1975 (11) TMI 142 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether copra was liable to sales tax during the relevant assessment year at the point of last purchase in the State under item 5 of Schedule III of the Andhra Pradesh General Sales Tax Act read with section 6 of the Act.
2. Whether copra qualifies as "declared goods" under section 14(vi) of the Central Sales Tax Act, 1956.
3. The impact of the amendment introduced by Act 12 of 1971 on the taxability of copra.

Issue-wise Detailed Analysis:

1. Liability of Copra to Sales Tax:
The primary issue was whether copra was liable to sales tax at the point of the last purchase in the State under item 5 of Schedule III of the Andhra Pradesh General Sales Tax Act read with section 6 of the Act. The court examined the relevant provisions of the Act which stated that sales or purchases of declared goods by a dealer shall be liable to tax at the rate and point specified in the Third Schedule. Item 5 of Schedule III specified that tax on coconuts, including copra, was to be levied at the point of last purchase in the State at a rate of 3 paise in the rupee.

2. Qualification of Copra as "Declared Goods":
The court needed to determine if copra qualified as "declared goods" under section 14(vi) of the Central Sales Tax Act, 1956. Declared goods are defined as goods of special importance in inter-State trade or commerce. The court noted that item (vi) of section 14 includes "oil-seeds," which are seeds yielding non-volatile oils used for human consumption or in industries. The petitioner argued that copra, although used for human consumption, is not an oil-seed because it cannot germinate. The court referred to various judgments, including the Madras High Court's decision in City Oil Mill v. Joint Commercial Tax Officer, which held that copra could not be considered an oil-seed. However, the court also considered contrary judgments from the Mysore and Kerala High Courts, which held that in commercial parlance, coconut and copra are considered oil-seeds. The court concluded that copra is indeed an oil-seed within the meaning of section 14(vi) of the Central Sales Tax Act, as it is commonly regarded as such in the commercial world.

3. Impact of Act 12 of 1971 Amendment:
The petitioner contended that even if copra is an oil-seed, the amendment introduced by Act 12 of 1971 affected its taxability. The amendment substituted item 5 in the Third Schedule with "coconuts of all varieties" and introduced item 5-A for watery coconuts. The petitioner argued that copra is not included in "coconuts of all varieties" and thus should not be taxed. The court clarified that the amendment was retrospective only for item 5-A and prospective for item 5. The court also held that the term "coconuts of all varieties" is broad enough to include copra, thus maintaining its taxability.

Conclusion:
The court dismissed the writ petitions, holding that copra is liable to sales tax at the point of last purchase in the State under item 5 of Schedule III of the Andhra Pradesh General Sales Tax Act read with section 6 of the Act. The court affirmed that copra qualifies as "declared goods" under section 14(vi) of the Central Sales Tax Act, 1956, and that the amendment introduced by Act 12 of 1971 did not affect the taxability of copra. The petitions were dismissed with costs.