Judgment

S.P. Bharucha, J.-There are appeals against the judgments and orders of Division Benches of the High Court at Madras in tax revision cases that involve the same issue, namely, whether the excise duty on pota­ble liquor manufactured by the appellants, paid by the purchasers thereof, is includible in the taxable turnover of the appellants for the purpose of levy of tax under the Tamil Nadu General Sales Tax Act.

2. The appellants manufacture Indian Made Foreign Liquor (IMFL) on the strength of licences issued to them under the pro­visions of the Tamil Nadu Indian Made Foreign Spirits (Manufacture) Rules, 1981. The manu­­facture, supply and sale of the IMFL is governed by the Tamil Nadu prohibition Act, 1937 (now referred to as ‘the Act’), the Tamil Nadu Indian-made Foreign Spirits (supply by wholesale) Rules, 1981, and the Tamil Nadu Indian Made Foreign Spirit (Manufacture) Rules, 1981 (now referred to as the ‘Wholesale Rules’ and the ‘Manu­facture Rules’ respectively).

3. By reason of Section 17-C of the Act, (introduced by an amendment in 1983), the Tamil Nadu State Marketing Corporation Limited, a corpora­tion wholly owned and controlled by the Government of State of Tamil N