LexSTATE OF PUNJAB & ORS. versus DEWANS MODERN BREWERIES LTD.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A B c D E F G H 568 STATE OF PUNJAB & ORS. v. DEWAN'S MODERN BREWERIES LTD. March 16, 1979 [N. L. UNTWALIA AND R. S. PATHAK, JJ.J Punjab General Sales Tax Act 1948-Sales effected on permits prescribing price, quantity and the person to whom goods should be sold-Sales tax if j' / could be levied-Tax levied retrospectively-Validity of-Concensuality if lack- ing where dealer did not know that tax was to be paid. The sa]es tax authorities levied tax on the sales of liquor effected by the respondent who was a whole saler in that commodity. Impugning the levy, the respondent contended in the High Court that when it sold liquor against per- mits issued by the authorities there was no volition because the price and 1he quantity of goods to be sold and the person to whom sold were all fixed and therefore there "'as no sale in the eye of law which would attract tax. The Department, on the other hand, contended that even when goods were sold against a permit there was still an area of volition in that the parties could decide on the quality and brand of liquor, the quantity, whether in bulk or in instalments. the size of the package and so on, all of which showed that thf.re was no restraint on the volition of the parties and therefore there was sale which attracted tax. A single judge of the High Court, following a decision of the Division Bench of the same High Court in Jagatiit Distilling and Allied Industries Ltd. v. The State [28 STC 709], quashed the order of assessment. A Division Bench dismissed the appeal in limine. Allowing the State's appeal HELD : The transactions were sales exigible to tax. [571 G] 1. The decision of this Court in Vishnu Agencies (Pvt.) Ltd. v. Commercial Tax Officer, [1978] 2 SCR 433 justifies imposition or sales tax on the sale of liquor on permits. A conspectus of the provisions of the Punjab Excise Act and the Rules shows that there is an area of agr~ement sufficient enough for the parties to bring, by their volition, the impugned transctions within the ambit of sales. [570 G; 571 A] Vishnu Agencies (P) Ltd. etc. v. Commercial Tax Officer & Ors. Etc., [1978] 2 SCR 433; followed. Jagatiit Distilling and Allied Industries Ltd. v. The State, 28 STC 709 over- ruled. 2 (a) It is well settled that sales tax could be imposed retrospectively. TI1erefore, even though in this case the tax was levied retrospectively by a validation ordinance, the respondent would be deemed to have entered the trade and carried it on on the basis that it would be, liable to pay sales tax. [571 DJ • • .. ' -l PUNJAB v. MODERN BREWERIES ( Untwalia, !.) 5 6 9 '(b) Even assuming that the respondent carried on the trade thinking that it would not be liable to pay sales tax, the area of concensuality still left for the purpose of agreeing to the final terms of the transactions between the res· pendent and its retail dealers was quite sufficient for the application of the ntio of Vishnu Agencies. [571 F-G] C1vn, APPELLATE JURISDICTION : Civil Appeal No. 2028 1974. of Appeal by Special Leave from the Order dated 6-9-1975 of the '( Punjab aud Haryana High Court in LP.A. No. 516/73 . .._.. Hardev Singh and R. S. Sodhi for the Appellants. A B L. N. Sinha, P. P. Singh and E. C. Agarwala for the Respondent. C The Judgment of the Court was delivered by UNTWALIA J.-The respondent-company in this appeal by special 1eave has a Distillery and Brewery at Jammu. It maintains whole- sale depots at various places in the State of Punjab, the main depot being at Ludhiana. As a whole-seller it supplied Indian made foreign liquor to permit holders on the permits issued by the respective Excise and Taxation Officers, the competent authorities under the Punjab Excise Act and the Rules framed thereunder. Sales tax under the Punjab General Sales Tax Act, 1948 was imposed in respect of the sales aforesaid by an order of assessment dated the 30th November, 1972. The respondent, thereupon filed a Writ Petition in the High Court for the quashing of the said order and to restrain the appellants from recovering the amount of Rs. 46,396.22 paise from the petitioner. The main ground of attack on the imposition of sales tax was that the -alleged sales were not sales in the eye of law as the respondent had no volition in the distribution of liquor which was received from the manufacturing concern at Jammu. The prices were fixed by the ·Competent authorities and the respo
Excerpt shown. Read the full judgment & AI analysis in Lexace.