9911796707
TMI Blog2000 (2) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... aining to bottle deposit was brought to assessment. In the first appeal, for the assessment year 1981-82, before the Deputy Commissioner of Commercial Taxes, it was observed that there was no agreement with the customers towards purchase of bottles and no obligation was cast upon the customers for the return with provision for time-limit. Therefore simply because the amount was mentioned as deposit for maintaining separate account for certain amount, it would not make it a deposit and would not partake of the nature of sale. Thus, the view of the assessing authority was confirmed. In respect of the assessment year 1982-83, the first appeal was preferred before the Appellate Assistant Commissioner. It was observed in the appeal that there being actually no refund of bottle deposits and that the wholesale section of the appellants business having been closed once for all, by no stretch of imagination can it be stated that the appellants have collected their bottle deposits of Rs. 1,91,316 and that they are holding them up for the purpose of refund when their retailers return the empty bottles. It is not the case of the appellants that they have refunded the deposit in the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng any tax on forfeited bottle deposit amount as contemplated in the decision reported in [1997] 107 STC 190 (SC) (Kalyani Breweries Ltd. v. State of West Bengal). The ratio of the decisions reported in 1997] 105 STC 177 (SC) (United Breweries Ltd. v. State of Andhra Pradesh) and [1997] 107 STC 190 at page 195 (Kalyani Breweries Ltd. v. State of West Bengal) squarely apply in the case of the petitioner. No sales tax has been collected by the petitioner on bottle deposit and in fact the department has allowed exemption in the earlier years on bottle deposit. In the balance sheet also in the liability side, this amount was included under the heading others . There was tacit agreement with the customers for return of bottles. The absence of time-limit for return of bottles is not the essence of contract. Further while delivering the empty bottles the customers should bear packing and incurred freight charges will not alter the character of the transactions. The Tribunal s decision in T.C. No. 517 dated January 23, 1986 relied on is incorrect. Similarly, in T.C. No. 273 of 1997 dated December 8, 1988 only forfeited deposit has been taxed. Thus the order of the Tribunal in approving th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he two years represented the bottle deposit collected but not refunded to the customers because the empty bottles were not returned to that extent. In this connection, it is relevant to note that the petitioner closed the liquor division with effect from September 29, 1982 consequent on the cancellation of the licence on account of Government policy in regard to liquor. Thus, the amount shown as bottle deposit for the years 1981-82 and 1982-83 and assessed to tax by the assessing authority were unrefunded amount utilised in the trading activities of the petitioner. No evidence was let in that these amounts were refunded subsequent to the closure of the liquor division with effect from September 29, 1982. In the light of the factual position, we shall examine the decisions relied on by the learned counsel for the petitioner. In [1997] 105 STC 177 in the case of United Breweries Ltd. v. State of Andhra Pradesh the Supreme Court referred to the circular of the Appellant which set out the following terms: (1) The refundable deposits were being collected on the bottles and the crates. (2) The appellant advised its customers to collect forty paise per bottle from the consumers as de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.. In [1997] 107 STC 190, in the case of Kalyani Breweries Ltd. v. State of West Bengal, the Supreme Court observed as follows: There can be no doubt that the facts and circumstances must be ascertained to determine whether or not the assessee had sold the beer bottles to its customers so as to become liable to pay sales tax on the price or deposit realised therefor. 8.. In that case, the invoice spoke of deposit on bottles and that it was shown that a sum of Rs. 11,62,974 was refunded out of the bottle deposit amount of Rs. 30,57,143. However, there was no record which indicated the terms under which deposit would be repaid and no communication to the assessee s customers in this regard was shown. While referring to the United Breweries case [1997] 105 STC 177 (SC) the following observations were made. The judgment in the case of United Breweries Ltd. [1997] 105 STC 177 (SC); (1997) 3 SCC 530 proceeded upon the very clear terms of the bailment that were made known by circulars to the customers. The judgment found that the intention of the brewer was to get the empties back, as evidenced by the fact that the rate of the deposit was less than the cost of the beer bottl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the assessee inasmuch as there was no refund of the amount after the closure of the liquor division on September 29, 1982. Therefore, we are of the firm view that the ratio of the decision of the Supreme Court in [1997] 107 STC 190 (Kalyani Breweries Ltd. v. State of West Bengal) in relation to the forfeited bottle deposit will squarely apply to the bottle deposit collected and utilised in trading activities without any refund as could be seen from the records which firmly established the closure of the business on September 29, 1982 as rightly observed by the Appellate Assistant Commissioner. Though the learned counsel for the petitioner contended that in the balance sheet under liability column others the bottle deposit account is included no documentary evidence was produced to show that such an amount was shown in the balance sheet and that this amount was refunded subsequently to the customers. In such circumstances, we find the order of the Appellate Tribunal in upholding the levy of tax on bottle deposit is quite in order. In fact, the petitioner acquired liquor from outside the State and therefore the transactions in bottles are first sales liable to tax and in such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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