In Brief
Mohan Breweries purchased empty bottles from unregistered dealers to bottle Beer and IMFL products for sale to the state marketing authority. The revenue demanded purchase tax under Section 7-A of the Tamil Nadu General Sales Tax Act, while the company claimed exemption based on earlier revenue clarifications stating bottles, being taxed at sale, were exempt from purchase tax. The Supreme Court held that purchase tax is leviable on the bottles because they were 'used otherwise' within the statutory provision, even though not consumed in manufacture itself. The bottles became unavailable for sale in their original form after bottling. The Court rejected reliance on administrative clarifications, holding that court declarations of law bind all authorities and override contrary circulars. The cash discount issue was decided in favor of the company under the statutory exemption for discounts.
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