1974 (7) TMI 101 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Applicability of section 8(2A) of the Central Sales Tax Act, 1956.
2. Exemption of dressed hides and skins from further tax.
3. Interpretation of "exempt from tax generally" under state law.
4. Refund of tax levied on declared goods.

Detailed Analysis:

1. Applicability of Section 8(2A) of the Central Sales Tax Act, 1956:
The principal question was whether dressed hides and skins, tanned from hides and skins that had already suffered tax under the State sales tax law, are exempt from further tax, attracting a nil rate under section 8(2A) of the Central Sales Tax Act, 1956. Section 8(2A) states that if goods are exempt from tax generally under the State law, the tax payable under the Central law on inter-State sales of such goods shall be nil.

2. Exemption of Dressed Hides and Skins from Further Tax:
The dealer argued that the sales of dressed hides and skins, which had already suffered tax as raw hides and skins, should be exempt from further tax under the Central law. The assessing authority initially disagreed, but the Sales Tax Appellate Tribunal's majority opinion held that under the Andhra Pradesh sales tax law, sales or purchases of dressed hides and skins that had already suffered tax in the untanned condition are generally exempt from tax.

3. Interpretation of "Exempt from Tax Generally" Under State Law:
The court examined whether the sale of dressed hides and skins is exempt from tax generally under the State law. Hides and skins are listed in the Third Schedule to the Andhra Pradesh General Sales Tax Act, which subjects them to a single point tax. The court concluded that goods listed in the Third Schedule are not generally exempt from tax under the State law. The explanation to section 8(2A) clarifies that a sale or purchase of goods is not deemed to be exempt from tax generally if the exemption is only in specified circumstances or under specified conditions.

4. Refund of Tax Levied on Declared Goods:
Section 15(b) of the Central Sales Tax Act provides that if tax has been levied on declared goods inside the State and such goods are sold in the course of inter-State trade, the tax so levied shall be refunded. The court noted that refund is contemplated only when tax has been collected, indicating that hides and skins are not generally exempt from tax. The court also referred to amendments made to section 15(b) and the corresponding provisions in the Andhra Pradesh State law, which reinforced that the tax levied under the State law should be reimbursed if the goods are sold in inter-State trade.

Conclusion:
The court concluded that hides and skins, whether tanned or untanned, are not generally exempt from tax under the Andhra Pradesh State law and, therefore, are not entitled to the benefit of nil tax under section 8(2A) of the Central Sales Tax Act. The only remedy for the dealer is to seek reimbursement of the State tax after paying the Central tax. The tax revision case was allowed, and the majority opinion of the Tribunal was set aside. The writ petition was dismissed, with no order as to costs due to the difficult question of law involved.

Separate Judgments:
No separate judgments were delivered by the judges; the judgment was delivered by the court collectively.