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TMI Blog2017 (6) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... s dated 8th December, 1998 (Ex. "C") and 9th December, 1998 (Ex. "D") and after inquiring into the validity and/or legality thereof to quash and set aside to the same. (b) that without prejudice to and in the alternative to the above, the Petitioner prays for a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, Order or direction of this Hon'ble Court restraining the Respondents from levying or collecting Sales Tax on goods manufactured before 9th December, 1998. (c) that pending the hearing and final disposal of the Petition, the Respondents be restrained from levying or collecting 8% Sales Tax on stock which has labels of "Maximum Retail Price Rs. ....../inclusive of all taxes and duties" and which has been manufactured prior to 9th December, 1998." All members of the Association are treated as Petitioners. 3 Pursuant to the order passed by this Court dated 21st September 2010, which is reproduced below, the individual retailer's (list of members is placed on record), have paid the court fee accordingly. We have considered their challenge based upon the submission and averments so made at the time of final hearing of the matter. " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abels having M.R.P. Printed on them. 8 By Circular dated 9th December, 1998, the Petitioners were informed that by Government Notification dated 8th December, 1998, the Maharashtra Potable Liquor (Retail sale fixation of maximum retail price) Rules, 1996 had been amended and that the slogan mentioned on the label also was amended. By the Circular it was further mentioned that all goods manufactured before 9th December, 1998 would be subjected to payment of sales tax which would be collected and payable by the FL II Licensees. Hence by means of the Circular, the Petitioners have been directed to collect Sales tax at the rate of 8% from the customers over and above the Maximum Retail Price (inclusive of all taxes) printed on the labels. The restricted submission. 9 The stock held by the Petitioners as stated, had already been subjected to levy of excise duty which was inclusive of all taxes including Sales Tax since Sales Tax was merged with Excise duty on 12th October, 1979 and thereafter no sales tax had been payable by the Petitioners. The Petitioners' counsel contended that by the Notification dated 8th December, 1998 and 9th December, 1998, the Petitioners are being subje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indian Made Foreign Liquor manufactured prior to 9/12/98 may be sold without amending the label. However, this stock will be subject to payment of sales tax when sold in retain by FL II licensees. (02) Stock manufactured after 9/12/98 will have to be stamped with the words (Excluding sales tax). This facility of stamping the labels will be available to manufacturers and licensees holding Form "K" licences only till the stock of existing labels is exhausted or 28/2/99, whichever become applicable earlier. Thereafter i.e. from 1/3/99 instead of stamping labels, the words "Excluding Sales Tax" will have to necessarily be printed on the label. Necessary action for granting permission for using labels without these words will be taken by the concerned Superintendents in the State and the Commissioner's Office will grant the necessary permission for use of the labels to licensees holding "K" licensees." 14 The circular dated 8.12.1998 issued by the Finance Department under the Bombay Sales Tax Act in exercising powers conferred by subsection (1) of Section 41 of the Bombay Sales Tax Act, whereby inserted the impugned subject entry "b" which is as under: "(b) after subentry (b), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o also the right of licensees, if any, need to be tested, based upon the averments and the case, so made out. It is also clear that such licensees are always governed by the provisions of these Acts, and the Rules made thereunder including the Notification and Circulars, as the privilege/permit is granted by the State to do such business of selling such liquor/products, which falls within the ambit of the Statutes. The power of State and/or statutory authority to impose such tax and/or collect the sales tax within the frame work of law, unless case is made out, need to be respected by all the concern. The challenge to sales tax demand by the retailers/vendors and not by the consumers, is unsustainable . 19 The consumers are required to pay the valid sales tax. The vendors are required to collect it, at the time of sale of products itself. The presumption, as already recorded of validity including the respective power of such authority to bring in and/or impose sales tax on such transaction, is always in favour of the authority and the State. The vendors/retailers challenge even otherwise is unsustainable, in reference to the challenge so specifically raised, stating it to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consumers, in addition to the maximum retail price already mentioned on the label. The Department, therefore, would deal with the individual cases, based upon the reply and/or defences so raised, if any and may pass appropriate order. No case for main reliefs so prayed. 22 The background events and the valid provisions and as no specific case is made out and even considering the settled provisions of Taxing Statute, by the Petitioner/Association to grant the relief of quashing and setting aside those Notifications/circulars, as prayed. No case is also made out to declare and/or grant any restrainment order from levying and/or collecting sales tax on goods manufactured before 9th December, 1998. This is also for the reason that apart from the clear provisions of law and the notification, the State, in fact, has granted the respective and/or concerned vendors permission to collect the sales tax as reflected in Circular dated 9th December 1998, even the products manufactured prior to 9th December 1998 without amending the labels. It was made clear that the stocks would be subject to payment of sales tax when sold in retail by FL II licence. It is also made clear that the stock manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise, as recorded, bound to follow the Rules, Regulations and conditions so imposed while permitting them to sell such products. This includes the liability to collect the sales tax and make the payment accordingly to the Department. The special circumstances of non-collection of sales tax. 25 In the present case, as noted above, there was reasonable doubt and the confusion that resulted into even putting advertisement dated 3.2.1999, by the Department for the concerned vendors and the consumers, about their liability to pay/collect the sales tax in addition to the price mentioned on the label. All have acted after the advertisement. This Court on 8 February 1999, by the interim order not stayed the recovery of sales tax pursuant to impugned notification, but directed the Respondent not to insist on deposit of sales tax from vendors (FL II licence vendors) who have not collected the same. This is a facet which the Department needs to consider while dealing with the individual matters/the demand so raised and to pass appropriate order keeping in mind non-recovery of sales tax in view of the interim order passed by this Court dated 8 February 1999, which has been in force till ..... 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