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TMI Blog2011 (10) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... 4B(2) of the U.P. Trade Tax Act, as manufacturer of caustic soda, chemicals, pesticides and formulations, which entitles it to purchase coal, as one of the notified goods, at the rate of two per cent, to be collected and deposited by the seller. A letter was written by the Deputy Commissioner, Commercial Tax, Sonbhadra in June 2003, to NCL, Bina/Kakari/Kharia, Duddhichua, Distt. Sonbhadra, directing it, that in view of the amendments made in the Trade Tax Act under section 4B on May 9, 2003, the seller should realise four per cent as trade tax and to deposit the same with the Trade Tax Department. The NCL was reminded that in the meeting dated June 17, 2003, it was informed and that since after May 2003, the trade tax be deposited on form No. 4 at four per cent. By this writ petition the petitioner has prayed for writ of certiorari to quash the communication dated 2/3rd September, 2003 issued by the NCL in response to the communication issued by the Deputy Commissioner, Commercial Tax and has also prayed for direction to prohibit respondent No. 1 from charging any tax in excess of two per cent on the purchase of coal from respondent No. 1 against form IIIB. By an amendm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ples of unjust enrichment were established by the Supreme Court. It was held that except in a case, where the tax or duty is held to be unconstitutional, the claim of refund cannot be entertained, if the burden has been passed on to the consumer. A person claiming refund cannot be allowed on the principles of unjust enrichment to claim refund of the duty, which has been paid illegally or by way of mistake, if burden has been passed on to the consumer. Shri Bharat Ji Agrawal, learned counsel for the petitioner, submits that taxes and duties paid on captive consumption for manufacture, are an exception to the principle laid down in Mafatlal Industries's case [1998] 111 STC 467 (SC); [1997] 5 SCC 536. In para 107, a clarification was made in Mafatlal's case [1998] 111 STC 467 (SC); [1997] 5 SCC 536 that the situation in the case of captive consumption has not been dealt with, in the opinion. The question was left open. He submits that in Bhadrachalam Paperboards Ltd. v. Government of Andhra Pradesh [1998] 111 STC 657 (SC); [1998] 6 SCC 250, the Supreme Court in the case of collection of sales tax on royalty and extraction charges paid for supply of bamboo and hardwood from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in its chemical unit. Such industrial alcohol is in fact raw material for the purpose of manufacture of chemicals. There is no question of passing on the burden of purchase tax to the consumers as such nor the petitioner can be said to have realised the purchase tax from its customers which it had paid on industrial alcohol. The honourable Supreme Court in the case of Bhadrachalam Paperboards Ltd. v. Government of Andhra Pradesh reported in [1998] 111 STC 657 (SC); [1998] 5 JT SC 314; [1998] UPTC 987 (SC), while considering the question of unjust enrichment and refund of tax paid by a person on the raw material which it had consumed in manufacturing of finished products, had held that the appellants therein have consumed goods for manufacturing of papers board, etc., and, therefore, the question of the appellants passing on the tax liability to the consumers would not arise. Consequently, the appellants therein were entitled for refund of the tax collected from them. Similar view had been taken by the honourable Supreme Court in case of the Deputy Commissioner, Andaman District Port Blair v. Consumer Cooperative Stores Limited reported in [1998] 8 JT SC 467. The Division Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f unjust enrichment. It held that as the goods were captively consumed, then in view of the law then prevailing the consequential relief of refund had to be ordered unaffected by the principles of unjust enrichment. This court in Union of India v. Solar Pesticides Pvt. Ltd. [2000] 2 SCC 705; [2000] 1 JT SC 577, has come to the conclusion that the principles of unjust enrichment would also be applicable in cases relating to captive consumption. We, therefore, direct that the ques tion as to whether any refund is to be given to the respondents, will be decided in the light of the principles laid down by this court in the aforesaid decision in Solar Pesticides' [2000] 2 SCC 705; [2000] 1 JT SC 577. The appeals are disposed of in the aforesaid terms. No costs. Shri S.P. Kesarwani has also relied upon the latest judgment of the Supreme Court in State of Maharashtra v. Swanstone Multiplex Cinema (P) Ltd. [2009] 24 VST 552 (SC); [2009] 10 JT SC 157, in which the burden of the exemption in tax on the cinema owners passed on to the consumer was not allowed to be refunded to the cinema owners. Following the Solar Pesticides Pvt. Ltd. [2000] 2 SCC 705; [2000] 1 JT SC 577 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would not further dip into the excise duty component. He will do so only in the case of a distress sale again. Just because duty is not separately shown in the invoice price, it does not follow that the manufacturer is not passing on the duty. Nor does it follow therefrom that the manufacturer is absorbing the duty himself. The manner of preparing the invoice is not conclusive. While we cannot visualise all situations, the fact remains that, generally speaking, every manufacturer will sell his goods at something above the cost price plus duty. There may be a loss-making concern but the loss occurs not because of the levy of the excise duty-which is uniformly levied on all manufacturers of similar goods-but for other reasons. No manufacturer can say with any reasonableness that he cannot survive in business unless he collects the duty from both ends. The requirement complained of (prescribed by section 11B) is thus beyond reproach-and so are sections 12A and 12B. All that section 12A requires is that every person who is liable to pay duty of excise on any goods, shall, at the time of clearance of the goods, prominently indicate in all the relevant documents the amount of such duty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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