9911796707
TMI Blog1997 (5) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... briefly stated, are that the petitioner-company had set up a factory engaged in the manufacture of chemical preparations and afterwards the petitioner-company obtained a licence in form P.D.-2 for setting up a distillery. The distillery so set up is engaged in the manufacture of industrial alcohol. In para 7 of the writ petition it is clearly averred that the entire plant, that is, the chemical unit as well as the distillery which are situated in the same premises are owned by the petitioner-company. It is averred that the entire industrial alcohol manufactured by the distillery of the petitioner-company is being used in the chemical unit of the petitioner-company. Since the entire industrial alcohol manufactured in the distillery of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... So the question for consideration is whether purchase tax under the Act of 1939 can be levied in the facts and circumstances of the case when the entire alcohol produced by the petitioner-company is admittedly consumed captively. 6.. Section 3, sub-section (1), clause (c) of the Act of 1939, which is charging section runs as follows: "(c) There shall be levied at the point of first purchase of alcohol in the State a tax at the rate of 40 paise per litre for the first million litres and at the rate of 20 paise per litre for the remainder payable by the purchaser, and such tax shall be collected and paid in the prescribed manner to the State Government." 7.. It is trite that sale and purchase are two sides of the same coin. Unless there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lla unit paid for the cement supplied by the Churk Cement Factory. At the stage of the assessment proceedings, the Dalla unit took up the stand that the transaction did not amount to sale as both the Churk Cement Factory and the Dalla Cement Factory were owned by the State Government. This contention was rejected by the Sales Tax Officer, the appellate authority and by the revising authority, as well. Thereafter the dispute was carried under article 226 before this Court and then a learned single Judge of this Court observed as follows: "Before a transaction can be taxed and included in the turnover of a dealer, it has to be a sale. Although the word 'sale' as defined in section 2(h) does not specifically mentioned that the transaction mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Cement Corporation Ltd. [1979] 43 STC 476 (All.) ; 1978 UPTC 653. There is nothing to indicate in the charging section 3(1)(c) of the Act of 1939 that the requirement that there should be two parties for the transaction of sale and purchase is dispensed with. In the case at hand admittedly the distillery as well as the chemical factory are owned by the petitioner-company and the entire industrial alcohol manufactured in the distillery is being admittedly consumed captively in the manufacture of chemical preparations and, therefore, there is no transfer of goods by the petitioner to any other entity. 12.. In Bhopal Sugar Industries Ltd., M.P. v. D.P. Dube, Sales Tax Officer, Bhopal Region, Bhopal [1963] 14 STC 406 (SC) ; AIR 1964 SC 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew taken by us is further fortified by the decision in the case of Ram Chandra Kailash Kumar & Co. v. State of U.P. AIR 1980 SC 1124. In this case the producer-trader-an agriculturist-produced paddy in his own fields and he also owned a rice mill within the market area. He milled paddy grown by him into his own rice mill and sold the rice. Then the question arose whether there was transaction of sale of paddy and if so whether market fee was chargeable on that transaction. The court held that in such case no market fee could be charged on paddy because there was no transaction of sale and purchase of paddy and market fee could be charged only on the sale of rice. 15.. In Government Wood Works v. State of Kerala [1988] 69 STC 62, the Kera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf. 18.. For these reasons we are of the view that no purchase tax could be levied under section 3(1)(c) of the Act of 1939 on the transfer of alcohol from the distillery to the chemical factory of the petitioner-company. 19. So far as the refund of the amount of Rs. 1,02,34,845.52 is concerned, the petitioner-company may make a proper application for the refund thereof to respondent No. 2 who will consider the same in the light of the observations made hereinabove. 20.. In the result, the petition succeeds and is allowed with the observation that any application made by the petitioner for the refund of purchase tax already deposited by the petitioner-company under protest, will be decided by respondent No. 2 in the light of the above o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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