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K.N. Krishnaiah Setty and Sons Vs. Deputy Commercial Tax Officer - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petition No. 362 of 1960
Judge
Reported in[1963]14STC1(AP)
AppellantK.N. Krishnaiah Setty and Sons
RespondentDeputy Commercial Tax Officer
Appellant AdvocateT. Anantha Babu, Adv.
Respondent AdvocateThird Government Pleader
DispositionPetition dismissed
Excerpt:
- .....c.j.1. it is the connotation of 'tobacco and all its products' occurring in schedule v to the andhra pradesh general sales tax act, 1957, as amended by the andhra pradesh general sales tax (amendment) act, 1958 (iii of 1958) that falls for determination in this writ petition.2. the petitioner-firm is a dealer in tobacco and crushed tobacco stalks. for the assessment years 1957-58 and 1958-59 the deputy commercial tax officer, hindupur, issued notices to the petitioner to submit a return of the turnover in respect of the crushed tobacco stems and stalks for the purpose of subjecting them to sales tax.3. thereupon, the petitioner approached this court invoking its jurisdiction under article 226 of the constitution and contending that crushed tobacco stalks are not exigible to tax, as.....
Judgment:

P. Chandra Reddy, C.J.

1. It is the connotation of 'tobacco and all its products' occurring in Schedule V to the Andhra Pradesh General Sales Tax Act, 1957, as amended by the Andhra Pradesh General Sales Tax (Amendment) Act, 1958 (III of 1958) that falls for determination in this writ petition.

2. The petitioner-firm is a dealer in tobacco and crushed tobacco stalks. For the assessment years 1957-58 and 1958-59 the Deputy Commercial Tax Officer, Hindupur, issued notices to the petitioner to submit a return of the turnover in respect of the crushed tobacco stems and stalks for the purpose of subjecting them to sales tax.

3. Thereupon, the petitioner approached this Court invoking its jurisdiction under Article 226 of the Constitution and contending that crushed tobacco stalks are not exigible to tax, as that commodity is exempted under Schedule V of the Andhra Pradesh General Sales Tax Act, 1957. In support of this petition, it is urged by Sri Anantha Babu that the expression 'tobacco and all its products' is comprehensive enough to take in crushed tobacco stalks also. This argument is based upon the definition of 'tobacco' as provided in Section 2(c) of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (Act 58 of 1957) which says:

the words and expressions 'sugar', 'tobacco', 'cotton fabrics', 'rayon or artificial silk fabrics' and 'woollen fabrics' shall have the meanings respectively assigned to them in items Nos. 8, 9, 12, 12A and 12B of the First Schedule to the Central Excises and Salt Act, 1944.

4. In item 9 of the 1st Schedule to the Central Excises and Salt Act, 1944, tobacco is classified into 'unmanufactured tobacco' and 'manufactured tobacco', and 'stalks' falls in the category of 'unmanufactured tobacco'. Hence, there can be no doubt that crushed stalks of tobacco come within the purview of 'tobacco' as defined in the Additional Duties of Excise (Goods of Special Importance) Act, 1957.

5. The only point for consideration in this writ petition is whether the expression 'tobacco and all its products' occurring in Schedule V to the Andhra Pradesh General Sales Tax Act, 1957, could be interpreted in the light of the definition contained in the Central enactment. In our opinion, this has to be read in conjunction with the definition contained in the Central enactment, having regard to the circumstances in which these items, namely, '(i) all varieties of textiles, viz., cotton, woollen or silken including rayon, art silk or nylon, whether manufactured by handloom, power loom, or otherwise, (ii) sugar and (iii) tobacco and all its products', came to be inserted in Schedule V of the Andhra. Pradesh General Sales Tax Act, 1957, which deals with goods exempted from tax under Section 8.

6. Taking into account the recommendations of the Second Finance Commission dated 30th September, 1957, the Union Government formulated a scheme to impose additional duties of excise on (i) textiles, (ii) sugar and (iii) tobacco and for that purpose enacted the Additional Duties of Excise (Goods of Special Importance) Act, 1957, providing for levy of excise duties on these commodities in replacement of sales tax levied by the various States. The scheme of the Act is, the net profits were to be distributed amongst the States. The Central Act came into force on 24th December, 1957. However, there was no provision in the Andhra Pradesh General Sales Tax Act to exempt those goods from the levy of sales tax. Since the State Government was anxious that there should not be double taxation in respect of these very goods, the Government of Andhra Pradesh, in exercise of the powers conferred on them by Section 9, exempted from payment of tax all classes of goods in respect of which additional duties of excise are leviable by the Central Government with effect from 24th December, 1957, subject to the condition that the dealer would prove to the satisfaction of the assessing authority that additional duties of excise have been so levied and collected on such goods by the Central Government. Later on, the Andhra Pradesh General Sales Tax Act, 1957, itself was amended by insertion of these items, viz., (i) all varieties of textiles etc., (ii) sugar and (iii) tobacco and all its products, in Schedule V. The expression 'tobacco and all its products', as it is, is ambiguous and perhaps is subject to diverse meanings. But if we look into the circumstances under which the Legislature introduced the above-mentioned amendment, it would become clear that it has the same import as that expression in the Additional Duties of Excise (Goods of Special Importance) Act, 1957.

7. It is true that the statement of objects and reasons cannot aid us in the construction of a statute but it will be legitimate to look into it for the purpose of knowing the circumstances under which the enactment was made. That way, the statement furnishes us a clue to the construction of the expression 'tobacco and all its products'. It is plain that the intendment of the Legislature in amending the Schedule was to avoid double taxation in respect of these three commodities which were exigible to additional excise duty under the Central Statute. That being the real position, we think that tobacco stalks are governed by item 7 of Schedule V to the Andhra Pradesh General Sales Tax Act, 1957. In that situation, the judgment of this Court in T.R.C. No. 52 of 1958, which interpreted 'tobacco and all its products' mentioned in item 13 of Section 3(2-A) of the Madras General Sales Tax Act does not govern the instant case. It is true that it was laid down there that crushed stalks of tobacco were outside the purview of item 13 of Section 3(2-A) of the Madras General Sales Tax Act which mentions tobacco and all its products. The present situation is dissimilar to the one that obtained in that case and the principle of that case is inapplicable to the instant case.

8. Therefore, with regard to the turnover for the period subsequent to 1st April, 1958, crushed tobacco stalks are not subject to levy under the Andhra Pradesh General Sales Tax Act but so far as the turnover for the prior period is concerned, the petitioner will not be entitled to the benefits of the notification relied on by him, unless he established that he had paid the additional excise duty as contemplated by the notification. The Sales Tax Department will work out the liability of the petitioner in the light of the law declared by us.

9. With this declaration of law, the writ petition is dismissed. There will be no order as to costs.


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