1994 (10) TMI 282 - HC - VAT and Sales Tax

Summary

Issues:
Exemption from sales tax on turnover of cotton seeds under Andhra Pradesh General Sales Tax Act, 1957 based on Government Order (G.O.) No. 604 dated April 9, 1981. Interpretation of conditions "certified" and "truthfully labelled" seeds for agricultural purposes. Dispute over eligibility for exemption leading to appeal before Sales Tax Appellate Tribunal.

Analysis:
The case involves a tax revision challenge against the Sales Tax Appellate Tribunal's order withdrawing exemption granted to the petitioner, a dealer in agricultural cotton seeds, under G.O. No. 604. The dispute arose when the Deputy Commissioner revoked the exemption on the grounds that the conditions of the G.O. were not fulfilled. The petitioner contended that the conditions of "certified" and "truthfully labelled" seeds were alternative, not cumulative, and had fulfilled the latter condition. Additionally, the petitioner relied on a memorandum issued by the Government to support their claim for exemption.

The G.O. No. 604 dated April 9, 1981, exempted sales or purchases of "certified" and "truthfully labelled" seeds for agricultural purposes under the Andhra Pradesh General Sales Tax Act. The Seeds Act, 1966, distinguishes between "certified" and "truthfully labelled" seeds, with certification being an optional requirement for selling seeds. A representation was made to the Government seeking clarification on the cumulative interpretation of the G.O., leading to the issuance of a memorandum confirming that both "certified" and "truthfully labelled" seeds are eligible for exemption.

The clarification from the Government clarified that both "certified seeds" and/or "truthfully labelled seeds" are exempt from tax under G.O. No. 604. Consequently, the petitioner was found to be entitled to the exemption under the G.O. The High Court set aside the order of the Sales Tax Appellate Tribunal, thereby allowing the tax revision case in favor of the petitioner. The judgment was delivered without costs, and the petition was allowed.