Judgment-

SEN, J.

( 1 ) THIS case along with a number of other cases was heard by S. P. Bharucha and Faizan Uddin, JJ. who passed the following order :-

during the course of the arguments, the judgment of a Bench of two learned Judges in State of Maharashtra, Bombay v. Britannia Biscuits Company Ltd. , 1995 Supp (2) SCC 72, has been cited. Our attention has also been drawn to the judgment of a Bench of three learned Judges in Punjab Distilling Industries Limited v. Commr. of Income-tax, Simla, 1959 Supp (1) SCR 683: (AIR 1959 SC 346 ). Having regard to these judgments, we think that these appeals require the consideration of a larger Bench. The larger Bench may also take note of the judgment dated 11/09/1996 in C. A. Nos. 11864-67 of 1996 (reported in 1996 AIR SCW 4126), Commr. of Income-tax, Madurai v. T. V. Sundaram Iyengar and Sons Ltd. "

( 2 ) THE United Breweries (hereinafter referred to as ub) supplies at Hyderabad two brands of beer - (1) U. B. Export Lager, and (2) Sun Lager. The dispute between UB and Andhra Pradesh Sales Tax Authority was as regards the crates and bottles in which the beer was supplied. The case of UB was that when beer was sold bottles and crates were not sold to the customers. The sale price of UB Export Lager was Rs. 43. 18 and Sun Lager Rs. 43. 75 per dozen. The supplies were made to selling agents who deposited security of Rs. 4. 80 for the bottles and Rs. 5. 00 for the crates. These deposits were returned to the selling agents when the bottles and the crates were returned. This was the method of carrying on of the trade by the assessee and two circular were issued by the assessee to explain the scheme to their customers. It was stated in the two circulars as to how payments for two brands of the beer were to be made. Additionally, it was stated that the "vendees to return bottles and crates and customers are assured of better supply, if the scheme is adhered by the customers; otherwise the company expressed difficulty in supplying the liquor. "

( 3 ) THE scheme was explained to the taxing authorities. The Commercial Tax Officer verified the scheme and held that the customers did not always return the bottles and crates. The sale of beer included sale of the crates and the bottles.

( 4 ) THE Commercial Tax Officer was also of the view that the bottles and crates were higher in value than the amounts deposited as security. For these two reasons, it was held that the scheme was not genuine. Therefore, the taxable turnover had to be computed not only by taking into account the sale price but also the value of the bottles.

( 5 ) THE case ultimately went up to the Tribunal. The Tribunal was of the view that there was no bailment of the bottles and the crates and there was no contractual obligation on the part of the customers to return the bottles and the crates. The scheme, therefore, was not acceptable as genuine.

( 6 ) THEREAFTER, the case was taken up by UB to the High Court. Before the High Court the contention of the Revenue was that the mere fact that bottles and crates in which beer was sold could be returned did not mean that the customers had not purchased the bottles and the crates and had not become owners thereof. The bottles and crates were also vended to the customers along with the beer. The High Court held that the ownership in the bottles and crates did not remain with the UB when beer was sold. The customers purchased the bottles and the crates with the contents of receptacles. When bottles and crates were returned to the extent shown by the assesse, in law, these was a resale of bottles and crates to the assessee. The High Court referred to the decision of this Court in the case of Punjab Distilling Industries Ltd. v. Commr. of Income-tax (A), (1959) 35 STC 519 : (AIR 1959 SC 346), and pointed out that UB did not have any right to the return of the bottles and crates nor was there any time-limit set for return of the bottles and crates. Therefore, it was a clear case where bottles and