1972 (9) TMI 125 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Liability of ryot-principals as dealers.
2. Entitlement to exemption from tax under Section 9 of the Andhra Pradesh General Sales Tax (Amendment) Act, 1970.
3. Inclusion of chamber cooli collections in taxable turnover.

Detailed Analysis:

1. Liability of Ryot-Principals as Dealers:
The primary issue was whether the sales of jaggery by commission agents on behalf of ryot-principals are taxable, given that the ryot-principals are not considered dealers. The court examined the definition of "dealer" and the relevant amendments to the Andhra Pradesh General Sales Tax Act. The ryot-principals converted sugarcane into jaggery, which was argued to be a process different from mere cleaning, grading, or sorting, thus making them dealers under the Act. The court remanded the matter to the assessing authorities to conduct an enquiry to determine if the ryot-principals were indeed carrying on business by selling jaggery to obtain higher dividends. The Tribunal had set aside the Assistant Commissioner's finding and directed a fresh enquiry to ascertain the facts.

2. Entitlement to Exemption from Tax:
The second issue was whether the assessees were entitled to exemption under Section 9 of the Andhra Pradesh General Sales Tax (Amendment) Act, 1970, on the ground that they did not collect any amount by way of tax. The court noted that Section 9 provides exemption if it is proved that no amount was collected by way of tax. However, it was observed that the assessing authorities had not conducted a proper enquiry to determine if the amounts collected as rusum or kolagaram were indeed tax. The Tribunal directed the assessing authorities to make fresh assessments after giving the assessees an opportunity to present evidence that the amounts collected were not by way of tax but were for other purposes.

3. Inclusion of Chamber Cooli Collections in Taxable Turnover:
The third issue was whether the chamber cooli collections made by the assessees formed part of their taxable turnover. The Assistant Commissioner had held that these collections were part of the taxable turnover, a finding that was upheld by the Tribunal. The court did not find merit in the assessees' contention that these collections should not be included in the taxable turnover.

Conclusion:
The court dismissed the revision petitions, affirming the Tribunal's decision to remand the cases to the assessing authorities for fresh consideration. The court emphasized the need for a thorough enquiry to determine the true nature of the transactions and the amounts collected by the assessees. The burden of proving that no amount was collected by way of tax lies with the assessees, as stipulated under Section 9 of the Amendment Act, 1970. The court upheld the Tribunal's directive for fresh assessments and provided an opportunity for the assessees to present relevant evidence. The petitions were dismissed with costs, and the advocate's fee was set at Rs. 50 for each petition.