Abkari policy. 3.. Arrack is taxable under the Act at two points, under clause (v) of section 5(1) read with item 1 of the Fifth Schedule, the two points being the point of first sale by a dealer who is liable to tax under section 5 to a registered dealer and the second point being the point of last sale in the State by a dealer who is liable to tax under section 5. The rate payable at the first point of levy is 50 per cent. At the second point of levy it is 12.5 per cent. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 per cent of the rental for the Abkari shop. 5.. As a result of the new Abkari policy, State monopoly on the supply of arrack was abandoned and the contractors were permitted to import designated quantities of rectified spirit from other States for conversion into arrack or procure the supply from the distilleries in the State, preference being given for local supply. Rule 8 of the Disposal in Auction Rules was amended to carry out the policy on March 4, 1993 and also on March 31, 1993. As a result of the policy, the contractors became liable to pay tax at 62.5 per cent under the last column to item 1 of the Fifth Schedule on their retail sales of arrack in cases where the rectified spirit was imported from outside, as they became the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitely be imposed by the State in the interests of the public welfare and on the grounds mentioned in clause (6). Contention of the appellants that the levy in question is oppressive and destructive of their trade in arrack and thereby it violated their fundamental rights under article 19(1)(g) was rightly repelled by the learned single Judge. That apart, there cannot be any violation of article 19(1)(g) in the collection of sales tax at the compounded rate as it has been done in accordance with the option of the dealers/contractors. Actually the compounding provision takes off lot of botheration and annoyance to the dealers/contractors as they need not produce their registers, accounts, etc., before the authorities concerned. As they were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatute itself that the suggestion was not accepted. 8.. Appellants could have very well complied with the normal procedures of assessment by producing accounts, submitting returns and submitting themselves to the process of assessment and paid the tax due from them on the basis of the actual sales. Without doing so, appellants sought compounding. That was done after April 1, 1993. They were fully aware of the amendment introduced in the Finance Bill, 1993 on March 27, 1993, which came into force on April 1, 1993. As the option exercised by the appellants was accepted by the Revenue, it has resulted in a concluded binding contract. As a result of the option, they availed the benefit of paying the tax at the compounded rate in instalments. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and unreasonable. 10. It is always open to the appellants to pass on the tax to the consumer and recover it from him at the rates specified against item 1 in the Fifth Schedule to the Act. They could recover the tax at 62.5 per cent from the consumer on the sale price of the arrack. Contention of the appellants that the prices of arrack would go very high on account of the new Abkari policy and so people would be weaned away from arrack to foreign liquor was not found acceptable by the learned single Judge. As rightly held by the learned single Judge, each variety of liquor has its own votaries and so merely because of the price increase it is not likely that those who want to purchase arrack would switch on to some other variety of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e burden of showing that a classification rests upon an arbitrary and unreasonable basis is upon the person who challenges the law being violative of article 14 of the Constitution of India. That burden has not been discharged by the appellants. 13.. As the compounded rate of tax is payable pursuant to the option exercised by the appellants and as a concluded contract has arisen when they exercised the option and when it was accepted by the department, they cannot get exonerated of their liabilities and obligations under the Act. As rightly observed by the learned single Judge, writ petition under article 226 of the Constitution is not the appropriate remedy for impeaching the contractual obligations especially when they exercised their ..... X X X X Extracts X X X X X X X X Extracts X X X X
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