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Jowli Sunkiah and Co. Vs. the Commercial Tax Officer and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petn. No. 509 of 1964
Judge
Reported inAIR1968AP303; [1968]21STC300(AP)
ActsAndhra Pradesh General Sales Tax Act, 1957 - Sections 6; Andhra Pradesh General Sales Tax (Amendment) Act, 1961
AppellantJowli Sunkiah and Co.
RespondentThe Commercial Tax Officer and anr.
Appellant AdvocateN. Rama Mohan Rao, Adv.
Respondent AdvocateRaja Gopal Reddy, Adv. for ;3rd Govt. Pleader
DispositionPetition allowed
Excerpt:
sales tax - levy of tax - section 6, schedule 4 item 3 of andhra pradesh general sales tax act (as amended in 1961), 1957 - tax officer levied tax on purchases of groundnuts made by petitioner - tax already recovered from crushing millers who purchased groundnuts from petitioner - held, groundnut is scheduled good liable to be taxed only at single point. - - kadiri (1964) 15 stc 795 (andh pra) in which it was held that the word miller applies equally to the decorticating miller as well as the crushing miller......from messrs. sri venkateswara oil mills. dhune and sells the kernel thus decorticated to other crushing millers. the petitioner submitted its return for the year 1962-63. the commercial tax officer, nandyal determined the turnover and levied tax on the purchases made by the petitioner of groundunt based on the turnover of kernel supplied to the crushing mills. the petitioner filed the above writ petition for the issue of a wirt of certiorari to quash the said order of assessment on the ground that groundnut is one of the scheduled goods liable to tax only at a single point, that tax has already been recovered from the crushing millers who purchased groundnut from the petitioner and sought to adduce evidence in support of this contention in the form of affidavits the commercial tax.....
Judgment:

Krishna Rao, J.

1. This is an application under Article 226 of the Constitution of India for an order in the nature of a writ of Certiorari to call for the records relating to assessment No. G. O 1. 5436/62-63 dated 15-3-1964 made by the Deputy Commercial Tax Officer Nandyal and to quash the same.

2. The petitioner firm is a dealer in groundnuts, seeds, etc. It purchases groundnut and decorticates them into kernel in a factory by taking the same on lease from Messrs. Sri Venkateswara Oil Mills. Dhune and sells the kernel thus decorticated to other Crushing millers. The petitioner submitted its return for the year 1962-63. The Commercial Tax Officer, Nandyal determined the turnover and levied tax on the purchases made by the petitioner of groundunt based on the turnover of kernel supplied to the crushing mills. The petitioner filed the above writ petition for the issue of a wirt of Certiorari to quash the said order of assessment on the ground that groundnut is one of the scheduled goods liable to tax only at a single point, that tax has already been recovered from the crushing millers who purchased groundnut from the petitioner and sought to adduce evidence in support of this contention in the form of affidavits The Commercial Tax Officer rejecting these objections, passed the impugned assessment order holding that the petitioner is the person liable to pay the tax and that even assuming that the crushing millers have paid the tax that does not affect the position. It was further stated in the order of assessment that 'tax has to be collected at the right person only notwithstanding the fact that some other dealers paid' tax and that the question of examination of affidavits does not arise at all.

3. The Question which therefore arises for consideration before us is whether the petitioner who is a decorticating miller is liable to pay the tax even assuming that the crushing millers who purchased groundnut from the petitioner have paid the tax The relevant provisions of the Andhra Pradesh General Sales Tax Act, 1957 are as follows-

Section 6 'Tax in respect of declare goods.

Notwithstanding anything contained in Section 5, the sales or purchases of declared goods by a deafer shall be liable to tax at the rate, and only at the point of sale or purchase specified against each in the Fourth Schedule, irrespective of the quantum of his turnover in such goods; and the tax shall be asessed, levied and collected in such manner is may be prescribed.

SCHEDULE IV(Declared goods in respect of which a single coin tax only is leviable under S. 6)

Description of the goodsPoint of levyRate of tax

123

8.Oil seeds,that is to say seedsyielding non- volatile oilsused for human consumption or in industry or in the manufacture....

At the point offirst pur chase in the State.

By Amending Act 3 of 1958, in item 3 aforesaid column (1) the following words were added, namely :--

'Other than coconut and cotton seeds' and items 3-A and 3-B were added specifying cotton seeds and coconuts separately. Thereafter, by Amending Act 26 of 1959 in item 3 for the words 'other than coconuts and cotton seeds' the words 'other than groundnuts, coconuts and cotton seeds' were substituted and item 3-C is added which is as follows

Description of the goodsPoint of levyRate of tax

123

8-C. GroundnutsAt the point oflast purchase inthe State.

