The present Value Added Tax Appeal stands dismissed by HIGH COURT OF MADHYA PRADESH AT INDORE in the case of M/S GREAT GALLEON VENTURES LIMITED V. DEPUTY COMMISSIONER OF COMMERCIAL TAX through HON’BLE JUSTICE VIVEK RUSIA
FACTS OF THE CASE
The facts of the case are that the appellant is a company registered under the provisions of the Companies Act, 1956 and is engaged in the business of potable alcohol / alcoholic liquor under the licenses issued by the Government of Madhya Pradesh under the M.P. Excise Act, 1915. During the period from 01.04.2013 to 31.03.2014, the appellant purchased potable spirit to manufacture the liquor. Prior to 01.04.2013, the spirit was exempted along with liquor from entry tax under Entry No.2 of Schedule – I of the exemption list of the Entry Tax Act. According to the appellant, prior to 01.04.2013, the spirit was also under the category of goods falling under Schedule – I of the Value Added Tax Act and also under Entry No.47 of Schedule – I of the VAT Act. After 01.04.2013, Entry 47 of Schedule – I of the VAT Act has been separated into two entries i.e., Entry 47 of Schedule – I & II and Entry 6 of Part – III-A of Schedule – II, therefore, despite the aforesaid amendment, the spirit being a liquor continued to be exempted from the entry tax as it is covered under the M.P. Excise Act. In the year 2009 – 10, the respondents have rejected the spirit to be classified under Entry 47 of Schedule – I of the VAT Act and started classifying the spirit under the residual entry of the VAT Act. Number of writ petitions were filed challenging the aforesaid action of the State viz. and vide order dated 26.08.2016, all the writ petitions were allowed, and assessment orders were quashed.
In the present case, Section 2(17) defines ‘spirit’ it means any liquor containing alcohol obtained by distillation whether it is denatured or not. The word denatured is also defined in the Act and as per Section 2(5) “denatured” means rendered unfit for human consumption in such a manner as may be prescribed by the Government on this behalf. The word ‘Liquor” as defined in Section 2(13) also includes spirit. Under the RECTIFIED SPIRIT RULES framed by the State Government “Rectified Spirit” means plain un-denatured spirit of strength of 66 degrees or more over proof and includes Extra Natural Alcohol and Absolute Alcohol as defined in I(a) of the Rules. As per Rule III no person or institution shall possess or transport “Rectified Spirit” under the permit granted by the District Excise Officer / Assistant Excise Officer in Form R S 2. Hence, in view of the above definitions and rules, the “Rectified Spirit” is a separate class of commodity in the M.P. Excise Act for which a separate license is required to be possessed. The appellant has not filed the copy of licenses issued to them by the competent authority for the sale of liquor or “Rectified Spirit”. As per exemption granted by the Government, the dealer who sells the liquor other than a dealer who holds license under the Madhya Pradesh Excise Act, 1915. The issue is no res integra. The rectified spirit’s manufacture and sale by the present appellant is not a liquor to claim an exemption under Entry 47 of Schedule – I or Entry 6 Part – III-A of Schedule – II of the VAT Act. The MPCTAB has also held that in common parlance meaning of Indian Made Foreign Liquor means the liquor which is being sold from the shop has a license for human consumption which does not include the rectified spirit, therefore, it is not exempted from Entry 47 of Schedule – I or Entry 6 Part – III-A of Schedule – II of the VAT Act. Accordingly, the present Value Added Tax Appeal stands dismissed. The order passed in the present appeal shall govern the connected appeal also, therefore, the connected appeal i.e., Value Added Tax Appeal No.5/2022 also stands dismissed.
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JUDGEMENT REVIEWED BY SHREYA NIDHI