NDLI: The Commercial Tax Officer & Anr. Vs. Mohan Breweries and Distilleries Limited

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Tamil Nadu General Sales Tax Act 1959 s.7-A
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Tamil Nadu General Sales Tax Act, 1959 (24 of 1993)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9 Referred Case 10 Referred Case 11 Referred Case 12 Referred Case 13
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Disposed Off
Headnote	Tamil Nadu General Sales Tax Act, 1959 – s.7-A – The assessee is engaged in the business of manufacture of Beer and IMFL products – For the purpose of the said business of manufacture of Beer and IMFL, the assessee purchased empty bottles from unregistered dealers situated outside the State as well as from non-dealers – The High Court held that the purchase of empty bottles from unregistered dealers is exigible to purchase tax u/s.7-A of the 1959 Act but, the assessee is entitled for the benefit of Clarifications dated 09.11.1989 and 27.12.2000 issued by the revenue till the same were withdrawn prospectively by the Clarification dated 28.01.2002 – Held: When the principles laid down by the Constitutional Bench in Nandanam Construction Co. are applied to the phraseology of Clause (a) of sub-s. (1) of s.7-A of the 1959 Act, four eventualities are covered thereunder, with reference to the treatment of goods in question viz., (i) when they are consumed in manufacture of other goods for sale; or (ii) when they are consumed otherwise; or (iii) when they are used in manufacture of other goods for sale; or (iv) when they are used otherwise – The bottles in question have neither been consumed in manufacture of Beer/IMFL nor they could be said to have been used in such manufacture of Beer/IMFL, hence elements (i) and (iii) does not exist – The empty bottles are filled up with liquor but such filling up has not resulted in the bottles themselves being used up and bottles have retained their basic identity, hence the activity in question does not fall within the ambit of element (ii) – Insofar as (iv) element ‘when they are used otherwise’ is concerned, the process of bottling with the use of bottles was the unalienable part of the complete chain of processes that the assessee was obliged to undertake for its business i.e. manufacturing and selling the liquor – By this process, the bottles were used by the assessee in such a manner that they were no longer available for sale in the form they were purchased from unregistered dealers – That being the position, the bottles have indeed been ‘used otherwise’ by the assessee – Therefore, the activity of assessee in relation to the bottles in question is clearly covered by element (iv) of Clause (a) of sub-s. (1) of s.7-A of the Act and making it exigible to purchase tax – As far as benefit of Clarifications dated 09.11.1989 and 27.12.2000 are concerned, the Constitution Bench in Ratan Melting & Wire Industries held that no direction can be issued to enforce a Clarification or Circular contrary to the declaration of law by the Courts – Thus, the High Court after having found that purchase tax was leviable on the turnover in question u/s. 7-A of the Act, could not have issued directions for benefit with reference to the Clarifications/ Circulars dated 09.11.1989 and 27.12.2000, particularly when such Clarifications/ circulars do not stand in conformity with the statutory provisions and its interpretation by the Courts – Hence, the order of the High Court as regards the operation and effect of Clarifications/Circulars dated 09.11.1989 and 27.12.2000, cannot be approvedTamil Nadu General Sales Tax Act, 1959 – Taxability of Cash discount on price – The assessee is engaged in the business of manufacture of Beer and IMFL and for the said purpose purchased empty bottles from unregistered dealers – The Assessing Officer disallowed the exemption on cash discount allowed by the assessee to Tamil Nadu State Marketing Corporation Limited and levied tax on the said cash discount – The assessee submitted that any cash or other discount on the price of goods sold cannot be included in the turnover for the levy of tax – The High Court relying on the decision in Neyveli Lignite Corporation Ltd. took the view that as per Explanation 2(iii) to s.2(r) of the Act, cash or other discount on the price of goods sold cannot be included in the turnover for the levy of tax and accordingly allowed in favour of the assessee and against the revenue – Held: The issue has rightly been decided by the High Court in favour of the assessee.Words and Phrases – ‘Consume’, ‘use’, ‘manufacture’, ‘in’ and ‘otherwise’ – discussed. Doctrines/Principles – Doctrine of pari materia – discussed
Judge	Hon'ble Mr. Justice Dinesh Maheshwari
Neutral Citation	2020 INSC 446
Petitioner	The Commercial Tax Officer & Anr.
Respondent	Mohan Breweries And Distilleries Limited
SCR	[2020] 6 S.C.R. 665
Judgement Date	2020-06-29
Case Number	7164

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