1994 (10) TMI 275 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the exemption granted by the State Government under section 9(1) of the Andhra Pradesh General Sales Tax Act qualifies for exemption under section 8(2-A) of the Central Sales Tax Act.

Issue-wise Detailed Analysis:

1. Exemption under Section 9(1) of the State Act and Section 8(2-A) of the Central Act:
The primary issue revolves around whether the exemption granted by the State Government under section 9(1) of the Andhra Pradesh General Sales Tax Act (State Act) qualifies for exemption under section 8(2-A) of the Central Sales Tax Act (Central Act). The petitioner, a registered dealer in seeds, claimed exemption on the turnover of seeds as inter-State sales under the Central Act. The assessing authority denied this exemption, and subsequent appeals to the Appellate Deputy Commissioner and the Sales Tax Appellate Tribunal were unsuccessful, leading to this revision case.

2. Interpretation of G.O. Ms. No. 604:
The petitioner argued that the requirements of G.O. Ms. No. 604, Rev.(S), dated April 9, 1981, which exempts the turnover of seeds under the State Act, are not cumulative. The petitioner contended that satisfying either of the requirements should suffice for exemption and that the exemption granted under this G.O. is general, thus qualifying under section 8(2-A) of the Central Act. Conversely, the Government Pleader argued that the exemption requires seeds to be "certified and truthfully labelled" and used "for agricultural purposes," making these conditions specific and not general exemptions under section 8(2-A) of the Central Act.

3. Legal Provisions and Definitions:
Section 9 of the State Act empowers the State Government to grant exemptions or reductions in tax on the sale or purchase of specified classes of goods or by specified classes of persons. Section 8(2-A) of the Central Act states that if the turnover of goods is exempt from tax generally under the State law, it shall also be exempt under the Central Act. The explanation to section 8(2-A) clarifies that exemptions under specified circumstances or conditions do not qualify as general exemptions.

4. Analysis of G.O. Ms. No. 604:
The court examined G.O. Ms. No. 604, which exempts "sales or purchases of all varieties of certified and truthfully labelled seeds for agricultural purposes" from tax under the State Act. The court noted that the terms "certified" and "truthfully labelled" are derived from the Seeds Act, 1966, which regulates the quality of seeds for agricultural purposes. The Seeds Act mandates truthfully labelling containers of seeds and provides an optional certification process.

5. Interpretation of "for Agricultural Purposes":
The court concluded that the requirement for seeds to be "certified and truthfully labelled" is indicative of the type of goods exempted and does not specify any condition or circumstance under which the exemption is granted. The phrase "for agricultural purposes" qualifies the term "seeds" but does not impose a specific condition or circumstance for the exemption. Thus, the exemption under G.O. Ms. No. 604 is considered a general exemption.

6. Relevant Case Law:
The court referred to the Supreme Court judgment in Indian Aluminium Cables Ltd. v. State of Haryana, where it was held that exemptions granted under specified conditions do not qualify as general exemptions under section 8(2-A) of the Central Act. However, the court distinguished this case by explaining that the conditions in G.O. Ms. No. 604 relate to the identification of the goods and not to the conditions of sale.

7. Conclusion:
The court concluded that the requirements in G.O. Ms. No. 604, i.e., seeds being "certified and truthfully labelled," are not cumulative, and either category qualifies for exemption. The exemption granted under G.O. Ms. No. 604 is a general exemption and qualifies for exemption under section 8(2-A) of the Central Act. Consequently, the order under revision was set aside, and the tax revision case was allowed without costs.

Final Judgment:
The tax revision case is allowed, and the order under revision is set aside. The petitioner is entitled to the exemption under section 8(2-A) of the Central Sales Tax Act. Petition allowed.