- (1.) THESE three writ petitions are directed against the order dated July 27, 1998 passed by the Rajasthan Taxation Tribunal, Jodhpur, (for short 'the Tribunal') whereby the Tribunal has allowed the revisions filed by the Revenue and set aside the orders of the Rajasthan Tax Board allowing the appeals filed by the petitioners pertaining to the assessment years 1989 -90, 1990 -91 and 1991 -92 by a common order.
(2.) THE facts giving rise to these writ petitions are : that the petitioner -company is a manufacturer of Indian Made Foreign Liquor (IMFL) and beer, etc., and is a dealer registered under the provisions of the Rajasthan Sales Tax Act, 1954. By Notification No. F.4(59) FD Gr. IV/80 -23 dated March 23, 1987, the State Government in exercise of its powers conferred under Section 4(2) of the Rajasthan Sales Tax Act, 1954 (for short, 'the Act'), exempted from tax with effect from April 1, 1987 the sale and purchase of beer and IMFL as declared for the purposes of the Rajasthan Excise Act, 1950. For the assessment years in question, the assessing officer held that though the sale of beer and IMFL are exempted from tax under Section 4 of the Act hut as they are being sold contained in bottles, tax is leviable on the sale of bottles as packing material at 5 per cent. The turnover of the bottles, as sale of packing material which was taken to be 1 per cent of the aggregate of the amount of the sale price received by the dealer in view of the first proviso to the definition of 'taxable turnover' as given in Sub -section (s) of Section 2 of the Act. The assessing officer levied tax keeping in view last proviso to Sub -section (1) of Section 5 of the Act and also levied interest and penalty under Sections 11B and 16(1)(n) of the Act respectively as under : Year Tax Interest Penalty Total 1989 -90 5,21,887 43,838 200 96,225 1990 -91 33,969 36,566 200 60,735 1991 -92 60,452 37,639 500 98,591 Against these assessment orders, the dealer -petitioner preferred appeals before the Deputy Commissioner (Appeals), Udaipur who vide his order dated November 18, 1995 dismissed those appeals. Thereafter, second appeals were preferred before the Rajasthan Tax Board, Ajmer, and the Rajasthan Tax Board vide its order dated July 3, 1997 allowed the appeals filed by the dealer -petitioner and set aside the tax, interest and penalty imposed by the assessing officer and affirmed by the Deputy Commissioner (Appeals). Thereafter, the Revenue preferred revisions in each case before the Rajasthan Taxation Tribunal. The Rajasthan Taxation Tribunal vide its judgment dated July 27, 1998 allowed the revisions filed by the Revenue and set aside the orders dated July 3, 1997 passed by the Rajasthan Tax Board in each case.
(3.) BEFORE the Rajasthan Taxation Tribunal, two -fold contentions were raised on behalf of the dealer -petitioner. It was contended that bottling of liquor is an essential process of bringing the goods in marketable condition and, therefore, bottle cannot be considered to be a packing material but is an integral component of the commodity sold, viz., liquor and therefore, the question of selling the commodity contained in packing material does not arise and sale of bottled liquor does not attract the application of the last proviso to Section 5(1) of the Act. Since the commodity itself was exempt from tax, it was the commodity in marketable condition that is exempt and not the commodity at a stage prior to which it comes into the condition of marketability. The liquor or liquid without being placed in proper container does not become marketable at all. In other words, the contention was that the commodity which has been offered for sale by the dealer -petitioner was bottled liquor and not the liquor in bottle.;