1973 (11) TMI 78 - HC - VAT and Sales Tax

Summary

Issues:
Levy and collection of purchase tax on dried coconuts derived from tax-paid watery coconuts, entitlement to refund of tax paid on watery coconuts, interpretation of proviso in Andhra Pradesh General Sales Tax Act.

Analysis:
The petitioners, dealers in dry coconuts, sought a writ to declare the levy and collection of purchase tax on dried coconuts derived from tax-paid watery coconuts as unauthorized. The tax was paid by vendors on watery coconuts, and the petitioners argued that since tax was already paid on watery coconuts, dry coconuts made from them should not be taxed. They requested a refund of the tax paid on watery coconuts for the assessment years 1967-68 to 1970-71. The court noted a delay in filing the writ petition for the earlier years but decided to consider all years due to the same legal principle applying.

The court analyzed the proviso introduced by the Andhra Pradesh General Sales Tax (Amendment) Act, which stated that tax collected on watery coconuts should be refunded if tax was also collected on coconuts made from them. The proviso did not specify the recipient of the refund, but the court interpreted it to refer to the person on whom the tax was levied and collected, i.e., the vendors who paid tax on watery coconuts. The court emphasized that the tax on watery coconuts should be refunded to those who paid it, not to the dealers in dry coconuts. The proviso clearly indicated that tax on watery coconuts should be refunded, and since the petitioners were not the ones taxed on watery coconuts, they were not entitled to the refund. Therefore, the court dismissed the writ petition, stating that the petitioners, as dealers in dry coconuts, were not the entitled recipients of the tax refund on watery coconuts.

In conclusion, the court held that the proviso in the Act entitled only those who were taxed on watery coconuts to claim a refund, not the dealers in dry coconuts. The court's interpretation focused on the specific language of the proviso, emphasizing that the tax on watery coconuts should be refunded to the vendors who paid it. Consequently, the court dismissed the writ petition, ruling in favor of the respondents and ordering the petitioners to pay costs.