United Spirits Limited Vs State of Maharashtra (Bombay High Court)
Summary: The Bombay High Court allowed Writ Petition (Lodging) No. 10092 of 2020 filed by M/s. United Spirits Limited and quashed the impugned assessment order dated 31 March 2020 to the extent challenged. The dispute arose from the financial year 2015-16 and principally concerned taxation of sales of liquor made by the petitioner from its customs bonded warehouse to M/s. ASK Agencies & Investments Private Limited, as well as a separate issue concerning sales to Damania Enterprises in Daman. The Court held that the assessment, insofar as it imposed a fresh levy on the same transaction after tax had already been paid at the first point of sale by ASK Agencies, was unsustainable. The Court also rejected the Revenue’s objection based on availability of an alternate remedy because the assessment order was found to be in excess of jurisdiction.
The petitioner had imported goods and effected bond-to-bond sales to ASK Agencies. According to the petitioner, under the legal position prevailing during the relevant period, the bond-to-bond sales were treated as sales in the course of import and no VAT/CST was discharged by the petitioner at that stage. ASK Agencies subsequently sold the goods and paid MVAT at the applicable rate treating those sales as the first point of sale. The record contained a Chartered Accountant’s certificate, an undertaking by ASK Agencies and its VAT returns supporting the payment. ASK Agencies also confirmed that the tax it had paid should be treated as discharge of any tax liability of United Spirits Limited on the subject products. The Court recorded that the tax deposited by ASK Agencies and its return had been accepted by the State authorities.
