1991 (8) TMI 302 - HC - VAT and Sales Tax

Issues Involved:
1. Legality of the levy of sales tax under section 5 of the Andhra Pradesh General Sales Tax Act, 1957, on maida, ravva, atta, sujji, and bran.
2. Whether these products can be considered as "declared goods" under section 14 of the Central Sales Tax Act, 1956.
3. Applicability of Article 301 of the Constitution of India.
4. Relevance of previous judgments by the Supreme Court and High Courts.

Detailed Analysis:

1. Legality of the levy of sales tax under section 5 of the Andhra Pradesh General Sales Tax Act, 1957:

The petitioners, roller flour mills, challenged the levy of sales tax on maida, ravva, atta, sujji, and bran, arguing that it was illegal, unjust, and violated Articles 265, 286, and 19(1)(g) of the Constitution of India. They sought a declaration that the levy under section 5 of the Andhra Pradesh General Sales Tax Act, 1957, was unlawful and requested a refund of the sales tax collected.

2. Whether these products can be considered as "declared goods" under section 14 of the Central Sales Tax Act, 1956:

The court examined section 14 of the Central Sales Tax Act, which lists goods of special importance in inter-State trade or commerce, including cereals like wheat. However, the by-products of wheat, such as maida, ravva, atta, sujji, and bran, are not mentioned in section 14. The court noted that while by-products of coal and iron are explicitly listed, no such mention is made for wheat by-products. Consequently, these by-products cannot be considered "declared goods" under the Central Act.

3. Applicability of Article 301 of the Constitution of India:

Article 301 guarantees the freedom of trade, commerce, and intercourse throughout India. The court emphasized that this principle underpins sections 14 and 15 of the Central Sales Tax Act, which aim to facilitate free trade by declaring certain goods as having special importance in inter-State commerce. However, since maida, ravva, atta, sujji, and bran are not listed as declared goods, their taxation under state law does not violate Article 301.

4. Relevance of previous judgments by the Supreme Court and High Courts:

The petitioners relied on the Supreme Court's decision in Alladi Venkateswarlu v. Government of Andhra Pradesh, which held that parched rice and puffed rice are "rice" within the meaning of the Andhra Pradesh General Sales Tax Act. However, the court distinguished this case, noting that the Supreme Court's decision was based on the absence of separate entries for parched and puffed rice. In contrast, maida, ravva, atta, and bran are specifically listed under the State Act.

The court also considered the decision in State of Andhra Pradesh v. Vayugundla Venkata Subbaiah & Sons, which treated ravva as "rice" based on the Supreme Court's reasoning. However, the court found this inapplicable as the current case involves distinct entries for wheat by-products.

Additionally, the court referred to Udata Narasimha Rao and Co. v. State of Andhra Pradesh, which concluded that ravva from wheat or rice and fried gram dhall are not declared goods under section 14 of the Central Sales Tax Act. The court agreed with this reasoning.

Lastly, the court examined Dhanbad Flour Mills v. State of Bihar, where the Patna High Court treated atta, maida, and sujji as "wheat." However, the court reiterated that the specific entries in the Andhra Pradesh Act justify treating these products separately for taxation purposes.

Conclusion:

The court held that the levy of sales tax under section 5 of the Andhra Pradesh General Sales Tax Act, 1957, on maida, ravva, atta, sujji, and bran is legal. The writ petition was dismissed, and no costs were awarded. An oral request for leave to appeal to the Supreme Court was refused, as no substantial question of law of general importance was found.

Writ petition dismissed.

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