R.S. Narula, J.
1. The assessment of sales tax under the Punjab General Sales Tax Act (46 of 1948) (hereinafter called the Sales Tax Act) on the sale of Indian-made foreign liquors known as beer, wine and rum during the assessment year 1966-67, by the petitioner-company at its hotel known as Oberoi's Mountview Hotel, Chandigarh, under the order of the Assessing Authority, Chandigarh, dated 18th September, 1971 (annexure A), has been called in question by the petitioner-company who is running the said hotel on the following two grounds :
(i) Since the relevant entry (entry 37) in Schedule B to the Sales Tax Act exempts all goods on which duty is or may be levied under the Punjab Excise Act, 1914 (hereinafter referred to as the Excise Act), the exception carved out of the field covered by the said exemption, namely, 'Indian-made foreign liquor' on which duty is or may be leviable not having been mentioned in column 2 but in column 1 of Schedule B, no liability to pay sales tax in connection with the sale of such liquor has been lawfully imposed in view of the provision of Section 6 of the Sales Tax Act; and
(ii) beer is not 'Indian-made foreign liquor' within the meaning of that expression used in entry 37 of Schedule B to the Sales Tax Act as amended with effect from 1st October, 1966.
2. Section 4 of the Sales Tax Act (which is the charging section) provides that every dealer (subject to certain exceptions which are not relevant for us) whose gross turnover in a year exceeds the taxable quantum, shall be liable to pay tax on all sales effected by him. The petitioner admittedly falls within the definition of 'dealer' as contained in Section 2(d) of the said Act. Sub-section (1) of Section 6 is in the following terms :
No tax shall be payable on the sale of goods specified in the first column of Schedule B subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column thereof and no dealer shall charge sales tax on the sale of goods which are declared tax-free from time to time under this section.
3. Entry 37 in Schedule B as it existed at the time of the enactment of the Sales Tax Act in 1948, and the changes which it underwent by its subsequent amendment with effect from 1st October, 1966, and a still later amendment dated 10th January, 1968, is quoted below :
'SCHEDULE B------------------------------------------------------------------------------------Entry number Column 1 Column 2------------------------------------------------------------------------------------37.(as the entry existed from 1948 All goods on which duty is or may Blank till 30th September, 1966, be levied under the Punjab ExciseAct, 1914, or the Opium Act, 1878.37.(as amended by Punjab Govern- All goods except Indian-made Blank.' ment Notification No. SO-213- foreign liquor on which duty is or P. A. 46/48/S. 6/66 dated 30th may be levied under the Punjab September, 1966, with effect Excise Act, 1914, or the Opium from 1st October, 1966). Act, 1878.37.(as amended by the Chandigarh All goods except foreign liquor as Administration Notification defined in sub-paragraph (2) ofNo. 8864-UTF 11(6)67/779 paragraph 2 of the Punjab Excisedated 10th January, 1968). Liquor Definitions, 1954, on whichduty is or may be levied under the Punjab Excise Act, 1914, or the Opium Act, 1878.
4. The effect of 'all goods dutiable under the Excise Act or the Opium Act' having been mentioned in column 1 of entry 37 of Schedule B of the Sales Tax Act from 1948, till 30th September, 1966, was that no sales tax was either leviable or assessable on sale of any kind of liquor, beer, brandy, wines, etc., as all those commodities were subject to excise duty under the Punjab Excise Act. As a result of the reduction of field of exemption originally contained in column 1 of entry 37 by the notification of September, 1966, only such liquors dutiable under the Excise Act remained exempted from payment of sales tax which did not fall in the category of 'Indian-made foreign liquor'. It is the exception carved out of the exemption in entry 37 of Schedule B with effect from 1st October, 1966, which was the basis of the impugned assessment of sales tax by the Assessing Authority against the petitioner in respect of the period commencing from 1st April, 1966, and terminating on 31st March, 1967. It appears from the order of the Assessing Authority (annexure A) that only the second out of the two arguments which have not been advanced before me was pressed by the petitioner's representative before the Assessing Authority. That objection was disposed of in paragraph 9 of the impugned order in the following words :
The counsel contended that beer, wine and rum are not covered by the definition of Indian-made foreign liquor. I am not inclined to accept this contention for the reasons stated hereinafter. All these beer, wine, rum and brandy serve the same purpose, i.e., intoxication. Their process of manufacturing is almost the same with slight variation. They all contain alcohol in varying quantities.
5. The only distinguishing feature in all of them is that the quantity of alcohol and degree differ. All these reasons show that 'beer, wine, rum and brandy, etc. are definitely Indian-made foreign liquor especially when the fact is that the term 'Indian-made foreign liquor' is not defined in the Act and is to be construed as understood in common parlance. There is no other information on the file.
