Madhava Reddy, Ag. C.J.
1. Heard the learned Government Pleader. This petition is for the issue of a writ of certiorari or any other writ, direction or order to quash the proceedings of the Commercial Tax Officer, X Circle, Hyderabad, in G.I. No. 2955/82-82 dated 17th September, 1982.
2. The petitioner is a dealer carrying on business under the name and style of M/s. Vinayak Beer & Wine Stores, Himayatnagar, Hyderabad, and has obtained a licence under the Andhra Pradesh Indian Liquor (Storage in Bond) Rules, 1969, framed under the A.P. Excise Act, 1968. It is the case of the petitioner that under the contract for sale of goods with M/s. Hyderabad Beer and Wine Stores, the petitioner agreed to sell liquor on condition that the said Stores pays the excise duty to the excise authorities directly and produces the chalan. On the production of the chalan, the goods are to be released from the bonded warehouse in terms of the A.P. Indian Liquor (Storage in Bond) Rules, 1969. On the turnovers for the months of May, June and July, 1982, the petitioner-firm paid sales tax at 55.55 per cent of tax as detailed below :
May, 1982 Rs. 71,308.00 June, 1982 2,35,849.50 July, 1982 1,99,579.00 During this period M/s. Hyderabad Beer & Wine Stores which had purchased the goods from the petitioner-firm, paid the excise duty through chalans in the Government treasury as detailed hereunder : May, 1982 Rs. 2,51,991.00 June, 1982 5,24,191.50 July, 1982 5,38,916.00
3. This amount was not included in the turnover while filing the returns in form A-2 and paying the tax due for the aforesaid months. The Commercial Tax Officer, X Circle, Hyderabad, respondent herein, under the impugned proceedings found that it is true that M/s. Hyderabad Beer and Wine Stores, Hyderabad, had paid the excise duty for the goods purchased by it but objected to the non-inclusion of the amount of excise duty paid by it in the turnover of the petitioner-firm on the ground that by a notification in G.O. Ms. 145, Revenue, dated 14th August, 1981, the Government have amended sub-rule (a) of rule 76 and sub-rule (1) of rule 79 of the A.P. Distillery Rules, whereby the holder of D-2 licence is required to pay the excise duty. Rule 10 of the A.P. Indian Liquor (Storage in Bond) Rules, 1969, was amended under G.O. Ms. 194/E2/78-15 (Rev.) (E) dated 28th May, 1980. By the impugned order, the Commercial Tax Officer added the excise duty paid by the buyer for the purchase of liquor from the petitioner-firm in the taxable turnover and determined the tax payable by the petitioner-firm under item 26(b) of the First Schedule to the Andhra Pradesh General Sales Tax Act at 25 paise in the rupee and added the surcharge also payable thereon.
4. Mr. S. Krishna, learned counsel for the petitioner, relying upon the decision of the Supreme Court in McDowell & Co. v. Commercial Tax Officer : 1SCR914 which was a case arising from the State of Andhra Pradesh, contended that the excise duty payable for the removal of the liquor from the bonded warehouse was paid by the purchaser, in this case by M/s. Hyderabad Beer and Wine Stores, and not by the petitioner-firm. That amount having been paid directly by the buyer into the Government treasury never came to the tills of the petitioner-firm and as such it could not be included in the taxable turnover. The Supreme Court found in the aforesaid case relied upon by the learned counsel thus :
'In the instant cases, the excise and countervailing duties did not go into the common tills of the appellants and did not become a part of their circulating capital. We are, therefore, of the view that the sales tax authorities were not competent to include in the turnovers of the appellants the excise duty and the countervailing duty which was not charged by them but was charged by and paid directly to the excise authorities by the buyers of the liquors, as stated above.'
5. That decision considered the question when the A.P. Distillery Rules and the Indian Liquor (Storage in Bond) Rules were not amended. The case itself dealt with a turnover of the dealer relating to the assessment year 1971-72. Considering the rules then in force, the Supreme Court held :
'... The said rules particularly rules 79, 81, 82, 83 and 84 lend a good deal of support, in our opinion, to the contention of the counsel for the appellants and make every intending buyer of the Indian liquor liable for payment of the excise duty before obtaining the distillery pass and lifting the quantity mentioned therein from the distillery. Accordingly agreeing with the counsel for the appellants, we hold that intending purchasers of the Indian liquors who seek to obtain distillery passes are also legally responsible for payment of the excise duty which is collected from them by the authorities of the excise department.'
6. Their Lordships then went on to observe :
'... The real and pivotal question that requires to be determined is whether the excise duty or the countervailing duty, as the case may be, paid directly to the excise authorities of the State or deposited directly in the State exchequer in respect of the Indian liquor by the buyers thereof before removing it from any of the aforesaid distilleries or the warehouse can be said to form part of the table turnover of the appellants, as according to section 5 of the Act, which is the charging section, sales tax is required to be paid by the appellants on their turnover of the year ...'.
7. Having set out the position thus, the court proceeded to observe :
'Bearing in mind the principle set out in A. V. Fernandez's case : 1SCR837 the phrase 'any sums charged by the dealer' has to be understood in its ordinary popular sense. So construing the phrase, it means 'what is demanded and collected or received by the dealer'. In the instant cases, the excise duty or the countervailing duty has, as already stated, not been charged or received by the dealers but has been charged by the excise authorities and deposited directly by the buyers of the liquor in the State exchequer. It is, therefore, difficult to hold that excise duty or countervailing duty was charged by the appellants.'
