1963 (3) TMI 41 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Purchase tax liability for cotton sold to Anglo-French Textile Mills Ltd., Pondicherry.
2. Taxability of cotton seeds.
3. Deduction of turnover subjected to Central Sales Tax.
4. Jurisdiction of the Sales Tax Appellate Tribunal to interfere with the order of the Commercial Tax Officer regarding the turnover of Rs. 3,61,663.

Issue-wise Detailed Analysis:

1. Purchase Tax Liability for Cotton Sold to Anglo-French Textile Mills Ltd., Pondicherry:
The petitioner contended that the transactions with Anglo-French Textile Mills Ltd., Pondicherry, were inter-State sales and thus not liable for purchase tax under the Andhra Pradesh General Sales Tax Act, 1957. The assessee argued that the mills should be considered the last dealer in the State, making them liable for the tax. The court examined the nature of the sales, considering sections 2(n) and 4 of the Andhra Pradesh General Sales Tax Act and the Central Sales Tax Act, 1956. The court concluded that the situs of the sale was in Andhra Pradesh but emphasized that the transactions were in the course of export, falling under section 5 of the Central Sales Tax Act, 1956. Therefore, the petitioner was deemed the last dealer liable for the tax, affirming the decision of the Sales Tax Appellate Tribunal.

2. Taxability of Cotton Seeds:
The petitioner argued that taxing cotton seeds amounted to double taxation since they were originally part of cotton. The court rejected this argument, stating that cotton and cotton seeds are distinct commodities once separated. Therefore, taxing cotton seeds separately did not constitute double taxation, and the claim was rightly rejected.

3. Deduction of Turnover Subjected to Central Sales Tax:
The petitioner sought deduction of turnover subjected to Central Sales Tax from the purchase turnover under rule 6(1)(j) of the Andhra Pradesh General Sales Tax Rules. The court noted that the objection was not presented in this form before the Commercial Tax Officer, leading to a lack of factual investigation. The court emphasized that total turnover includes all transactions, whether taxed under the Central Act or exempted. The net turnover is determined by deducting specified amounts from the gross turnover. The court found no merit in the argument that the turnover should only include purchase transactions, rejecting the claim for deduction.

4. Jurisdiction of the Sales Tax Appellate Tribunal:
The petitioner contended that the Tribunal lacked jurisdiction to interfere with the Commercial Tax Officer's order regarding the turnover of Rs. 3,61,663, as the department did not appeal against it. The court referred to section 21(4) of the Andhra Pradesh General Sales Tax Act, 1957, which grants the Tribunal broad powers to confirm, reduce, enhance, annul, or set aside assessments and penalties. The Tribunal's decision to remand the case for further investigation was within its jurisdiction, as it aimed to correct departmental errors. The court affirmed the Tribunal's order, finding no grounds for interference.

Conclusion:
The court affirmed the decision of the Sales Tax Appellate Tribunal on all issues. The petition was dismissed with costs, and the order of the Tribunal was upheld in its entirety.