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Kottagudem Beer Wines Vs. the Government of Andhra Pradesh - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petition No. 11298 of 1983
Judge
Reported in[1987]66STC70(AP)
ActsAndhra Pradesh General Sales Tax Act, 1957 - Sections 1(2), 2(1), 5, 5(2), 12, 12(2) and 39(2A)
AppellantKottagudem Beer Wines
RespondentThe Government of Andhra Pradesh
Appellant AdvocateS. Krishna, ;C. Jayasree Sarathy, ;C.P. Sarathy, ;P. Balakrishna Reddy, ;T. Dasaratharamayya, ;S. Dasaratharama Reddy, ;T. Raghunath Reddy, ;P. Venkatarama Reddy, ;R.V. Subba Rao, ;Badri Premnath, ;Ko
Respondent AdvocateGovernment Pleader for ;CT and PR
Excerpt:
sales tax - levy - sections 1 (2), 2 (1), 5, 5 (2), 12, 12 (2) and 39 (2a) of andhra pradesh general sales tax act, 1957 and articles 14 and 213 of constitution of india - appellants were registered dealer under act of country liquor and liquors other than country liquor - act amended subsequently with retrospective effect and dealers charged accordingly - amendment effected on ground of ordinance issued by state government - appellants dragged ordinance and act into writ - ordinance was in tune of constitutional provisions under article 213 - appellants alleged amended act was violative of article 14 of constitution of india as there is no intelligible differentia between dealers and the dealer at the last point - court observed that all that the dealer had to do is to produce the bill.....amareswari, j.1. this batch of writ petitions relate to the levy of sales tax on country liquors and liquors other than country liquors. the petitioners are wholesale and retail dealers in liquor, having valid licences under the andhra pradesh foreign liquor and indian liquor rules of 1970 framed under the andhra pradesh excise act of 1968. they are also registered dealers under the andhra pradesh general sales tax act of 1957. 2. respondent no. 1 is the government of andhra pradesh. on 8th july, 1983, the governor of andhra pradesh issued ordinance no. 11 of 1983 purporting to amend the andhra pradesh general sales tax act, 1957, hereinafter called the principal act. the amendments in so far as they are relevant for the purposes of this case are : (1) addition of clause (d) after clause.....
Judgment:

Amareswari, J.

1. This batch of writ petitions relate to the levy of sales tax on country liquors and liquors other than country liquors. The petitioners are wholesale and retail dealers in liquor, having valid licences under the Andhra Pradesh Foreign Liquor and Indian Liquor Rules of 1970 framed under the Andhra Pradesh Excise Act of 1968. They are also registered dealers under the Andhra Pradesh General Sales Tax Act of 1957.

2. Respondent No. 1 is the Government of Andhra Pradesh. On 8th July, 1983, the Governor of Andhra Pradesh issued Ordinance No. 11 of 1983 purporting to amend the Andhra Pradesh General Sales Tax Act, 1957, hereinafter called the principal Act. The amendments in so far as they are relevant for the purposes of this case are :

(1) Addition of clause (d) after clause (c) in sub-section (2) of section 5 [section 2(ii) of the Ordinance] which is as follows :

'(d) in the case of the goods mentioned in the Sixth Schedule, at the rates and at the points specified as applicable thereto, on the turnover of the dealer in each year relating to such goods irrespective of the quantum of turnover.' (2) Addition of sub-section (2A) to section 39 (section 3 of the Ordinance), which is as follows :

'(2A) Any rule made under this Act, may be made so as to have retrospective effect.' (3) Omission of items 25 and 26 and the entries relating thereto from the First Schedule [section 4, clause (13), of the Ordinance].

(4) Addition of Sixth Schedule (section 8 of the ordinance).

3. The Sixth Schedule is as follows :

'[Goods in respect of which tax is leviable under section 5(2)(d).]

