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1980 (2) TMI 227 - SC - VAT and Sales TaxWhether the appellant which is a limited company is not liable to make good to the State sales tax authorities the amount of sales tax leviable under section 6 of the Andhra Pradesh General Sales Tax Act in respect of the turnover covering the purchase by the petitioner of cotton during the period 1st April, 1969, to 8th June, 1969, which turnover had been exempted from sales tax by the Commercial Tax Officer, No. II, Guntur in his assessment order dated 30th April, 1971? Held that - Appeal dismissed. As at one stage of the argument Mr. Desai drew our attention to the fact that by reason of the amendments made in the statute law and the consequent demand by the D.C.C.T. for the refunded amount the appellant had been placed under a burden which did not fall on those who collected the Central sales tax from the purchasers and paid it to the Government because they were held entitled to refund of the tax under the A.P. Act even though they had not paid anything out of their own pocket as tax under the Central Act. However, as he did not challenge the constitutional validity of any of the amended sections he did not pursue the matter further and we need take no further notice of it.
Issues Involved:
1. Liability of the appellant to pay sales tax under the Andhra Pradesh General Sales Tax Act (A.P. Act) for the period 1st April 1969 to 8th June 1969. 2. Validity of the exemption granted by the Commercial Tax Officer (C.T.O.). 3. Impact of the retrospective amendments to Section 15 of the Central Sales Tax Act (Central Act) and Section 6 of the A.P. Act. 4. Authority of the Deputy Commissioner (Commercial Taxes) (D.C.C.T.) to revise the assessment order. 5. Applicability of Section 10 of the Central Sales Tax (Amendment) Act, 1969. 6. Interpretation of Rule 27-A of the Rules framed under the A.P. Act. Detailed Analysis: 1. Liability of the appellant to pay sales tax under the A.P. Act for the period 1st April 1969 to 8th June 1969: The primary issue was whether the appellant, a limited company, was liable to pay sales tax under Section 6 of the A.P. Act for the purchase of cotton during the specified period. The C.T.O. had initially exempted this turnover from sales tax. However, the retrospective amendments to Section 6 of the A.P. Act in 1974 and Section 15 of the Central Act in 1972 changed the legal landscape, making the appellant liable for the tax. 2. Validity of the exemption granted by the C.T.O.: The C.T.O. had granted "exemption" under the proviso to Section 6 of the A.P. Act. The High Court and the Sales Tax Appellate Tribunal found this exemption "patently wrong." The Supreme Court held that the exemption was only valid under the law as it stood before the retrospective amendments. Post-amendment, the exemption was no longer applicable as the law required reimbursement of tax only if Central sales tax was paid, which was not the case here. 3. Impact of the retrospective amendments to Section 15 of the Central Act and Section 6 of the A.P. Act: The amendments to Section 15 of the Central Act and Section 6 of the A.P. Act were made effective retrospectively from 1st October 1958. These amendments abolished the entitlement to refund and replaced it with a right to reimbursement, contingent upon the payment of tax under the Central Act. Since the appellant did not pay Central sales tax, they were not entitled to reimbursement. 4. Authority of the D.C.C.T. to revise the assessment order: The D.C.C.T. issued a notice to the appellant in 1974, revising the C.T.O.'s assessment order. The Supreme Court upheld the D.C.C.T.'s authority to revise the order, stating that the D.C.C.T. was duty-bound to correct the order to align with the amended law. The revision was necessary to remove the illegal refund granted under the original assessment. 5. Applicability of Section 10 of the Central Sales Tax (Amendment) Act, 1969: Section 10 of the 1969 Act provided an exemption from Central sales tax for sales made between 10th November 1964 and 9th June 1969, provided no tax was collected. The Supreme Court found this section irrelevant to the appellant's case under the A.P. Act, as no Central sales tax was demanded from the appellant. The issue was solely about the liability under the A.P. Act. 6. Interpretation of Rule 27-A of the Rules framed under the A.P. Act: Rule 27-A, as it stood before its amendment in 1974, provided for a refund of tax levied and collected under Section 6 if the goods were sold in inter-State trade. The Supreme Court held that even if the rule could be interpreted favorably for the appellant, it could not override the amended provisions of the A.P. Act. The rule was subsequently amended to conform to the parent statute, further nullifying the appellant's argument. Conclusion: The Supreme Court dismissed the appeal, affirming the appellant's liability to pay the tax under the A.P. Act as revised by the D.C.C.T. The retrospective amendments to the relevant sections of the A.P. Act and the Central Act were pivotal in determining the appellant's liability. The Court also emphasized that rules cannot override the legislative enactments under which they are framed. The appeal was dismissed with no order as to costs.
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