SCI INDIA LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) In the instant writ petition, the Petitioner seeks quashing the demand notice dated 14.1.1993 issued by the Assistant Commissioner, Commercial Taxes, Bhagalpur. Before we take up the issue in question, it is necessary to notice the facts in some detail.

(2.) The Petitioner is a manufacturing unit of rectified spirit. It supplied rectified spirit to the bonded Warehouse maintained by the State Government; through the Excise Department. The charge of Commercial Taxes Department is that the Appellant had not paid its sales tax liability for some periods both prior and subsequent to 1.4.1989. The stand of the Petitioner is that it could not pay the sales tax due, as the same was not paid to it by the purchaser, the Department of Excise, Govt. of Bihar. The Sales Tax Department began to pressurize the Petitioner to make payment of the sales tax liability. This forced Petitioner to stop further supply of the rectified spirit. The Excise Department, Government of Bihar too persuaded the Petitioner unit to continue the supply of rectified spirit. A copy of telegram from Excise Department in this respect is annexed as Annexure-1 to the writ application. On account of mounting pressure and assurance of the Excise Department that it would sort out the sales tax matter with the Commercial Tax Department, the Petitioner began to make supply of the rectified spirit.

(3.) On 14.3.1988, the Commissioner of Excise vide his letter No. 1048 wrote to the Commissioner of Commercial Taxes drawing his attention to the earlier discussions wherein it was emphasized that manufacturer of country liquor was not liable to pay sales tax as it was making sale to Government warehouse through the Excise Department. A copy of the letter dated 14.3.1988 is annexed as Annexure-2 to the writ petition. While the disputes between the two departments namely the Department of Excise and the Department of Sales Tax was pending before the Government, the Commissioner of Commercial Taxes, Bihar vide his memo No. 492 dated 22.1.1990 directed all the sales tax authorities to recover sales tax from the manufacturer of country liquor spirit w.e.f. 1.4.1989, and for the period prior to 1.4.1989 the matter was to be decided between the authorities of sales tax. A copy of memo No. 492 dated 22.1.1990 is annexed as Annexure-3 to the writ petition. Pursuant to the letter of the Com missioner of Commercial Taxes dated 22.1.1990, the Sales Tax Department be gun to pressurize the Petitioner for payment of sales tax. The Petitioner time and again represented both before the Excise Department and the Commercial Taxes Department. A copy of the representation dated 17.12.1992 made to the Excise Com missioner is annexed as Annexure-4 to the writ petition. The Excise Department even wrote to the Government for allocation of finance to meet the requirement of sales tax payment. The Petitioner com plains that notwithstanding the aforesaid aspects, the Assistant Commissioner, Commercial Taxes vide demand notice dated 14.1.1993 called upon it to pay the sales tax liability of Rs. 9,24,852.72 paise, besides penalty of Rs. 1,76,399 for the delayed payment.