The excise duty paid by the buyer was part of the petitioner's taxable turnover because the amended A. P. Distillery Rules and A. P. Indian Liquor (Storage in Bond) Rules required the licensee (the petitioner) to pay the excise duty before removing the liquor from the bonded warehouse, and the petitioner had collected the amount of excise duty from the buyer by way of adjustment.

( 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 17/09/1982.

( 2 ) THE petitioner is a dealer carrying on business under the name and style of M/s. Vinayak Beer and 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 and 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 1 4/08/1981, 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 28/05/1980. 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 and Co. v. Commercial Tax Officer [1977] 39 STC 151 (SC); A. I. R. 1977 SC 1459 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. Dis