STATE OF PUNJAB Vs. DEWANS MODERN BREWERIES LIMITED

JUDGEMENT

(1.) The respondent company in this appeal by special leave has a Distillery and Brewery at Jammu. It maintains wholesale 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 quashing of the said order and to restrain the appellants from recovering the amount of Rupees 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 respondent had to charge the fixed price from its retailers holding L-2, L-4, L-5 and L-10 licence. The respondent-company holds L-1 licence which is meant for whole-sale dealers. The State contested the application and in its counter asserted that the excise trade like many other trades, or even more, had to be regulated and controlled by various Rules and Regulations and in spite of all the restrictions placed thereby an area was still left where the whole-seller and the retail purchaser had to arrive at an agreement by their volition. According to the case of the appellants.

(2.) Following a Division Bench decision of the Punjab and Haryana High Court in Jagajit Distilling and Allied Industries Ltd. v. The State, 28 STC 709 a learned single Judge of that Court allowed the writ application and quashed the assessment order. A Letter Patent appeal from the said order was dismissed in limine. Hence this appeal.

(3.) This case, in our opinion, is squarely covered by a recent decision of this Court delivered by a Bench of seven Judges in M/s. Vishnu Agencies (Pvt.) Ltd. v. Commercial Tax Officer, (1978) 2 SCR 433. The High Court in the case of Jagajit Distilling and Allied industries Ltd. (supra) had mainly relied upon two decisions of this Court to hold that the transactions in that case were not sales. The said decisions are M/s. New India Sugar Mills Ltd. v. Commr. of Sales Tax Bihar, 14 STC 316 and Chhittar Mal Narain Das v. Commr. of Sales Tax, U. P. 26 STC 344. In the case of Vishnu Agencies (supra) the former case was considered in paras 36 to 39 of AIR volume at pages 463-464 and it was held that the view expressed in the majority judgment was not good law and the one contained in the minority judgment was approved. Chhittar Mal's case was also considered in paragraphs 44-45 at page 467 and it was distinguished on the ground that the said decision "can be justified only on the view that clause 3 of the Wheat Procurement Order envisages compulsory acquisition of wheat by the State Government from the licensed dealer." But then the criticism in that case of the Full Bench decision of the Allahabad High Court in Commr. Salestax, U. P. v. Ram Bilas Ram Gopal, AIR 1970 All 518 "which held while construing clause 3 that so long as there was freedom to bargain in some areas the transaction could amount to a sale though effected under compulsion of a Statute" was not endorsed. It is, therefore, plain to that extent Chittar Mal's case is also not good law. The decision of the High Court in Jagajit's case, (1972 Tax LR 1611) (Punj and Har) is no longer good law.