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  • MS Kalyani Breweries V State of West Bengal

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    Hemanth Rao
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    The Supreme Court ruled that the assessee brewery's collection of deposits on beer bottles constituted a sale of the bottles rather than a bailment. While the lower tax tribunals held that the absence of a time limit on returning bottles meant it was not a bailment, the Supreme Court examined the intention of the parties, lack of communication of bailment terms, and deposit amount equaling the bottle cost in determining the transaction was a sale and resale of the bottles rather than a bailment. The decision did not criticize an earlier similar case but distinguished it based on the specific facts.

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    MS Kalyani Breweries v State of West Bengal

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    The Supreme Court ruled that the assessee brewery's collection of deposits on beer bottles constituted a sale of the bottles rather than a bailment. While the lower tax tribunals held that the absence of a time limit on returning bottles meant it was not a bailment, the Supreme Court examined the intention of the parties, lack of communication of bailment terms, and deposit amount equaling the bottle cost in determining the transaction was a sale and resale of the bottles rather than a bailment. The decision did not criticize an earlier similar case but distinguished it based on the specific facts.

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    488 views1 page

    MS Kalyani Breweries V State of West Bengal

    Uploaded by

    Hemanth Rao
    The Supreme Court ruled that the assessee brewery's collection of deposits on beer bottles constituted a sale of the bottles rather than a bailment. While the lower tax tribunals held that the absence of a time limit on returning bottles meant it was not a bailment, the Supreme Court examined the intention of the parties, lack of communication of bailment terms, and deposit amount equaling the bottle cost in determining the transaction was a sale and resale of the bottles rather than a bailment. The decision did not criticize an earlier similar case but distinguished it based on the specific facts.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
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    MS Kalyani Breweries v. State of West Bengal.

    AIR 1998 SC 70
    FACTS Assessment year 1974-75 assessee brewed and sold beer in bottles for which it gave its purchasers two invoices- one regarding deposit on bottles and the other truck charges. Rate of deposits increased in 1974, refunds made when bottles returned. No time limit on return, deposit just covered cost of per bottle. Tax officer taxed the amount forfeited on deposit of bottles.

    JUDGEMENTS TAX TRIBUNALS- No time limit on return of bottles, therefore not bailment, but sale. SUPREME COURT Counsel for appellant: o Benjamins Sale of Goods: Question of construction whether containers in which goods are sold are also sold or merely bailed, remaining property of seller. o Intention not to sell the bottles o Substantial sum refunded o Reliance on United Breweries Case. Terms of Bailment unknown to bailee-no public notification. No communication of terms. Rate equal to cost of bottles, therefore its a sale of bottles to the customers, and then a resale to the assesee. Quantum of deposit very high compared to quantum of refund.

    This decision does not criticize the United Breweries case, merely looks at it differently.

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