1975 (11) TMI 141 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of sales tax levy on powa, muramura, and pelalu under Andhra Pradesh General Sales Tax Act.

Analysis:
The case involved a writ petition questioning the imposition of sales tax on powa, muramura, and pelalu under the Andhra Pradesh General Sales Tax Act. The petitioners, licensed foodgrain dealers, argued against the tax demand issued by the authorities following the withdrawal of a previous exemption. The central issue was whether the sales tax should be levied under section 5(1) of the Act or under section 5(2)(b) read with item 66(b) of the First Schedule of the Act.

The judgment analyzed the relevant provisions of the Act to determine the appropriate tax treatment. Section 5(1) mandates a general turnover-based tax for dealers meeting specified thresholds, while section 5(2) outlines specific tax points and rates for different goods. The court examined whether powa, muramura, and pelalu, being products of paddy, fell under the purview of item 66(b) of the First Schedule, which prescribes a specific tax rate for rice obtained from paddy meeting tax requirements.

Considering the historical context of exemptions and the nature of the products in question, the court concluded that the sales tax on powa, muramura, and pelalu should be levied under entry 66(b) of the First Schedule. This decision was based on the classification of these goods as products of paddy, subject to tax under specific provisions. The judgment clarified that while multipoint taxation under section 5(1) was not applicable, the products fell under the scope of item 66(b) for tax assessment.

Ultimately, the court granted a partial relief to the petitioners, allowing the imposition of sales tax on powa, muramura, and pelalu in accordance with entry 66(a) or (b) of the First Schedule, depending on the payment of tax at the purchase point of paddy. The judgment highlighted the distinction between general turnover tax and specific product-based taxation, emphasizing compliance with the prescribed tax rates and provisions under the Act.

In conclusion, the judgment resolved the issue by directing the authorities to levy and collect sales tax on the petitioners for the specified goods under the appropriate schedule entry, addressing the specific tax treatment for products derived from paddy under the Andhra Pradesh General Sales Tax Act.