1981 (1) TMI 232 - HC - VAT and Sales Tax

Issues Involved:
1. Constitutionality of Entry 145 of the First Schedule to the Andhra Pradesh General Sales Tax Act.
2. Interpretation of "timber" under Entry 63.
3. Validity of taxation on timber cut into sizes under Entry 145.
4. Alleged violation of Article 14 of the Constitution.
5. Alleged violation of Article 19(1)(g) of the Constitution.

Issue-wise Detailed Analysis:

1. Constitutionality of Entry 145 of the First Schedule to the Andhra Pradesh General Sales Tax Act:
The primary question in this batch of writ petitions was whether Entry 145 of the First Schedule to the Andhra Pradesh General Sales Tax Act is ultra vires and unconstitutional. The petitioners, who are timber dealers, contended that Entry 145, which subjects logs cut into sizes such as beams, rafters, and planks to tax at the point of first sale, is unconstitutional. They argued that timber, even when cut into sizes, continues to be "timber" under Entry 63, which is taxable only at the point of first sale by the forest department. The Court, however, held that the legislature's intention in introducing Entry 145 was to treat cut sizes of timber as a different commodity from timber, thereby validating the separate taxation under Entry 145.

2. Interpretation of "timber" under Entry 63:
The petitioners argued that timber, even when cut into sizes, should be interpreted as "timber" under Entry 63, relying on the decision in Ramaswamy v. State of Andhra Pradesh[1973] 32 S.T.C. 309. The Court, however, disagreed, noting that the legislature introduced Entry 145 specifically to treat cut sizes of timber such as beams, rafters, and planks as a different commodity from timber. The Court referenced the Kerala High Court's reasoning in Kuttirayin & Co. v. State of Kerala[1976] 38 S.T.C. 282, which distinguished between timber logs and commercial articles like planks and scantlings.

3. Validity of taxation on timber cut into sizes under Entry 145:
The Court upheld the validity of taxation under Entry 145, stating that the intention of the legislature was clear in treating cut sizes of timber as separate from timber. The Court emphasized that logs cut into sizes such as beams, rafters, and planks are different commercial articles and can be taxed as such under Entry 145, independent of Entry 63. The Court also referenced the Supreme Court's decision in State of Tamil Nadu v. Pyare Lal Malhotra[1976] 37 S.T.C. 319, which supported the separate taxation of different commercial commodities.

4. Alleged violation of Article 14 of the Constitution:
The petitioners contended that the dual taxation under Entries 63 and 145 violated Article 14 of the Constitution, arguing that the same commodity was being taxed twice arbitrarily. The Court rejected this contention, holding that the commodities described under Entries 63 and 145 are different, and therefore, there is no violation of Article 14. The Court also addressed a specific argument by Sri P. Venkatarama Reddy regarding differential treatment based on the purchaser of the timber, concluding that Explanation V, when read in conjunction with Entry 145, does not violate Article 14.

5. Alleged violation of Article 19(1)(g) of the Constitution:
The petitioners argued that the impugned levy under Entry 145 constituted an unreasonable restriction on their right to trade, thus violating Article 19(1)(g) of the Constitution. However, the Court noted that no substantive arguments were advanced on this contention and therefore did not find any violation of Article 19(1)(g).

Conclusion:
The writ petitions were dismissed with costs, and the Court found no substantial question of law warranting an appeal to the Supreme Court. The interim order made during the pendency of the writ petitions was extended for two months to allow the petitioners to seek special leave from the Supreme Court.

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