1993 (2) TMI 294 - HC - VAT and Sales Tax

Summary

Issues:
1. Tax classification of muddagur under Andhra Pradesh General Sales Tax Act, 1957 as jaggery or molasses.

Analysis:
The judgment of the Andhra Pradesh High Court, delivered by J. Eswara Prasad, J., dealt with two revision cases concerning the tax classification of muddagur under the Andhra Pradesh General Sales Tax Act, 1957. The primary question was whether muddagur should be taxed as jaggery at 0.07 paise under Schedule V or as molasses at 25% under Schedule I of the Act. In both cases, the lower authorities had classified muddagur as molasses, leading to appeals and subsequent revisions before the Court.

In the first case (T.R.C. No. 3 of 1986), the Assistant Commissioner had initially ruled in favor of taxing muddagur as jaggery, but the Deputy Commissioner, Commercial Taxes, in revision, held that it should be taxed as molasses. This decision was upheld by the Tribunal, prompting the revision case. Similarly, in the second case (T.R.C. No. 2 of 1986), all lower authorities had classified muddagur as molasses, and the Tribunal's rejection of the appeal led to the revision case.

The petitioners, manufacturers of khandasari sugar, argued that the process of converting muddagur involved distinct steps resulting in lump jaggery, which they contended should be taxed differently from molasses. However, the Deputy Commissioner and the Tribunal found that muddagur was essentially molasses in solid form after the treatment with sanjeera, thus justifying its classification as molasses for taxation purposes.

The Court referenced a previous judgment in T.R.C. No. 18 of 1980, where it was established that muddagur is akin to molasses in solid form and not jaggery. The petitioners' plea for reconsideration of this decision was rejected, emphasizing the principle of stare decisis. Furthermore, the Court disagreed with the argument that muddagur and molasses serve different purposes, highlighting that muddagur, despite being solid, is suitable for alcohol production and cattle fodder, not human consumption, aligning it more with molasses than jaggery.

In conclusion, the Court found no merit in the revision cases and dismissed them, upholding the classification of muddagur as molasses for taxation purposes. The petitioners' contentions were refuted, and the decisions of the lower authorities and the Tribunal were upheld.