PREMIER BREWERIES LTD Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) This petition is directed against the order of the Appellate Tribunal dated 15th February, 1980, made in S.T.A. 606 of 1979.

(2.) The petitioner, who is a registered dealer under the Karnataka Sales Tax Act, 1957, is carrying on brewery business. For the assessment period from 1st January, 1977, the petitioner filed a return claiming exemption of a sum of Rs. 48,839 under rule 6(4)(f) and (ff) of the Karnataka sales tax Rules, 1957, being the packing and forwarding charges at the rate of Rs. 4 per crate. This claim was rejected by the assessing authority on the ground that the said charges were incurred prior to the sales effected. The Deputy Commissioner of Commercial Taxes (Appeals), Bangalore City, also did not give any relief to the petitioner. While dismissing the appeal of the petitioner, he observed that there was no packing involved at the time of sales of liquor bottles. With regard to the claim for deduction of forwarding charges, this is what the Deputy Commissioner observed :

(3.) Before we examine the contentions urged, it will be useful to refer to the nature of the activities of the petitioner so far as they are found on record. The petitioner-company is not having any manufacturing unit at Bangalore or, as a matter of fact, not even in the State to Karnataka. It manufactures liquor at Palghat, in Kerala State. It had, during the relevant period, sales depot at No. 29, B.K.H. Road, Bangalore. The petitioner got the stock from Palghat and sold at the sales depot. From the letter dated 12th June, 1978, written by the petitioner to the Commercial Tax Officer, it will be noticed that the stocks in bottles were received either in crates, in cartons or in gunny bags and after receipt of the stock, it would be unloaded at the sales depot and packed again either in cartons or in crates. For out station delivery they were packed necessarily in cartons to avoid risk in transport. For local delivery, they were usually packed in crates. Before doing this they had to observe certain formalities by affixing seal on each bottle with the signature of the Excise Inspector. The petitioner had to engage workers for unloading and repacking the crates or cartons. After affixing the seals, the petitioner despatched the goods to the dealers, ordinarily in tempos by paying the hire charges. Unloading work at the dealer's point was also at the petitioner's cost.