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TMI Blog2012 (4) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... ntions of the petitioner open to be urged before the appellate authority. W.P. dismissed. - W.P. Nos. 48848 & 48855-48865 of 2011 - - - Dated:- 20-4-2012 - PATIL B.S., J. For the Appellant : N. Venkataraman, Senior Advocate for Harish V.S. for M/s. Harish Co. For the Respondent : K.M. Shivayogiswamy, Additional Government Advocate, ORDER:- B.S. PATIL J. The petitioner is a company incorporated under the Companies Act, 1956. It is engaged in the manufacture and sale of beer. 2. In these writ petitions, petitioner is calling in question the order dated December 19, 2011, passed by the respondent-Deputy Commissioner of Commercial Tax, (Audit)-6.6, DVO-6, Peenya, Bangalore, under sections 39(1), 72(2) and 36 of the Karnataka Value Added Tax Act, 2003 (for short, the Act ) vide annexure K and the consequential demand notices issued. 3. By the impugned order, the assessing officer has held that the assesseecompany was liable to pay tax at 12.5 per cent on the sale of bottles along with interest on the balance output tax due and payable from the date of its non-payment till the date of quantification of the taxes payable by the assessee-company. 4. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner, the returns were deemed to have been accepted as per section 38(1) of the Act. That being the position, the petitioner's business premises was visited on July 6, 2011. Pursuant whereof, a show-cause notice was issued proposing to treat the amounts charged and collected as deposits towards bottles and shown separately in the tax invoice as representing sale price of the bottles under an independent contract of sale of the said bottles. The petitioner filed its objections stating that in terms of section 4(2) of the Act, no tax was leviable as the rate applicable to packing material shall be the same as that of the goods contained in the packing material. Therefore, beer being exempted under entry 34 of the First Schedule to the Act, the bottles which constituted the container or the packing material containing the beer would also be exempted in terms of section 4(2) of the Act. The petitioner also relied on the judgment of the apex court in the case of Premier Breweries v. State of Kerala [1998] 108 STC 598 (SC); [1998] 1 SCC 641 (SC). However, the assessing officer has rejected the contention of the petitioner and has passed the impugned order levying tax on the amounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement, the assessee-company is entitled to receive the amount for the quantity of liquor only and the bottles are not part of the sale consideration as per the tax invoices and the agreement. He further contends that in terms of rule 2AE of the Karnataka Excise (Excise Duties Fees) Rules, 1968, the assessee-company declares and claims deduction on bottle deposit to avail of exemption form the levy of additional duty. He also contends that if the sale of beer and bottles are one and the same, then the manufacturer of the same has to pay additional excise duty equal to the value of the bottles. In the light of this and having regard to the conditions incorporated in the agreement, he contends that sale of bottle takes place at a later date as per the terms printed on the reverse side of the tax invoices. Therefore, if the KSBCL failed to return the bottles after the expiry of 30 days, the deposit so collected shall stand forfeited and recognised as income from the sale of bottles. For this reason, he contends that the parties had intended between themselves to transfer the property in bottles for consideration independent of the goods packed and sold therein. 11. In the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make any different, if the containers were shown to have been sold and charged separately. When the goods are exempted from tax, no tax is leviable on the containers. This will be the position even when the goods and the containers are sold and charged separately. 13. This ratio laid down by the apex court in connection with the provisions contained in the Kerala General Sales Tax Act is sought to be distinguished by the learned Additional Government Advocate stating that there was no collection of bottle deposit and that the assessee did not claim any deduction of bottle deposit under any statutory provisions to avail of exemption from levy of duty and that there was no mention of any forfeiture clause for non-return of bottles and non-refund of deposits. He also points out that the packing materials, namely, cardboard cartons, had been sold with the liquor in the facts of the case before the apex court and that the assessee pleaded before the apex court that the rate of tax applicable to packing materials was to be applied and not the rate at which the liquor was taxable. 14. He further points out that the decision rendered in the case of Kalyani Breweries Ltd. v. State of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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