------------------------------------------------------------------------Description of the goods Point of levy Rate of tax------------------------------------------------------------------------(1) (2) (3)------------------------------------------------------------------------1. Country liquor. At every point of 10 paise insale in the State. the rupee.2. All liquors other than At every point of 25 paise incountry liquor. sale in the State. the rupee.------------------------------------------------------------------------ Provided that at any point of sale other than the first point of sale, the tax paid on the immediately preceding sale of such goods shall be deducted from the tax payable on such sale on proof of the payment of tax on the immediately preceding sale being adduced to the satisfaction of the assessing authority.

Explanation :- In this Schedule, 'country liquor' means 'liquor' manufactured in India, other than liquor manufactured and compounded in India and coloured and flavoured to resemble gin, brandy, whisky, vodka, wine or rum imported from outside the territory of India.'

4. In essence the amendment is to the effect that country liquor and liquors other than country liquor which were taxable at the point of first sale under the principal Act are now taxable at every point of sale subject to certain conditions. There is also a change in the rate of tax. In the case of country liquor there is no change. It is 10 paise in the rupee both under the principal Act as well as under Ordinance No. 11 of 1983. In the case of liquors other than country liquor it was 50 paise in some cases and 25 paise in some cases. Under the Ordinance it was uniformly 25 paise in the rupee. These two items, country liquor and all liquors other than country liquor, which stood in the First Schedule were omitted and they were shown as items 1 and 2 in the Sixth Schedule and the charging section, namely, section 5, is accordingly amended by introducing clause (d) after clause (c) in sub-section (2) of section 5.

5. While so, the Legislative Assembly of the State of Andhra Pradesh assembled on 10th August, 1983. The Legislative Council met on 12th August, 1983. On 25th August, 1983, the Sales Tax (Amendment) Bill containing the provisions of the Ordinance with some alterations was introduced in the Assembly. The Bill seeks to amend the Sales Tax Act with effect from 8th July, 1983, and to repeal Ordinance No. 11 of 1983. But before the Bill could be passed and made an Act, the Assembly was prorogued on 20th September, 1983, on which date another Ordinance, Ordinance No. 19 of 1983, was promulgated by the Governor of Andhra Pradesh. This Ordinance is styled as the Andhra Pradesh General Sales Tax (Second Amendment) Ordinance. This came into force on 20th September, 1983. Here again we find, (1) addition of clause (d) to sub-section (2) of section 5 of the principal Act; (2) addition of sub-section (2A) to section 39; (3) omission of items 25 and 26 and the entries relating thereto from the First Schedule and (4) addition of Sixth Schedule to the principal Act. The Sixth Schedule as introduced by this Ordinance is slightly different from the Sixth Schedule contained in Ordinance No. 11 of 1983. The rate of tax is altered and in the case of country liquor it is 10 paise in the rupee at every point of sale other than the last point of sale and 5 paise in the rupee at the point of last sale in the State. In the case of liquors other than country liquor the rate of tax is 25 paise in the rupee at every point of sale other than the last point of sale in the State and 5 paise in the rupee at the point of last sale in the State. The proviso to the Sixth Schedule is also altered to the effect that the turnover of the goods at any point of sale other than the first point of sale shall be arrived at by deducting the turnover of such goods on which tax has been levied at the immediately preceding point of sale.

6. The Andhra Pradesh Legislative Assembly passed the Andhra Pradesh General Sales Tax (Amendment) Act (11 of 1984) amending the various provisions of the principal Act. This Act is called the Andhra Pradesh General Sales Tax (Amendment) Act of 1984. Sub-section (2) of section 1 of the amending Act gave different dates for coming into force of different sections of the amending Act. Under clause (i), sections 3, 4, clause (b) of section 9 and section 10 of the amending Act which related to amendments of section 6, 12 and some entries in the Fifth Schedule and the addition of the Sixth Schedule in the principal Act were given retrospective operation from 8th July, 1983. Under clause (ii), clauses (ix), (xxx) and (lx) of section 6 of the amending Act which related to amendment of certain entries in the First Schedule were given operation from 24th August, 1983, and under clause (iii) the remaining provisions were given effect from 20th September, 1983. This Act itself was passed on 21st March, 1984. Thus this amending Act gave three dates for coming into force of the various provisions of the amending Act. While clause (d) of sub-section (2) of section 5 which was added by this amending Act was given retrospective operation with effect from 20th September, 1983, and also the deletion of items 25 and 26 from the First Schedule from the same date, the Sixth Schedule which was added after the Fifth Schedule was given retrospective operation from 8th July, 1983. The Sixth Schedule in the amending Act is the same as Sixth Schedule in Ordinance No. 19 of 1983. This Act had repealed Ordinance No. 19 of 1983, i.e., the Second Amendment Ordinance.

7. Originally these writ petitions were filed challenging the validity of Ordinance No. 11 of 1983. By the time, the writ petitions came up for hearing Amendment Act 11 of 1984 was passed. At the time of arguments, the petitioners sought time for seeking amendment of the petition so as to enable them to challenge the validity of the Act. Time for filing petitions for amendment was granted and thereafter the petitioners amended their prayer by seeking to challenge the validity of the Act also.

8. Though several contentions were raised in the writ petitions regarding the validity of the Ordinance and the Act, no arguments were advanced on the validity of the Act or Ordinance as such. The contentions raised by the petitioners are threefold : (1) Section 2 of the amending Act which added clause (d) to sub-section (2) of section 5 was given retrospective operation only with effect from 20th September, 1983. Section 5 is the charging section. Therefore, for the period from 8th July, 1983 to 20th September, 1983, country liquor and liquors other than country liquor are taxable only as per the unamended provision, namely, section 5(2)(a), which says that tax shall be levied on the goods mentioned in the First Schedule at the rates and at the point of sale specified therein. It is submitted that these two items which stood as items 25 and 26 in the First Schedule of the principal Act were omitted from the First Schedule [by clause (xi) of section 6 of the amending Act] with retropsective effect only from 20th September, 1983. These two items remained in the First Schedule till 20th September, 1983. They therefore submit that no tax can be levied as per the amended Act for the period prior to 20th September, 1983, notwithstanding the fact that the Sixth Schedule was amended with effect from 8th July, 1983. In the absence of a charging section, the Sixth Schedule cannot be given effect to. Since the charging section was amended only with effect from 20th September, 1983, for the period prior thereto these two items cannot be subjected to tax as per the Sixth Schedule and they are liable to be taxed only under the unamended provisions, i.e., section 5(2)(a) read with the First Schedule.

9. In answer to this contention, the learned Government Pleader submitted that for the period between 8th July, 1983 and 20th September, 1983, there was the Ordinance which added clause (d) to section 5(2) of the principal Act enabling the State to tax the items mentioned in the Sixth Schedule at the rates mentioned therein. An Ordinance has the same effect as an Act of the Legislature and has full force of law and hence tax is leviable for the period during which the Ordinance was in force.

10. Ordinance No. 11 of 1983 was promulgated by the Governor of Andhra Pradesh in exercise of his power under article 213 of the Constitution of India. Article 213(1) of the Constitution empowers the Governor of a State to issue Ordinances when the Houses of the Legislature are not in session if he is of the opinion that immediate action is necessary. Clause (2) of article 213 gives the Ordinance the same force and effect as an Act of the Legislature of the State. However, sub-clause (a) of clause (2) of article 213 requires that every Ordinance should be placed before both the Houses (in case where there is a Legislative Council also) and the Ordinance shall cease to operate at the expiration of six weeks from the reassembly of the legislature or if before the expiry of that period a resolution disapproving it is passed by the Legislative Assembly and agreed to by the Legislative Council, if any, upon the passing of the resolution. Under sub-clause (b) the Governor can withdraw the Ordinance at any time. The explanation to the article says that where there are Legislative Assembly and Legislative Council and they are summoned to reassemble on different dates, the period of six weeks shall be reckoned from the latter of those dates. It is in exercise of this power under article 213 that Ordinance No. 11 of 1983 was passed. It was promulgated on 8th July, 1983. The Legislative Assembly and the Legislative Council of the State of Andhra Pradesh reassembled on 10th August, 1983 and 12th August, 1983 respectively. Therefore, the period of six weeks shall be reckoned from 12th August, 1983. From this provision, it is clear that Ordinance No. 11 of 1983 will have the same force and effect as any other law up to 24th September, 1983. On 20th September, 1983, the Assembly was prorogued and Ordinance No. 19 of 1983 was passed. Therefore, Ordinance No. 11 of 1983 is in force up to 20th September, 1983, on which date Ordinance No. 19 of 1983 was passed. The latter Ordinance was repealed by Act 11 of 1984 and the Act was given retrospective effect, some provisions with effect from 8th July, 1983, some with effect from 24th August, 1983, and some from 20th September, 1983. So for all practical purposes, Ordinance No. 19 of 1983 can now be ignored since it is repealed. It is well-settled that 'repeal' connotes abrogation or obliteration of one statute by another, from the statute book as completely 'as if it had never been passed'; when an Act is repealed, 'it must be considered as if it had never existed' (vide India Tobacco Co. v. Commercial Tax Officer : [1975]2SCR612 ). The short question for consideration is whether there was any valid law prior to that date authorising levy of tax on the two items mentioned in the Sixth Schedule at the rates mentioned therein. The amending Act 11 of 1984 has introduced the Sixth Schedule with effect from 8th July, 1983. True, in the absence of a charging section, the schedule cannot be given effect to. But Ordinance No. 11 of 1983 which was in force from 8th July, 1983 to 20th September, 1983, amended section 5 of the principal Act by adding clause (d) to sub-section (2) of section 5 authorising the State to levy tax on the goods mentioned in the Sixth Schedule at the rates and at the points of sale mentioned therein. The validity of the Ordinance is not challenged. Under article 213(2) an Ordinance shall have the same force and effect as the Act of the Legislature. Therefore, it is not correct to contend that there was no charging section prior to 20th September, 1983, authorising the levy of tax in accordance with the Sixth Schedule. Act 11 of 1984 which had repealed Ordinance No. 19 of 1983 continued the operation of section 5(2)(d) introduced by Ordinance No. 11 of 1983. It is not contended that an amendment of the principal Act cannot be brought about by an Ordinance.

11. In R. K. Garg v. Union of India AIR 1981 SC 2138 while dealing with the powers of the president to issue Ordinance under article 123 of the Constitution of India, the Supreme Court observed as follows :

'If Parliament can by enacting legislation alter or amend tax laws, equally can the President do so by issuing an Ordinance under article 123. There have been, in fact, numerous instances where the President has issued an Ordinance replacing with retrospective effect a tax law declared void by the High Court or this court ........ That there is no qualitative difference between an Ordinance issued by the President and an Act passed by Parliament is also emphasized by clause (2) of article 367 which provides that any reference in the Constitution to Acts or laws made by Parliament shall be construed as including a reference to an Ordinance made by the President. We do not therefore think there is any substance in the contention of the petitioner that the President has no power under article 123 to issue an Ordinance amending or altering the tax laws and that the Ordinance was therefore outside the legislative power of the President under that article.'

12. Article 123 is analogous to article 213 of the Constitution which empowers the Governor to promulgate Ordinances. Hence even tax laws can be amended by an Ordinance.

13. Mr. S. Krishna, the learned counsel for the petitioners, contended that Ordinance No. 11 of 1983 must be deemed to have been impliedly withdrawn. We find it difficult to accept this contention in view of clause (b) of article 213(2) of the Constitution which says that Ordinance may be withdrawn at any time by the Governor. There cannot be a withdrawal by implication. Ordinance No. 11 of 1983 was not withdrawn by the Governor. It is not even repealed. It had its full force up to 20th September, 1983, when the Assembly was prorogued and a new Ordinance was promulgated which was later repealed by Act 11 of 1984.

14. It is then contended that the Ordinance is in the nature of a temporary statute and in the absence of a saving provision, no proceedings under that temporary Statute can be taken after the expiry of the statute. In support of this contention, the learned counsel for the petitioner relied upon State v. Jagamander Das : AIR1954SC683 . In this case, it was held that where a statute comes to an end by efflux of time, no prosecution for acts done during the continuance of the expired Act can be commenced after the date of its expiry because that would amount to the enforcement of a dead Act. We fail to see how this decision has any application to the facts of the present case. The levy was authorised under the Ordinance. Under the Sales Tax Act the returns have to be filed every month. It is only the assessment and collection that is postponed.

15. The next case cited is Gopi Chand v. Delhi Administration : 1959CriLJ782 . In this case a statute which came into force in 1949 was to expire in 1951. After the expiry of the statute proceedings were taken following the procedure prescribed by the said Act. Following a passage in Interpretation of Statutes by Craies, which said that as a general rule unless it contains a special provision to the contrary, after a temporary Act had expired, no proceedings can be taken upon it, and it ceases to have any further effect, the Supreme Court observed that the legislature very often avoid such a situation by providing a saving provision which is somewhat similar to the effect of the provisions of section 6 of the General Clauses Act. On this reasoning it was held that the proceedings against the appellant therein could not be continued after the expiry of the Act.

16. In State of Orissa v. Bhupendra Kumar : AIR1962SC945 it is pointed out that though the general rule in regard to a temporary statute is that in the absence of special provision to the contrary, proceedings, will ipso facto terminate as soon as the statute expires, the rule is not inflexible and admits of exceptions. The effect of the expiry of a temporary Act must depend upon the nature of a right or obligation resulting from the provisions of the temporary Act and whether the said right and liability are enduring or not. The Supreme Court further said that in considering the effect of expiry of a temporary statute, it would be unsafe to lay down any inflexible rule. If the right created by the statute is of an enduring character and has vested in the person, that right cannot be taken away because the statute by which it was created had expired. If a penalty had been incurred under the statute and had been imposed upon a person, the imposition of the penalty survives the expiration of the statute.

17. The learned Government Pleader, however, contended that Ordinance No. 11 of 1983 had been impliedly repealed by Ordinance No. 19 of 1983 which is replaced by Act 11 of 1984 and that by virtue of section 8 of the Andhra Pradesh General Clauses Act, the repeal does not affect anything done or any proceeding begun before the commencement of the repealing Act or affect any right accrued under the enactment so repealed. We do not agree with this submission either.

18. There is a presumption against a repeal by implication. The legislature while enacting the law has complete knowledge of the existing laws on the same subject-matter and when it does not provide a repealing provision it gives out an intention not to repeal the existing legislation. But the presumption can however be rebutted and a repeal can be inferred by necessary implication when the provisions of the latter Act are so inconsistent with or repugnant to the provision of the earlier Act. In the present case, Ordinance No. 11 of 1983 is not repealed. It had its full force up to 20th September, 1983, as per article 213(1) of the Constitution of India. Act 11 of 1984 had repealed only Ordinance No. 19 of 1983. There was also no implied repeal as there was no inconsistency between Ordinance No. 11 of 1983 and Act 11 of 1984. Implied repeals are not generally favoured and where two enactments are affirmative, the question of inconsistency does not arise. While one is for a temporary duration, the latter is a permanent enactment (vide T.M.L.S. Bradari v. Improvement Trust : [1963]1SCR242 ).

19. Having regard to the provisions of article 213 of the Constitution of India, we are of the clear view that Ordinance No. 11 of 1983 was in operation for the period between 8th July, 1983 to 20th September, 1983. During this period, section 5(2)(d) was in force, which authorities the State to levy tax on country liquors and liquors other than country liquors which appear as items 1 and 2 in the Sixth Schedule at the rates and at the points specified as applicable therefor. Act 11 of 1984 only continued the operation of section 5(2)(d) with effect from 20th September, 1983. Ordinance No. 11 of 1983 is neither repealed expressly nor impliedly. It had its full force from 8th July, 1983 to 20th September, 1983.

20. It is argued by Mr. Kannabhiran on behalf of the petitioners that there is intrinsic evidence in the amending Act 11 of 1984 to show that the legislature wanted the charging section to come into force only with effect from 20th September, 1983, and not prior thereto. He relied upon clause (iii) of sub-section (2) of section 1, which says that the remaining provisions shall be 'deemed to have come into force on 20th September, 1983'. Emphasis was laid on the words 'shall be deemed to have come into force' to say that this is a clear indication of the legislature's intention that the provision should come into effect only from 20th September, 1983. Mr. Kannabhiran submits that if they wanted to give retropsective operation to section 5(2)(d) with effect from 8th July, 1983, they would have said so. Instead it mentioned the date 20th September, 1983. Being aware of the Ordinance, if they have not said anything about it, it must be deemed that they have not approved the Ordinance. We are unable to see any force in this submission. No special significance can be given to the words 'shall be deemed to have come into force' excepting that the amendment effected by this Act came into force on 20th September, 1983. But there is nothing in this section to show that the legislature intended that section 5(2)(d) was to be effective only from 20th September, 1983. The legislature was fully aware of the fact that there was an Ordinance, namely, Ordinance No. 11 of 1983, which had the full force of law up to 20th September, 1983. Hence there was no necessity to give retropsective operation from an anterior date. On the other hand, we have clear indications in the amending Act that the intention was to levy the tax as per the Sixth Schedule with effect from 8th July, 1983. Otherwise, there was no necessity to amend the schedule with effect from 8th July, 1983. The amending Act also amended section 12 of the principal Act by substituting the words 'and Fifth Schedule' with the words 'Fifth and Sixth Schedules' with effect from 8th July, 1983, and section 12(2)(a) as amended reads 'notwithstanding anything contained in sub-section (1) every dealer carrying on business in all or any of the goods mentioned in the First, Second, Third, Fifth and Sixth Schedules (no Sixth Schedule prior to amendment) excepting a person doing business in a small bunk, or a hawker or any other class of dealer notified by the State Government in this behalf, shall get himself registered under this Act, irrespective of the quantum of his turnover in such goods'. The amendment of the schedule and section 12 read together clearly point out that the intention of the legislature was to tax the goods mentioned in the Sixth Schedule with effect from 8th July, 1983. Otherwise, there is no meaning in amending the schedules of the principal Act with retrospective effect from 8th July, 1983. If the contention of the petitioners is accepted, it would render the amendment of section 12 and the Sixth Schedule ineffective and nugatory. This would be contrary to the clear intention of the legislature which in so many words said that the Sixth Schedule and the amendment of section 12 would come into force from 8th July, 1983. One of the objects and reasons for the amendment was to raise the general rate of tax in respect of liquors and to curb evasion of tax in Indian-made foreign liquor by subjecting them to tax at each point of sale with some conditions. It was thought that immediate action was necessary to achieve this object and an Ordinance was promulgate as the legislature was not in session. The whole idea in promulgation of the Ordinance was that this amendment should be introduced immediately and the Ordinance was promulgated on 8th July, 1983. The Ordinance and the provisions of the Act clearly indicate the intention of the legislature that liquors should be taxed as per the Sixth Schedule from the earliest point of time, namely, 8th July, 1983. The reason for not amending section 5(2) with effect from 8th July, 1983, as pointed out in the counter-affidavit is for the reason that the legislature thought that the Ordinance was in operation till that time and there was no necessity to amend the section which already stood amended by virtue of the Ordinance. But the Sixth Schedule was given retropsective effect from 8th July, 1983, notwithstanding the fact that the Ordinance had also introduced the Sixth Schedule, as the entries in the Sixth Schedule relating to the two items were changed. That is why the Sixth Schedule was given retrospective operation specifically from 8th July, 1983. So far as section 5(2) is concerned, there is no change. It was continued as it was in the Ordinance.

21. In State of Andhra Pradesh v. Murali Cafe [1971] 28 STC 399 (AP) [FB] a question arose whether tax has to be levied at the rate prescribed under the principal Act or the amended Act. In this case, prior to the amendment the rate of tax was 3 per cent if the total turnover was not less than Rs. 25,000. Under the amended section, tax was leviable at the rate of 2 per cent if the turnover was not less than Rs. 40,000 on the first Rs. 39,999 and at the rate of 3 per cent on the balance of the turnover. The authorities have taken different views and the Tribunal finally held that the amended provision had to be given effect to and therefore the assessee has to be assessed on a turnover of Rs. 39,999 at 2 per cent. On a revision filed by the State, a Full Bench of this Court held that sales tax is imposed on receipts from individual sales or purchases of goods effected during the accounting period. The taxable event under the Act is either sale or purchase and the scheme of the Act is that each transaction of sale or purchase by a dealer attracts tax at the point of time when the transaction takes place though for the purpose of convenience the computation of turnover is made annually. The liability to pay tax arises on the happening of the taxable event though quantification and its collection may be postponed till after the total turnover is determined, the tax quantified and the actual demand made. In this view, the Full Bench held that the amended proviso would govern the transactions completed after it came into force and the quantum of tax will be determined according to the rates prevailing after the amendment and that the transactions completed prior to the date of amendment would be governed by the proviso as it previously existed and the tax would be collected at the rates mentioned in the unamended proviso. Thus the ratio of this decision is that the taxable event which attracts tax is either the sale or purchase at the point of time when the transaction takes place though the computation is done at a later stage.

22. In Sri Venkateswara Rice, Ginning and Groundnut Oil Mill v. State of Andhra Pradesh [1971] 28 STC 599 the Supreme Court held as follows :

'It is now well-settled that even under the sales tax laws, the charge in respect of a sale or purchase becomes effective as soon as the sale in the case of sales tax and purchase in the case of purchase tax is made, though the liability of the dealer can be computed only at the end of the year. The incurring of the charge is one thing and its computation is a totally different thing.'

23. From these two decisions, it is clear that the taxable even is the sale and the liability is attracted the moment sale is effected though computation is postponed. Applying the ratio of these two decisions, it is plain that the charge in respect of the sales during 8th July, 1983 to 20th September, 1983, became effective then and there and are governed by the law existing during that period. As Ordinance No. 11 of 1983 was in force during that period, it cannot be said that the Sixth Schedule is not attracted as section 5(2)(d), the charging section, was in force.

24. We, therefore, see no substance in the contention that the State has no authority or power to levy tax as per the Sixth Schedule for the period between 8th July 1983 and 20th September, 1983.

25. The second submission of the learned counsel for the petitioners is that the proviso to the Sixth Schedule is violative of equality clause enshrined in article 14 of the Constitution of India inasmuch as a discrimination is made between dealers and the dealer at the last point of sale, that the discriminations has no intelligible differentia, and it has no rationale or nexus with the object sought to be achieved. As per the entries in the Sixth Schedule at every point of sale other than the last point of sale a higher rate of tax is prescribed. In the case of country liquor it is 10 paise in a rupee and in the case of liquors other than country liquor it is 25 paise. In the case of last sale it is 5 paise in both the cases. The proviso prescribes the method in which the turnover of the goods has to be determined. It says that at any point of sale other than the first point of sale and the last point of sale, the turnover of the goods liable to tax shall be arrived at by deducting the turnover of such goods on which tax has been levied at the immediately preceding point of sale. So far as the first point of sale is concerned, the turnover has to be taxed as such. There cannot be any dispute about this. At the subsequent point of sale the proviso provides for the deduction of the turnover which has already suffered tax previously. The idea is that the turnover which has already been taxed should not be taxed once again. By this method there will be more revenue to the State and at the same time no undue burden is cast upon the dealers by taxing the goods at every point. Then when we come to the last sale, as per the proviso tax has to be levied on the entire turnover and it is precisely for that reason a lesser rate of tax is prescribed. While it is 10 paise and 25 paise in other cases at the point of last sale it is 5 paise. The classification of transactions with reference to every point of sale other than the first point of sale and the last point of sale is rational. The levy of tax at 10 per cent and 25 per cent respectively on country liquors and all liquors other than country liquors, other than at the point of last sale with a set-off provision and the levy of tax at 5 per cent at the point of last sale in both the cases without set-off, is quite reasonable in our opinion and does not amount to any discrimination. The Supreme Court of India in the case of Khyerbari Tea Co. v. State of Assam : [1964]5SCR975 held as follows :

'In tax matters the State is allowed to pick and choose districts, objects, persons, methods and even rates for taxation if it does so reasonably.'

26. In Kodar v. State of Kerala : [1975]1SCR121 the Supreme Court held as follows :

'The large dealer occupies a position of economic superiority by reason of his greater volume of his business. And to make his tax heavier, both absolutely and relatively, is not arbitrary discrimination, but an attempt to proportion the payment to capacity to pay and thus to arrive in the end at a more genuine equality.'

27. In Hoechst Pharmaceuticals Ltd. v. State of Bihar : [1985]154ITR64(SC) the Supreme Court pointed out that the economic wisdom of tax is within the exclusive province of the legislature. The only question for the court to consider is whether there is rationality in the belief of the legislature that capacity to pay the tax increases by and large with an increase of receipts.

28. In Meenakshi v. State of Karnataka : AIR1983SC1283 the Supreme Court observed as follows :

'In the matter of taxation, the Constitution gives a wide latitude to the legislation in classification for taxation.'

29. The scheme of levy at every point of sale other than the first point of sale with a set-off and the last point of sale without a set-off is quite rational. The reduction of rate of tax at the point of last sale and the elimination of the procedure of set-off was to give relief to the small dealers in the matter of levy and collection of tax at their hands. Hence we find no substance in the contention that the proviso to the Sixth Schedule is violative of article 14 of the Constitution of India.

30. It is next submitted that the proviso is impossible of compliance as the dealer will not be in a position to give the particulars of the turnover of the goods in the hands of the preceding dealer. We find no substance in this contention either. 'Turnover' is defined in section 2, clause(s), of the Sales Tax Act. It is as follows :

''Turnover' means the total amount set out in the bill of sale (or if there is no bill of sale, the total amount charged) as the consideration for the sale or purchase of goods (whether such consideration be cash, deferred payment or any other thing of value) including any sums charged by the dealer for anything done in respect of goods sold at the time of or before the delivery of the goods and any other sums charged by the dealer, whatever be the description, name or object thereof.'

31. In view of this definition clause, we do not find any difficulty in giving effect to the proviso to the Sixth Schedule. All that the dealer has to do is to produce the bill of sale under which he purchased the goods and have it deducted from his own turnover to arrive at the turnover on which he has to pay tax. To illustrate the point, if the dealer has purchased the goods for a sum of Rs. 100 he can produce the bill and have that amount deducted from his turnover and pay tax only on the balance. It is not necessary for the dealer to produce the particulars of all sales by his immediate preceding dealer. There is absolutely no difficulty in giving effect to this proviso.

32. It is lastly submitted by Mr. Ashok, the learned counsel for some of the petitioners, that the proviso is ambiguous and is capable of being understood in more than one sense, namely, that it is only the turnover on which tax was paid at the preceding sale that may be deducted and not the total turnover on which tax was paid. We do not think that the proviso is capable of any such interpretation and we have also not been shown any instances where the proviso has been interpreted in such a manner. However, we would like to clarify the position. At the point of first sale, if the turnover is Rs. 100 tax shall be paid on Rs. 100. At the point of second sale if the turnover is Rs. 125 tax shall be levied only on Rs. 25 as Rs. 100 had already suffered tax. Similarly, in the case of third sale, in arriving at the turnover the amount of Rs. 125 has to be deducted and not merely the turnover on which tax was paid at the preceding sale, i.e., Rs. 25. Similarly in the case of next sale, the total turnover on which tax was paid must be deducted.

33. It is represented by Mr. Krishna, the learned counsel for the petitioners, that in some cases orders have been passed during the pendency of the Ordinances by taking into consideration the provisions of Ordinance No. 11 of 1983. Since the Sixth Schedule was amended with effect from 8th July, 1983, we direct the respondents to make the assessments on the basis of the Sixth Schedule as it stood with effect from 8th July, 1983. In such cases the respondents are directed to make fresh assessments in accordance with the interpretation and the observations made in this judgment.

34. In the result, we hold that the Andhra Pradesh General Sales Tax (Amendment) Ordinance No. 11 of 1983 and the Andhra Pradesh General Sales Tax (Amendment) Act No. 11 of 1984 are valid and sales tax is leviable as per the Sixth Schedule on country liquors and liquors other than country liquors with effect from 8th July, 1983.

35. The writ petitions are accordingly dismissed. No costs. Advocate's fee Rs. 150 in each.

36. Writ petitions dismissed.


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