UNITED BREWERIES LIMITED Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) M/s. United Breweries Limited is a manufacturer of beer at Bangalore. The company commenced supplying beer in two brands at Hyderabad from 18/10/1971. The name of the two brands are : "U.B. Export Lager", "Sun Lager". For the business they have done in the State of Andhra Pradesh (covering sale of beer), they were assessed under the Andhra Pradesh General Sales Tax Act (6 of 1957). Before the taxing authorities the company asserted to have sold U.B. Export Lager at Rs. 43.18 and Sun Lager at Rs. 43.75 per dozen of bottles and crates. The company asserted when beer was sold, bottles and crates were not sold to their customers. Ownership in the bottles and crates remained with them. Further the agents kept security of Rs. 4.80 per dozen bottles and Rs. 5 for crates. These deposits were returned to customers when bottles and crates were returned. This methodology of vending, the company represented, to be their scheme of sales and offered two circulars of the company to explain the scheme.

(2.) The two circulars recite for the two brands of beer are to be booked and cheques are to be issued in the name of Phipson & Co. Ltd., Himayatnagar. Cheques for U.B. Export Lager, however, are to be issued in favour of United Breweries Ltd. The circulars further recite vendees to return bottles and crates and customers are assured of better supply, if the scheme is adhered by the customers; otherwise the company expressed difficulty in supplying the liquor.

(3.) The scheme was explained to the taxing authorities. The Commercial Tax Officer verified the scheme and held the customers did not return bottles and crates. There was no truth in the scheme, as it was never implemented. On appeal, the Commercial Tax Officer recorded the ledgers of the company were not produced for verification. Further bottles and crates were higher in value than the amounts deposited as security. For the two reasons the scheme was not true. Aggrieved the company-assessee approached and the Sales Tax Appellate Tribunal verified the records. The Tribunal held there was no bailment of bottles and crates and no contractual obligation on the part of the customer to return bottles and crates. The scheme therefore, was not accepted (as) true. Hence the three revision cases for the respective years.