1982 (12) TMI 185 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of whether "vermicelli" is considered "maida" for taxation purposes under the Andhra Pradesh General Sales Tax Act, 1957.

Analysis:
The High Court of Andhra Pradesh deliberated on the issue of whether "vermicelli," commonly known as "shevaya," should be classified as "maida" under entry 60 of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957. The Tribunal based its decision on precedents from the Bombay High Court and the Supreme Court. The Bombay High Court, in Commissioner of Sales Tax v. Sultan Shev Co., determined that "shevaya" is essentially "maida flour" mixed with water, supporting its classification within the relevant entry of the Bombay Sales Tax Act. Similarly, the Supreme Court in Alladi Venkateswarlu v. Government of Andhra Pradesh held that certain food items, like "parched rice" and "puffed rice," fell within broader categories, despite undergoing processing. These judgments formed the basis for the Tribunal's conclusion that "shevaya" qualifies as "maida."

The Government Pleader argued for a different interpretation, emphasizing the common parlance test to distinguish goods subjected to tax. However, the Court rejected this argument, highlighting the common understanding of goods in commercial and public spheres. Drawing parallels with the Supreme Court's decision on rice varieties, the Court reasoned that the process of turning "maida" into "shevaya" is less complex than that for "parched rice" or "puffed rice." Given the common usage and food nature of "shevaya," the Court leaned towards interpreting it as "maida" to maintain lower taxation levels. Upholding the principle of resolving doubts in favor of the assessee to benefit consumers, the Court affirmed the Tribunal's decision, dismissing the tax revision cases without costs.

In conclusion, the High Court of Andhra Pradesh upheld the classification of "vermicelli" or "shevaya" as "maida" under entry 60 of the Andhra Pradesh General Sales Tax Act, 1957, based on precedents, common understanding, and consumer welfare considerations. The Court's decision favored interpreting tax laws in a manner that benefits the assessee and promotes affordability for common consumers.