6. The first point relating to the scope, interpretation and legality of the exception contained in the exemption mentioned in entry 37 does not appear to have been specifically argued before the Assessing Authority as the same has not been dealt with anywhere in its order. Since, however, the matter has been raised and argued at length and is likely to arise in other cases also, I have considered it advisable to deal with the same. The submission of Mr. R. N. Narula, the learned counsel for the petitioner, is that if out of the exemption entry mentioned in column 1, anything is sought to be except-ed, the object to do so can be achieved only by mentioning the name and particulars of the article (which is sought to be brought back to tax) in the second column of Schedule B as Section 6 of the Sales Tax Act specifically provides that no tax shall be leviable on the sale of goods specified in the first column, and that in order to create liability for payment of tax on the articles excepted out of the exemption, the only lawfully permissible course is to name the article in question in column 2 of the relevant entry. To be more precise, the submission of the learned counsel is that in order to achieve the object which the Government claims to have achieved by making the relevant change in entry 37 in 1966, the entry should have been recast as below :
------------------------------------------------------------------------------------'Entry number Column 1 Column 2------------------------------------------------------------------------------------37. The goods on which duty is Indian -madeor may be leviable under the foreignPunjab Excise Act, 1974, or the Opium liquor.'Act, 1878.------------------------------------------------------------------------------------
7. According to Mr. Narula, this is the only way permitted by Section 6 of the Sales Tax Act to make some of the articles exempted from payment of sales tax liable to the incidence of the tax by excepting the same from the category defined in column 1. The basis of this argument is that once it is declared under Section 6 that no tax shall be payable on the sale of certain goods which have been specified in the first column of Schedule B, no exception can be carved out of that exemption except in the manner provided by Sub-section (1) of Section 6 itself, that is, by specifying 'the exceptions', if any, in the second column of the corresponding entry. Admittedly, the second column of entry 37 has remained blank throughout.
8. Mr. Anand Swarup, the learned senior counsel for the assessing authority, has submitted in reply to this argument of Mr. Narula that 'conditions and exceptions', which are to be provided for in column 2 of Schedule B and to which reference has been made in Section 6 of the Punjab General Sales Tax Act relate to the conditions and exceptions in the transactions of sales of the goods described in column 1 and not to any goods which are not covered by the relevant entry in column 1. After hearing the learned counsel for the parties and carefully considering the matter, I am of the opinion that the submission of Mr. Narula is wholly misconceived and the interpretation placed by Mr. Anand Swarup on the expression 'conditions and exceptions' used in Section 6(1) of the Act is the correct one. The object of making this provision in Section 6 is that despite exemption of a commodity from levy of sales tax by including it in column 1 of Schedule B, the sale of the same commodity may nevertheless be made liable to the incidence of the tax under that Act in certain circumstances which may be detailed, in column 2. All the same, the article exempted under column 1 arid the article made subject to the incidence of the tax by being mentioned in column 2 is expected to be the same and the incidence of the tax on the exempted article would be attracted only if the exceptions or conditions specified in column 2 relating to the sale of that article are fulfilled in a given case. This becomes still clearer from a reference to the various entries in Schedule B against which conditions and exceptions have actually been mentioned in column 2. 'Vegetables' are mentioned in column 1 of entry 16. The exception carved out in column 2 of that entry is 'except when sold in tins, bottles or cartons'. The effect of reading both the columns of entry 16 together is that no tax is leviable on sale of vegetables except when the condition which has been attached in column 2 is fulfilled, the operation of which condition will bring back the exempted vegetables to the incidence of tax, that is, if and when the vegetables are sold in tins, bottles or cartons. The thing sold remains the same and only the condition or manner of sale or the packing in which it is sold is different. Entry 18 relating to meat, fish and eggs falls in the same line, as it is mentioned in column 2 thereof that the sale of meat, fish and eggs will be subject to sales tax when sold in tins, bottles or cartons. In the first column of entry 17 is mentioned 'milk'. The conditional case in which sale of milk is subjected to incidence of sales tax (despite the exemption) is described in column 2 against that entry as 'except condensed and dried milk'. Once again the article sold is milk in both the cases. Though it does not appear to be necessary to multiply instances of this type, reference can also be made to entry 20 (common salt -except when sold in sealed containers) or entry 33 (photographs including X-ray photographs-except when sold by photographers or radiologists preparing them). Nothing contained in Section 6 or in any other provision of the Act prohibits the State Government from not including all the different species of the commodity mentioned in column 1 of any entry in that column of Schedule B. For example, while mentioning all varieties of cotton, woollen or silken textiles, etc., in the first column of entry 30, it has been stated in the same column 'but not including pure silk fabrics, carpets, druggets, woollen durries and cotton floor durries'. Reducing the field covered by an entry of exemption by excluding therefrom certain things which might otherwise have fallen within the description of the exempted article does not, in my opinion, amount to laying down 'conditions and exceptions' for levy of sales 'tax on the same product which is sought to be exempted by inclusion in column 1 of Schedule B. The first argument of Mr. Narula, therefore, fails.
