1967 (3) TMI 87 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of section 8 of the Central Sales Tax Act and section 5(2)(a) of the Andhra Pradesh General Sales Tax Act.
2. Determination of the applicable tax rate on rice obtained from paddy that has suffered tax at 3 nP. in the rupee.
3. Whether rice obtained from paddy that has suffered tax at 3 nP. in the rupee should be taxed at 1 nP. in the rupee or 2 nP. in the rupee.

Detailed Analysis:
The High Court of Andhra Pradesh dealt with a batch of 68 revision petitions challenging an order of the Sales Tax Appellate Tribunal. The issue revolved around the assessment of dealers in rice engaged in inter-State trade. The Tribunal remanded the appeals to determine the tax rate applicable to rice obtained from paddy that has suffered tax at 3 nP. in the rupee. The key statutes involved were section 8 of the Central Sales Tax Act and section 5(2)(a) of the Andhra Pradesh General Sales Tax Act, along with item 66 of the First Schedule. The Tribunal held that section 8(2-A) applied, and rice should be taxed at 1 nP. in the rupee under item 66(b), rejecting the department's argument for a 2 nP. rate.

The Court analyzed the concept of "tax generally" and its application to rice obtained from paddy taxed at 3 nP. in the rupee. It concluded that such rice should be taxed at 1 nP. in the rupee, distinct from rice not subjected to the same tax rate. The Court emphasized the need to avoid discrimination and ensure uniformity in taxation. Referring to precedents like Karnatak Coffee Co. case, the Court supported its interpretation by highlighting the need to uphold constitutional provisions and avoid discriminatory taxation practices.

Additionally, the Court addressed the inclusion of container costs in turnover, leaving the matter open for the taxing authorities to decide on remand. It clarified that the scope of the remand was not limited by the Tribunal. Ultimately, the revision petitions were dismissed with costs, upholding the Tribunal's decision to tax rice obtained from paddy at 1 nP. in the rupee.