1982 (3) TMI 228 - HC - VAT and Sales Tax

Summary

Issues Involved: Constitutionality of entries 144 and 147 of the First Schedule to the Andhra Pradesh General Sales Tax Act; whether ravva obtained from wheat, rice or maize, and parched and fried Bengal gram are assessable to tax at the specified rates.

Issue 1: Constitutionality of Entries 144 and 147 of the First Schedule to the Andhra Pradesh General Sales Tax Act

The petitioners argued that entries 144 and 147 of the First Schedule to the Andhra Pradesh General Sales Tax Act are ultra vires and violative of Article 286(3) of the Constitution of India, read with Section 15(a) of the Central Sales Tax Act. They contended that ravva obtained from rice or wheat and fried gram dhall should not be taxed at 1% and 5% respectively as per these entries. The court noted that the Central Sales Tax (Amendment) Act (103 of 1976) specified rice, wheat, and gram as goods of special importance under Section 14, making them subject to restrictions under Section 15(a) of the Central Act, which limits state tax to 4% at a single stage. However, the court held that the commodities mentioned in items 144 and 147 are not declared goods under Section 14 of the Central Act, and therefore, the entries in the State Act are intra vires and continue to hold good.

Issue 2: Taxability of Ravva Obtained from Wheat, Rice, or Maize

The petitioners claimed that ravva is essentially the same commodity as rice or wheat, involving no manufacturing process, and thus should not be subjected to additional tax under item 144 of the First Schedule. The court examined the definitions and provisions of both the State and Central Acts, concluding that the term "cereals" in Section 14 of the Central Act is exhaustive and does not include products derived from cereals like ravva. The court emphasized that the intention of Parliament was to declare only specific goods as of special importance, not their derivatives. Therefore, ravva obtained from wheat, rice, or maize is not considered declared goods and is taxable under the State Act.

Issue 3: Taxability of Parched and Fried Bengal Gram

The petitioners argued that parched or fried Bengal gram is not different from gram or gulab gram and should not be taxed under item 147 of the First Schedule. The court referred to the specific language of Section 14 of the Central Act, which lists only certain goods as declared goods. The court held that the declared goods mentioned in Section 14 are exhaustive and do not include derivatives like fried Bengal gram. Additionally, the court noted that in commercial parlance, fried Bengal gram is treated as a different commodity from gram or gulab gram, used for different purposes. Therefore, fried Bengal gram is not considered declared goods and is taxable under the State Act.

Issue 4: Relevant Judicial Precedents

The petitioners relied on several Supreme Court decisions, including Alladi Venkateswarlu v. Government of Andhra Pradesh, Tungabhadra Industries Ltd. v. Commercial Tax Officer, and Commissioner of Sales Tax v. Jaswant Singh Charan Singh, to support their contention that ravva and rice or wheat are the same commodity. However, the court distinguished these cases, noting that the specific question of interpretation of the Central Act's provisions was not addressed in those cases. The court also referred to the decision in State of Tamil Nadu v. Pyare Lal Malhotra, which emphasized that the expression "that is to say" in Section 14 is meant to exhaustively enumerate the kinds of goods listed, and not to include derivatives.

Conclusion

The court concluded that entries 144 and 147 of the First Schedule to the Andhra Pradesh General Sales Tax Act are intra vires and continue to hold good even after the amendment of the Central Sales Tax Act by Act No. 103 of 1976. The commodities mentioned in these entries are not considered declared goods under Section 14 of the Central Act, and therefore, the restrictions under Section 15(a) do not apply. The writ petitions and T.R.C. were dismissed without costs, and an oral application for leave to appeal to the Supreme Court was also dismissed.