UNITED DISTILLERS LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) This writ petition seeks to challenge the judgment and order, dated 28.12.1999 passed by the Commercial Taxes Tribunal, Bihar, Patna in Revision Case No. ME-380/93 by which it rejected the petitioner's application and upheld the order of the Assessment Officer passed for the assessment period 1983- 84.

(2.) The controversy in the case relates to a number of despatches of India Made Foreign Liquor (IMFL) by the petitioner. The despatches in dispute were made under 539 bills and the consignments were admittedly sent to different parties outside the State in whose respective names road permits were obtained in Form XXVIIIB under the Bihar Finance Act. According to the petitioner, the despatches to the different parties were made on the instructions of its buyer who issued in its favour the necessary declarations in Form 'C under Section 8(4) of the Central Sales Tax Act. The Assessment Officer, and later the Tribunal, rejected the petitioner's case that the sales of IMFL covered by the 539 bills were to someone other than those to whom the consignments were despatched as shown in the road permits in form XXVIIIB. Further, the Revenue took the much higher figures shown in the road permits (and not the lower figures stated in the 539 bills) as representing the true value of the liquor and subjected the higher amount of road permits to the levy of Central Sales Tax. Furthermore, the declarations in form 'C with regard to the despatches in question issued by the party whom the petitioner claimed to be its real buyer were held irrelevant and in the absence of the declarations in form 'C by the parties to whom the despatches were actually made, the sales were held to be in favour of unregistered dealers and were subjected to Central Sales Tax at the much higher rate of @ 25%, as applicable in this State.

(3.) The petitioner M/s United Distillers Ltd. is a company registered under the Companies Act. It is engaged in the manufacture and sale of IMFL and it has its manufactory at Mirganj in the district of Gopalganj. It is stated on behalf of the petitioner that there is another company called Herbertsons Ltd. It carries on the business of marketing IMFL under various brand names owned by it e.g Bagpiper Whiskey, Bagpiper Gold, Honey Bee Brandy, Bee Hive etc. Herbertsons Ltd. (HL) does not have any manufactory of its own. It gets IMFL manufactured by different manufacturers in the country under its brand names which are its registered trademarks and purchases the product from the manufacturers under agreements entered into for the purpose. On behalf of the petitioner, it is emphasised that the petitioner and HL are two independent, separate and distinct legal entities and even their respective Boards of Directors were never common and were always different. It is further stated that HL and the petitioner had entered into a written agreement in terms of which the petitioner would manufacture some of the HL brands of IMFL in Bihar. The manufactured liquor would be purchased by HL for the purpose of import into other States of the country. Some of the salient features of the agreement between the petitioner and HL are stated in the writ petition as follows: