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Sohail and Co. Vs. the State of Andhra Pradesh and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case Number Tax Revision Case No. 101 of 1977
Judge
Reported in[1979]43STC504(AP)
AppellantSohail and Co.
RespondentThe State of Andhra Pradesh and ors.
Appellant Advocate S. Sankaram, Adv.
Respondent Advocate The Government Pleader for Commercial Taxes
DispositionPetition dismissed
Excerpt:
.....(dahi) obtained by fermenting milk. dahi when subjected to churning yields butter (makkhan) and buttermilk as by product. the shelf life of dahi is two days whereas that of butter is a week. by simmering unsalted butter in a pot until all water is boiled, ghee is obtained which has shelf life of more than a year in controlled conditions. ghee at least as of now is most synthesized, ghee is a natural product derived ultimately from milk. so to say, milk is converted to dahi, then butter. scientifically or common sense point of view, even though ghee is not directly obtained from milk (which is certainly a product of cow/buffalo), it is certainly a product of a product of livestock i.e., cow or buffalo. it would be rather illogical or irrational to say that ghee is not a milk/dairy..........c.j.1. in this tax revision case we are concerned mainly with the scope of the exemption given to fresh milk, curds and buttermilk in g. o. ms. no. 1091, revenue, dated 10th june, 1957. that g. o. was issued by the governor of andhra pradesh in exercise of the powers conferred on him by sub-section (1) of section 9 of the andhra pradesh general sales tax act, 1957, to exempt from taxation certain goods. in the sai'd g. o., as many as 20 items are enumerated, but we are now mainly concerned with item no. 3 therein, viz., fresh milk, curds and buttermilk.2. before we proceed further, we would like to point out very briefly the facts which gave rise to this tax revision case. the petitioner is a dealer in eggs, dressed chicken, fruits, etc. for the assessment year 1971-72, he returned a.....
Judgment:

Sambasiva Rao, C.J.

1. In this tax revision case we are concerned mainly with the scope of the exemption given to fresh milk, curds and buttermilk in G. O. Ms. No. 1091, Revenue, dated 10th June, 1957. That G. O. was issued by the Governor of Andhra Pradesh in exercise of the powers conferred on him by Sub-section (1) of Section 9 of the Andhra Pradesh General Sales Tax Act, 1957, to exempt from taxation certain goods. In the sai'd G. O., as many as 20 items are enumerated, but we are now mainly concerned with item No. 3 therein, viz., fresh milk, curds and buttermilk.

2. Before we proceed further, we would like to point out very briefly the facts which gave rise to this tax revision case. The petitioner is a dealer in eggs, dressed chicken, fruits, etc. For the assessment year 1971-72, he returned a gross turnover of Rs. 3,29,633.70 and claimed exemption in respect of .a turnover of Rs. 3,26,058.70. The assessing officer granted the exemption and arrived at a net taxable amount of Rs. 3,575, which represented the sales of dressed chicken. To put it in other words, the assessee himself, when he filed the return, did not claim any exemption in respect of the sum of Rs. 3,575, which amount represented the sales of dressed chicken.

3. The Deputy Commissioner suo motu took notice of the matter and found exception to the assessing officer granting exemption in respect of the turnover of Rs. 21,245.50 representing the sales of fresh milk. He gave notice to the petitioner why this exemption given by the assessing officer should not be withdrawn. In his reply, the petitioner objected to the proposed withdrawal of the exemption given in the case of milk and also raised an additional point that even the turnover of Rs. 3,575, relating to the dressed chicken, should also be exempted from tax. The Deputy Commissioner rejected both the contentions and withdrew the exemption in respect of the milk as well. The petitioner appealed to the Sales Tax Appellate Tribunal, which rejected the claim of the petitioner under both the heads.

4. First taking up the question relating to the turnover of Rs. 21,245.50 relating to the sales of milk, reliance was placed before the Tribunal, by the petitioner, on the decision of the Punjab and Haryana High Court in State of Punjab v. National Bakery [1974] 34 S.T.C. 37. The Tribunal distinguished that case and held that the claim of the petitioner for exemption from tax on the sales of milk could not be accepted. Sri Sankaram reiterated the same contention before us.

5. We have already referred to the fact that the Governor exempted under G. O. Ms. No. 1091 dated 10th June, 1957, certain products from taxation. Item 3 thereof is 'fresh milk, curds and buttermilk'. In the original G. O. of 1957 only those words were mentioned. But by G. O. Ms. No. 60 dated 10th January, 1961, the words 'sold by dealers exclusively dealing in them' were added and later by another G. O. Ms. No. 1786, Revenue, dated 20th November, 1962, the following words were also added : 'and their products realised by utilisation of surplus thereof'. As a consequence of these additions, item 3 in the said G. O. now and also at the relevant time of the assessment, reads thus :

Fresh milk, curds and buttermilk (sold by dealers exclusively dealing in them) (and their products realised by utilisation of surplus thereof).

6. It is worthy of note that this qualification 'sold by dealers exclusively dealing in them' is not added to the other items mentioned in the G. O., except to items 3 and 19. As far as item 19 is concerned, an explanation was added, but there is no qualification in respect of other exempted items, which are 18 in number in the said G. O. Reading the G. O. as a whole, it is patent and very clear that only those dealers who sell exclusively fresh milk, curds and buttermilk or their products realised by utilisation of surplus thereof are exempt from taxation. It follows that if they sell, in addition to these commodities, any other commodity, the exemption provided for in the said G. O. is not available. That this is the plain meaning of entry 3 cannot be escaped from.

7. Sri Sankaram however contends that the words 'exclusively dealing in them' should be understood differently. In his submission, if a dealer sells in addition to fresh milk, curds and buttermilk, some other exempted commodity or commodities, he is still exempt from taxation. He bases this contention on the argument that since the goods he is dealing in, in addition to fresh milk, are also exempted from taxation. According to him, it is reasonable to construe the words 'exclusively dealing in them' as not taking in their ambit the other items which are exempted from taxation. In respect of this contention, he relies on the decision [1974] 34 S.T.C. 37 of the Punjab and Haryana High Court above-mentioned. A Division Bench of that Court was dealing with the scope of the words 'dealing exclusively'. There they were concerned with bakery goods which were exempt from tax, if they were dealing exclusively in such goods and if they were not sold in containers and packets. But, in that case, in addition to the bakery goods, the dealer was selling eggs as well. Another item of the same schedule of the Punjab Act exempted meat, fish and eggs except when they were sold in tins, bottles or cartons. The learned Judges held that the mere fact that a dealer sells two exempted goods will not make the dealer selling goods, which are exempt, liable to sales tax merely because he is also selling another tax-free goods, namely, eggs. Otherwise, it would result in nullifying both the exemptions which result could not be envisaged. In the first place, the language used in this item giving exemption under the Punjab law is somewhat different from the language contained in G. O. Ms. No. 1091. Be that as it may, even as a general proposition, we are not inclined to agree with the view taken by the Punjab and Haryana High Court. This is a taxation statute and it must be construed strictly. This construction will have to be based on the language employed in levying tax or giving exemption to commodities from tax. The language used for giving exemption to sales of fresh milk, curds and buttermilk, which has been extracted above, does not leave any scope for doubt or ambiguity. Fresh milk, curds and buttermilk are exempt only when they were sold by dealers exclusively dealing in them. It does not say that if, in addition to fresh milk, etc., other exempted commodities are also sold, the exemption will be available. Had that been the intention of the Governor, while issuing the Government Order, he could have easily said so. What is more important is, if that were the intention of the Governor, there was no need for him to add the words 'sold by dealers exclusively dealing in them' only in items 3 and 19 and not adding the same words in other items. The very fact that these qualifying words are used in items 3 and 19 shows that in addition to fresh milk, curds and buttermilk, if a dealer sells any other commodity, he loses the benefit of exemption given by the said G. O. It is also material to note that to start with, in G. O. Ms. No. 1091, only the words 'fresh milk, curds and buttermilk' occurred and there were no qualifying words. The qualifying words, as we have pointed out, were added by G. O. Ms. No. 60 dated 10th January, 1961. There is no doubt that they were added with the specific purpose and intention of limiting the exemption from tax in respect of sales of fresh milk, curds and buttermilk, only if the dealer exclusively deals in them. It will be doing violence to the language of the G. O. in general, and item 3 in particular, if it is construed that the exemption will be still available to the dealer even though he does not deal exclusively in fresh milk, curds and buttermilk but also sells some other exempted commodity. We are not, therefore, with due respect, inclined to agree with the view expressed by the Punjab and Haryana High Court.

8. Applying the abovesaid principle to the facts of the present case, it is common ground that the petitioner deals also in eggs, meat, fruits, etc., in addition to fresh milk. Therefore, he is not entitled to the exemption in respect of the sales of fresh milk. Though the Tribunal has put it slightly differently, its conclusion is correct for the reasons we have stated above.

9. Now remains a small item relating to the sale of dressed chicken. There is no evidence on record to show that the dressed chicken dealt in by the petitioner was neither canned, preserved, dried or dehydrated. Only in those forms 'meat' is exempted from tax. There was no evidence to this effect because the petitioner himself did not originally claim any exemption for the dressed chicken. It was as an afterthought and at a later stage he raised this claim before the Deputy Commissioner when he sent a notice to the petitioner asking why the exemption given in respect of fresh milk should not be withdrawn. In view of this lack of evidence and also the conduct of the petitioner, when he did not originally claim exemption in respect of the dressed chicken, we do not think that this item deserves consideration at this stage.

10. In the result, we are not inclined to accept the two contentions raised by Sri Sankaram while commending the tax revision case for our acceptance. The tax revision case is consequently dismissed, but in the circumstances, without costs. Advocate's fee Rs. 150.


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