8. This position, however, has been altered by the amendment of the A.P. Distillery Rules and the A.P. Indian Liquor (Storage in Bond) Rules. Rule 76(a) of the A.P. Distillery Rules as amended now, which is relevant for our present purpose, reads as follows :
'No spirit or liquor manufactured or stored shall be removed unless the excise duty specified in rule 6 has been paid by a holder of D-2 licence before such removal.'
9. Rule 79(1) of the Distillery Rules after its amendment, which is relevant for our present purpose, reads as follows :
'79. (1) On payment of the excise duty by the holder of D-2 licence a distillery pass for the removal of spirit fit for human consumption may be granted in favour of any of the following persons only, viz.
(a) a person holding a licence in the Andhra Pradesh or in other States for sale of spirit by wholesale of retail and when the spirit is to be transported or exported beyond the limits of the district in which the distillery is situated to a person holding a permit signed by the Excise Superintendent of the district of destination of an officer of that district authorised in this behalf.
(b) a person holding a permit signed by the officer of any other State referred to in clause (a) above for the export of such spirit from the State of Andhra Pradesh into that State.
(c) a person holding a permit signed by an officer duly authorised in that behalf for export of such spirit to an Union Territory.
(d) the licensee may act as an agent in removing spirit for any licensed vendor including any wholesale agency licensed in the name of a distiller who, to enable the licensee to obtain a distillery pass, furnishes him with a certificate showing that he is a licensed vendor.'
10. Rule 10 of the A.P. Indian Liquor (Storage in Bond) Rules, 1969, after the amendment dated 28th May, 1980, reads as follows :
'(1) No Indian liquor stored in the bonded warehouse shall be removed or transferred from the bonded warehouse to the licensee's wholesale shop except under permission granted in this behalf in form B.W. 3 and unless the duty levied under the provisions of the Act has been paid by the licensee.
(2) If the licensee wants to remove any quantity of Indian liquor from the bonded warehouse, he shall make an application in that behalf in form B.W. 3 to the Joint Collector through the officer-in-charge.'
11. It will be clear from the aforesaid provisions that the liquor stored in bonded warehouse can be removed only by the licensee, in this case only by the petitioner-firm and no one else. Previously, the buyer of the liquor also could pay the amount having secured the right to the said liquor by purchasing the same from licensees like the petitioner. Now that option is not open to the buyer and the licensee. It is only the licensee, i.e., the petitioner, that is required to sign the chalan and pay the amount. In fact the amount of excise duty is paid for and on behalf of the petitioner-firm which is the licensee. Of course it is the case of the petitioner that it did not in fact pay the amount of duty but the buyer had filled up the chalan and signed for and on behalf of the petitioner-firm and deposited the excise duty. The amount was never collected by the petitioner and deposited into the Government treasury under the chalan. That, however, in our opinion, does not make any difference. In the eyes of law it is the petitioner that will be deemed to have deposited the amount. It may have collected the amount from the prospective buyer or raised a loan or paid it from its own funds. In view of the amended rules referred to above, the amount of excise duty deposited for the liquor sold by the petitioner-firm to the buyer, in this case M/s. Hyderabad Beer and Wine Stores, would be deemed to have been deposited by the petitioner-firm. The amount collected by it towards the sale of liquor to the said Stores would be the sale price and that would include the duty so deposited as well. Since the amount was paid for and on behalf of the petitioner-firm, the petitioner-firm would have given credit for that. By omitting to reflect the true nature of the transaction in the account books, the petitioner-licensee cannot contend that it has not in fact paid the excise duty and that it has not recovered any amount towards excise duty from the buyer of his goods. The true nature of the transaction, in the eyes of law, is that the petitioner-licensee has paid the excise duty and collected it from the purchaser by way of adjustment. The entire amount of excise duty thus constitutes part of the price received by him for the sale of liquor and must be included in the turnover of the petitioner-firm and that would, therefore, be the basis for assessing the sales tax due under item 26 of the First Schedule to the A.P. General Sales Tax Act. In view of the amended state of law, the amount of excise duty paid into the Government treasury for and on behalf of the petitioner-firm. In our view, the principle laid down in the aforesaid decision of the Supreme Court that the amount should have gone into the common till of the dealer is also satisfied inasmuch as, in the eyes of law, the amount of excise duty would be deemed to have been actually deposited by the petitioner, which is the dealer in this case, and therefore that amount also has to be taken into account in determining the taxable turnover.
12. It was next contended by Mr. Krishna, learned counsel for the petitioner, that in fact the bills do not show that the petitioner, has collected the amount of excise duty from the buyer of the goods and as such sales tax is liable to be paid under item 26(a) and not under item 26(b) of the First Schedule. If, on a true appraisal of the nature of the transaction, the petitioner is found to have paid the excise duty and it forms the taxable turnover, then undoubtedly item 26(b) applies to the facts of this case and not item 26(a). We have already held above that the excise duty is part of the consideration from the sale of the liquor in favour of M/s. Hyderabad Beer and Wine Stores by the petitioner and therefore the taxable turnover must include the excise duty component even though it may not have been shown as such in the bills and the accounts of the petitioner. In that view of the matter this contention also fails.
13. In the result, we do not find any merits in the writ petition and it is accordingly dismissed. No costs. Advocate's fee Rs. 150.
14. The learned counsel for the petitioner makes an oral request for grant of leave to appeal to the Supreme Court. We are unable to certify that this case involves such a substantial question of law of general importance as requires consideration by the Supreme Court or that it is otherwise a fit case for grant of leave. Leave refused.