STANDARD DRUGS CO Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THESE are two references (Civil References Nos. 17 and 20 of 1955) made by the Financial commissioner, under Section 22 of the East Punjab General Sales Tax Act of 1948. The assessee in each case is Messrs Standard Drugs Company, Amritsar. Civil Reference No. 17 relates to the assessment for the years 1949-50 and 1950-51, whereas Civil Reference No. 20 relates to the assessment for the year 1951-52.

(2.) THE facts briefly are that the assessee-company manufacture drugs and toilet preparations which have an alcoholic content. For the years 1949-50 and 1950-51 the assessing authority allowed an exemption in respect of these drugs from the sales tax, holding that they fell under item 37 of the Schedule. For the year 1951-52 the assessing authority refused to grant any exemption. The matter was taken up in appeal by the assessee with regard to the third assessment in respect of the year 1951-52, and the Excise Department filed two revision petitions against the orders in respect of the first two years in respect of which exemption had been allowed by the assessing authority. The appeal of the assessee was dismissed and a revision petition was also filed by them. The matter ultimately came up before the Excise and Taxation Commissioner, and he took the view that the assessee was not entitled to any exemption as item 37 did not cover their case. On a representation made by the assessee, the Financial Commissioner has referred the matter for the opinion of this Court, and in the referring order two questions are stated. The first of these is no longer before us. It related to the question of limitation with regard to the filing of revision petitions, and the learned counsel for the assessee has chosen not to press it. The second question, which is the only matter now before us, is stated as follows :-Whether sales tax can be levied on spirituous preparations when excise duty is also being levied on them under the Punjab Excise Act?

(3.) THE question is not perhaps happily worded inasmuch as excise duty can no longer be levied on medicinal or toilet preparations containing alcohol under the Punjab Excise Act as such, after the coming into force of the Constitution, but the point which requires our consideration is quite clear as I shall presently show.