P VBEEDIES PRIVATE LTD Vs. STATE OF MYSORE

JUDGEMENT

(1.) The petitioner is a company incorporated under the Companies Act manufacturing and dealing in beedies, possessing a licensed private warehouse as defined by rule 2(xv) read with rule 140 of the Central Excise Rules, 1944, framed under the provisions of the Central Excises and Salt Act, 1944. On 1st June, 1955, this company purchased 7,895 1/2 pounds of unmanufactured tobacco for a sum of Rs. 15,650. On 2nd June, 1955, it purchased another 8,102 1/2 pounds of unmanufactured tobacco for Rs. 16,060. Theses purchases were made by the company from a dealer known as B. V. Baliga & Company. Theses quantities of tobacco purchased by the company were stored by it in its licensed private warehouse, and when the purchases were made by it the excise duty payable in respect of those quantities of tobacco had not been paid by the dealer from which the company purchased it. On 9th August, 1955, and 22nd August, 1955, the company, after obtaining the necessary permission for that purpose, removed those quantities of tobacco along with others for the purpose of preparing manufactured tobacco, viz., beedies. At the time of the removal of the tobacco in that way, the company paid a sum of Rs. 10,111-7-6 as the excise duty payable in respect of those goods under the provisions of the Act.

(2.) For the assessment year 1955-56, the company's turnover was taxed by the Deputy Commercial Tax Officer under the provisions of the Madras General Sales Tax Act. Then, the Assessing Officer did not include in the turnover of the company this sum of Rs. 10,111-7-6 as part of the taxable turnover. This assessment was made on 15th January, 1957. Acting under the provisions of section 12(1) of the Act, the Commercial Tax Officer, in the exercise of his revisional powers, revised the assessment and made an assessment on 8th October, 1957, in the course of which he treated the excise duty amounting to Rs. 10,111-7-6 paid by the company as part of the taxable turnover. The company appealed to the Deputy Commissioner of Commercial Taxes and the Sales Tax Appellate Tribunal and eventually to the Commissioner of Commercial Taxes, without being able to obtain any relief from any one of them. This petition is accordingly directed against the order made by the Commercial Tax Officer on 8th October, 1957, treating the excise duty paid by the company as part of its taxable turnover.

(3.) The contention urged in this writ petition is two-fold. The first is that the Commercial Tax Officer was not right in thinking that the excise duty paid by the company in respect of the goods which it had purchased from Baliga & Co., was part of the purchase turnover of the company. The second is that even assuming such excise duty to be part of the purchase turnover of the company, there has been excessive inclusion of such excise duty in the company's taxable turnover by reason of the fact that the sum of Rs. 10,111-7-6 so added by the Commercial Tax Officer not only represented the excise duty paid in respect of the tobacco purchased by the company from Baliga & Co., but also from others.