MYSORE BREWERIES LIMITED Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) COMMON questions of law arise in these tax revision cases filed by the same assessee. We heard counsel on both sides on these questions and are therefore, dealing with them in this common judgment. M/s. Mysore Breweries Ltd. , manufactures and sells beer and other alcoholic beverages. The question which arises for consideration is as to whether there is separate sale of the bottles in which the beverages are sold, and if so, what is the rate of tax applicable to such sales.

(2.) T . R. C. No. 105 of 1988 arises out of T. A. No. 99/86 which was disposed of by the Sales Tax Appellate Tribunal by order dated May 21, 1987, in respect of the assessment year 1982-83. The assessee had returned a net turnover of Rs. 2,18,74,707. The assessing authority determined the taxable turnover as Rs. 2,71,59,820. The assessee had claimed that the sale was only of the beverages, the bottles in which they were filled having been handed over to the customer only as a bailee to be returned after consumption of the liquor. It was also the case of the assessee that no sale of bottles was involved; and as such, the amounts accepted from the customers as deposit to secure return of the bottles could not form part of the turnover. The other submission was regarding value of packing materials like, cardboard boxes, cartons, labels, etc. , in which the bottled liquor was packed. According to the assessee, the turnover involved in packing charges was not liable to be taxed; and if at all, it shall not be taxed at higher rate applicable to the beverages. The assessing authority rejected all these contentions and included the sale price of beer covered by sale bills, bottle deposits covered by debit note and price of packing charges as turnover in respect of beer. That turnover was assessed to tax at 10. 5 per cent with surcharge at 10 per cent in addition. The assessee filed an appeal before the Deputy Commissioner (Appeals) urging that there was no sale of bottles or packing materials and in any case, bottles and packing materials being general goods taxable at a lower rate, the turnover involved in those two items should not be assessed at higher rate of 10. 5 per cent applicable to beer.

(3.) EVEN though most of the above decisions had referred to the agreements for ascertaining whether there was separate sale of the beverages, bottles and packing materials, the assessee seems to have avoided production of the agreements before the Deputy Commissioner (Appeals ). By his order dated February 27, 1985, the Deputy Commissioner (Appeals) dismissed the appeal rejecting the contention that the bottle deposits could not form part of the turnover. He, however, allowed the appeal in so far as it related to rate of tax levied on the turnover relating to bottle deposits and packing materials. The assessee filed T. A. No. 99/86 before the Sales Tax Appellate Tribunal, which, by its order dated May 21, 1987, dismissed the same in view of its finding in T. A. No. 221/86. It also held that in view of its judgment in T. A. No. 169/86, the turnover in respect of bottles and packing materials was exigible to tax at the rate applicable to the contents. The assessee has filed T. R. C. No. 105 of 1988 and has raised the following questions :