1974 (10) TMI 93 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether live-stock fall under "goods" within the meaning of section 2(h) of the Andhra Pradesh General Sales Tax Act.
2. Whether the petitioners are entitled to the exemption contemplated under G.O. Ms. No. 2193, Revenue, dated 19th December, 1961.

Analysis:
The judgment by LAKSHMAIAH, J. of the ANDHRA PRADESH HIGH COURT addressed two main issues. Firstly, it examined whether live-stock, specifically goats and sheep, are considered "goods" under the Andhra Pradesh General Sales Tax Act. The petitioners argued that live-stock should not be classified as goods within the Act's definition. However, the court interpreted the definition of "goods" under section 2(h) of the Act, which includes all kinds of movable property. The court emphasized that the term "movable property" encompasses both animate and inanimate objects. Consequently, the court concluded that live-stock, being movable property, falls within the definition of goods as per the Act and, therefore, is subject to sales tax.

Regarding the second issue, the judgment analyzed whether the petitioners qualified for an exemption outlined in G.O. Ms. No. 2193, Revenue. This exemption applied to dealers purchasing live-stock for the purpose of selling the flesh of such animals. The petitioners, dealers in goats and sheep, sold the animals to other dealers in Madras without slaughtering them themselves. As a result, the court determined that the petitioners did not meet the criteria for the exemption since they did not directly sell the flesh of the live-stock they purchased. Therefore, the court rejected the petitioners' claim for exemption under the notification.

Additionally, a point was raised challenging the validity of rule 5 of the Andhra Pradesh General Sales Tax Rules as ultra vires. The argument contended that the rule-making authority lacked the power to determine the point of levy. However, the court dismissed this contention, stating that the rule-making authority is empowered to establish rules to fulfill the Act's purpose, which includes levying taxes on the sale or purchase of goods. The court upheld the validity of rule 5, emphasizing its role in implementing the Act's objectives.

In conclusion, the court found no merit in the writ petitions and dismissed them with costs, further emphasizing that the petitioners did not qualify for the exemption under the relevant notification.