The said item 3of Schedule IV was again the subject matter of amendment under Act 26 of 1961which provided as follows:-

Description of the goodsPoints of levyRate of tax

123

8-C. Groundnuts.When purchasedby & miller in the State at the point of purchase by the miller and inall other cases a the point of purchase by the last dealer who buy- (sic) the State....

There was however a subsequent amendment with which we are not really concerned in this case, but it may be necessary to refer to the same to complete the history of this item. That amendment is as follows :--

THIRD SCHEDULEA.P. Act XVI of 1963:(Declared goods in respect of which a single point tax only is leviable under section 6)

Description of the goodsPoint of levyRate of tax

123

6. GroundnutesWhen purchased by a miller other than adecorticating miller in the State, at the point of purchase by suchmiller and in all other case at the point of purchase by the lastdealer who buys in the State....

4. The question therefore turns upon whether sales tax is exigible from the petitioner under item 3-C. The second column of item 3-C came up for consideration before a Division Bench of this court consisting of Chandra Reddi, C. J and Gopal Rao Ekbote, J. in Y. Aswathanaravana v. D. C. T. O. Kadiri (1964) 15 STC 795 (Andh Pra) in which it was held that the word miller applies equally to the decorticating miller as well as the crushing miller. Relying evidently upon this judgment the assessing authority sought to make the petitioner liable for the tax. It is now common ground that under Section 6. the tax in respect of groundnut is only a single point tax. On the basis of the aforesaid ruling the further question is whether the petitioner who is a decorticating miller is at all liable to pay the tax as the crushing miller who purchased the groundnut from the petitioner paid the tax. The contention of Sri Ramamohan Rao, the learned counsel for the petitioner is that the levy of tax being admittedly at a single point of purchase, the tax having been once collected from the crushing miller, the power to tax is exhausted and the assessing authority has no jurisdiction to collect the same once again from the petitioner on the ground that he is also a miller coming under item. 3. The learned Government Pleader in reply stated that the petitioner-miller who happened to be the first purchaser, is the person from whom the tax is exigible and consequently he is the right person from whom the tax can be levied. The learned counsel contends that the authority must have wrongly collected from the crushing millers which may result in a claim for refund on behalf of the crushing millers. In other words, the learned Government pleader argues that the petitioner's purchase being the first purchase, he is the only person liable to pay the tax. We are not inclined to accept this argument because it is opposed to the very language of the second column of item 3 ofSchedule IV as amended in 1961. It is significant to note that the 1957 Act regarded the first purchase as the point of tax whereas the amending Act of 1959 shifted the point to the last purchase and when we come to the amendment of 1961 no point for taxation is fixed at all. Hence it logically follows that if the taxing authority levied the tax from any miller at any particular point of purchase, whether first, second or last, the power to tax comes to an end. It is not disputed that if the tax is collected from the petitioner, it is not open to the authority to collect the same from the subsequent purchasing millers. It equally follows that when the tax is collected from the crushing millers, who purchased the groundnut from the petitioner, the tax can no longer be levied against the petitioner who represents the first purchaser of the groundnut. The fact that the legislature intended to abolish the distinction between the first purchasing miller or the last purchasing miller appears to be clear from the latter part of the second column of item 3-C of Schedule IV which says that 'in all other cases at the point of purchase by the last dealer who buys it in the State' thereby indicating that the legislature is aware of the point if purchase being shifted to the last dealer in the cases contemplated as aforesaid. We are therefore of opinion that on a correct reading of item 3-C of Schedule IV Andhra Pradesh General Sales Tax Act, there is no scope for any distinction between the first purchase or the last purchase among the millers who purchased groundnut. It therefore follows that if it is shown that the crushing millers have paid the sales tax, the petitioner is not liable to pay the tax.

5. As already stated we have proceeded on the assumption of a question of fact, that the crushing millers have paid the tax. It is stated by the petitioner that the allegations in his affidavit in support of the writ petition asserting the said fact have not been denied by the Government in their counter affidavit and that there is no need to make any assumption of the said fact. We are however, not impressed with this argument and we would have been disinclined to entertain this Writ petition holding that the petitioner should file an appeal before the appellate authority, but for the fact that the case has been referred to a Division Bench by Jaganmohan Reddy. J. (as he then was) on the ground that it involves an important question of law. We therefore quash the order of assessment No. G. 1.5436 made by the Deputy Commercial Tax Officer, Nandyal. It is undoubtedly open to the said authority to make a fresh assessment in the light of the above decision. It will be open to the petitioner to let in evidence of the fact of payment of tax by the crushing millers and the assessing officer should receive such evidence in proceeding with the assessment.

6. The writ petition is therefore allowed with costs. Advocate's fee Rs. 100/-.


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