9. Nor is there any force in the second and only other submission made by Mr. Narula. (He expressly gave up all other grounds of attack against the impugned order which have been mentioned in the writ petition.) The second question is whether beer is or is not an 'Indian-made foreign liquor' for the purposes of entry 37 in Schedule B as it existed during the assessment year 1966-67. Section 3(14) of the Punjab Excise Act states that 'liquor' means 'intoxicating liquor, and includes all liquid consisting of or containing alcohol; also any substance which the State Government may by notification declare to be liquor for the purposes of this Act'. It is not disputed that beer is a liquid and does contain some alcohol. Beer, therefore, undisputably falls within the statutory definition of liquor. Nor is there any dispute about the fact that the beer on which the tax has been assessed in the impugned order is Indian-made. What is contended is that beer manufactured in India cannot be called a foreign liquor. In sub-paragraph (2) of paragraph 2 of the Punjab Liquor Definitions, 1954, foreign liquor has been defined to mean ;
(a) all liquor imported by sea into India...;
(b) all liquor manufactured in India (other than rectified spirit, denatured spirit and perfumed spirit) on which duty at a rate higher than that levied on country liquor is leviable ; and
(c) all beer (including ale, porter, stout and all other fermented liquors made from malt) manufactured in India or abroad.
10. The statutory definition of 'foreign liquor' quoted above clearly shows that all beer manufactured in India is also called 'foreign liquor' for excise purpose. 'Indian-made foreign liquor' is not defined as such anywhere. I hold that the amendment in entry 37 has been made by the Chandigarh Administration in January, 1968, merely by way of clarification and not with a view to make any change in the entry which existed since 1st October, 1966.
11. It has next been contended by the learned counsel for the petitioner that even after the said clarification, beer does not fall in the exception to the exemption as it would become foreign liquor only if it is fermented and coloured. Till then it is country liquor. It being fermented and coloured, submits Mr. Narula, 'country-made beer' would become 'Indian-made foreign liquor'. Strength for this argument is sought to be drawn by the learned counsel from the observations of the Division Bench of the Mysore High Court in B. P. Krishnamurthy v. State of Mysore [1962] 13 S.T.C. 436. Out of the two arguments that were advanced by the assessee before the Mysore High Court, we are concerned only with the second one relating to the allegation of excessive taxation. The goods made subject to the incidence of tax under the Mysore Act were described in column 2 of the schedule to that Act. The entries relevant for the decision of that case were serial numbers 38 and 39 in the schedule to the Mysore Act. Those were in the following terms:
'SECOND SCHEDULEGoods on the sale of which a single point tax is leviable on the first orearliest of successive dealers in the State under Section 5(3)(a).------------------------------------------------------------------------------------Serial Description of the goods Rate of tax No.(1) (2) (3)------------------------------------------------------------------------------------* * *38. All liquor including beer other than country liquor. Twenty-five per cent.39. Country liquor other than toddy. Three per cent. * * *------------------------------------------------------------------------------------
12. It was not disputed before the Mysore High Court that the assessee had sold during the relevant period beer manufactured in India which undoubtedly fell within the scope of entries 38 and 39 read together. His sole contention was that Indian-made beer was country-made liquor within the meaning of entry 39, which had been expressly excluded from the operation of entry 38 and, therefore, he was liable to pay tax on sale of beer at three per cent under entry 39 and not at twenty-five per cent under entry 38. The learned Judges of the Mysore High Court acceded to the submission of the assessee before them and held that 'Indian-made beer' fell within the description of 'coutry-made liquor' in entries 38 and 39 and was, therefore, taxable under entry 39 only. But this was because of the special statutory definition of 'country liquor' in explanation II appearing underneath the Second Schedule to the Mysore Act. The relevant explanation was in the following terms :
'Country liquor' in items 38 and 39 means liquor manufactured in India, other than liquor manufactured and compounded in India and coloured and flavoured to resemble gin, brandy, whisky or rum imported from outside the territory of India.
13. It is plain from a reading of the above-quoted explanation in the Mysore Act that in the absence of such an explanation occurring in the Sales Tax Act with which we are concerned the ratio of the judgment of the Mysore High Court in Krishnamurthy's case [1962] 13 S.T.C. 436 cannot possibly be of any avail to the petitioner. A special statutory definition of 'country liquor' has been given in the Mysore Act. There is no such definition in our Act. As already observed by me, 'beer' falls within the definition of 'liquor'. The beer in question was manufactured in India in the Mysore case as well as in our case. The Mysore law says that liquor manufactured and compounded in India and coloured and flavoured would not be country liquor for purposes of items 38 and 39. If that special definition were not there, the assessee before the Mysore High Court would not have succeeded. The petitioner cannot, therefore, successfully base an argument on a provision which does not exist in the statute with which we are concerned. The second submission of Mr. Narula also, therefore, cannot succeed.
14. No other argument having been advanced in this case, this petition must fail and is accordingly dismissed. The costs of this petition shall be borne by the parties as incurred by them.