1998 (3) TMI 634 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether old and discarded newspapers sold by the appellant attract tax u/s A.P. General Sales Tax Act, 1957.
2. Whether the revisional order passed by the Commissioner was within the limitation period prescribed u/s 20(1) of the A.P.G.S.T. Act.
3. Whether the Commissioner's order regarding the turnover of waste paper and materials was violative of principles of natural justice.

Summary:

1. Taxability of Old and Discarded Newspapers:
The primary issue addressed by the Full Bench was whether old and discarded newspapers sold by a newspaper publisher attract tax u/s A.P. General Sales Tax Act, 1957. The court noted conflicting decisions from the Supreme Court: the Indian Express case [1987] 67 STC 474, which held that old newspapers lose their character as newspapers and are taxable, and the Sait Rikhaji case [1992] 85 STC 1, which held that old newspapers are still newspapers and exempt from tax. The Full Bench preferred the Indian Express case, stating that old newspapers sold for purposes other than reading lose their character as newspapers and thus attract tax. The court emphasized that the decision in Sait Rikhaji was based on a mistaken impression and did not correctly interpret the earlier decision in the AIR case [1988] 70 STC 349.

2. Limitation Period for Revisional Order:
The court addressed whether the revisional order passed by the Commissioner was within the limitation period prescribed u/s 20(1) of the A.P.G.S.T. Act. The impugned order, dated November 20, 1995, was served on the appellant on August 3, 1996. The court found an unexplained delay of over eight months between the purported date of the order and its service. Citing the Supreme Court's decision in State of Andhra Pradesh v. M. Ramakishtaiah & Co. [1994] 93 STC 406, the court presumed that the order was not passed on the date it purportedly was, and thus, the revision was beyond the prescribed limitation period.

3. Principles of Natural Justice:
The court also examined whether the Commissioner's order regarding the turnover of waste paper and materials violated principles of natural justice. The Commissioner had set aside the relief granted by the appellate authority concerning the turnover of waste paper and materials without including this issue in the show cause notice. The court found this action to be violative of principles of natural justice and therefore illegal.

Conclusion:
The appeal was allowed on the grounds of limitation and violation of natural justice, despite the court ruling against the appellant on the primary issue of taxability of old newspapers. The court set aside the impugned order of revision passed by the Commissioner of Commercial Taxes.