PHIPSON AND CO P Vs. GOVERNMENT OF MADRAS

JUDGEMENT

(1.) THESE Tax revision petitions raise a simple but important question of the taxability of foreign liquor under the Madras General Sales-tax Act and consequently under the Central Sales-tax Act. The petitioner Phipson and Co. (P)Ltd. deals in foreign liquor. The turnovers in dispute are Rs. 28972. 32 for 195758, rs. 67607. 94 for 1958-59 and Rs. 31047. 80 for 1959-60. These turnovers related to inter-state sales and the sales were not supported by C forms as required by S. 8 (4) of the Central Sales-tax Act. The department accordingly took the view that the confessional rate of tax in respect of inter-state sales provided under S. 8 (1) of the Act would not be available. The sales became accordingly liable to tax under S. 8 (2) (b) of the Central Sales-tax Act. Having regard to certain provisions of the Madras Prohibition Act, the department levied the tax at the rate of 50 per cent of the turnover. The petitioner carried an appeal to the Appellate assistant Commissioner. One of the contentions advanced then was that that provision of the Madras Prohibition Act upon which the department relied in imposing the tax at 50 per cent was not a sales tax law and therefore the rate specified in the provisions of the Prohibition Act would not apply. This contention was rejected. A further appeal to the Appellate Tribunal also failed.

(2.) IN these petitions, the contention advanced on behalf of the petitioner is that on a proper interpretation of the relevant provision of the Madras General Sales tax Act, the sales of foreign liquor stand exempted. That being so, the rate of tax on sales of foreign liquor is a "nil" rate. If under the General Sales-tax Act at certain specified rates, and not the rate of 50 per cent sought to be imposed by the department. In order to appreciate the contentions of the petitioner, it is necessary to refer to the provisions of the Madras General Sales-tax Act, the central Sales-tax Act and the Madras Prohibition Act.

(3.) INITIALLY, Mr. K. Srinivasan, learned counsel for the petitioner, referred to S. 8 of the Madras General Sales-tax act, which provides for exemption from tax. This section reads: