1966 (11) TMI 83 - HC - VAT and Sales Tax

Summary

Issues:
- Whether the petitioner, a decorticating miller, is liable to pay tax on the purchase of groundnuts when tax has already been paid by crushing millers who purchased from the petitioner.
- Interpretation of relevant provisions of the Andhra Pradesh General Sales Tax Act, 1957 regarding the point of levy for tax on groundnuts.
- The impact of subsequent amendments on the liability to pay tax on groundnuts.

Analysis:
The writ petition before the Andhra Pradesh High Court raised the issue of whether a decorticating miller is liable to pay tax on groundnuts when tax has already been paid by crushing millers who purchased from the petitioner. The Court noted that the Sales Tax Authorities seemed to believe that only the decorticating miller was responsible for tax payment at a single point purchase. However, the Court highlighted that the law did not clearly specify this and subsequent amendments aimed to clarify the position. The Court emphasized the importance of the issue affecting a larger number of cases, leading to the reference of the matter to a Division Bench for decision.

The Division Bench analyzed the relevant provisions of the Andhra Pradesh General Sales Tax Act, particularly Schedule IV, which specified the point of levy for tax on declared goods. The Court discussed the amendments made to Schedule IV over the years, emphasizing the shift in the point of taxation from the first purchase to the last purchase. The Court interpreted the law to conclude that once tax is collected from any miller at any point of purchase, the power to tax ends. Therefore, if tax has been paid by subsequent purchasing millers, the first purchaser (decorticating miller) is not liable to pay tax again.

The Court further addressed the factual aspect of whether the crushing millers had indeed paid the tax. The petitioner claimed that this fact was not denied by the Government in their counter-affidavit. While the Court acknowledged this argument, it highlighted that the case was referred to the Division Bench due to its legal significance. Consequently, the Court quashed the assessment order and allowed the writ petition with costs. The assessing officer was directed to consider evidence of tax payment by crushing millers in any fresh assessment. The judgment clarified the liability of the petitioner and emphasized the importance of correctly interpreting tax laws to avoid double taxation and ensure fairness in assessments.