1998 (2) TMI 549 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Interpretation of the exemption notification under the Andhra Pradesh General Sales Tax Act (APGST Act) and the Central Sales Tax Act (CST Act).
2. Validity of the show cause notices and provisional assessment orders issued by the Commercial Tax Officer.
3. Applicability of previous judgments in similar cases to the current case.

Issue-wise Detailed Analysis:

1. Interpretation of the Exemption Notification:
The core issue revolves around the interpretation of the notification G.O. Ms. No. 133 (Revenue), dated January 29, 1964, which exempts "the sales of all books and periodicals" from sales tax. The petitioners argued that this notification should cover all types of books, including those they sell, such as lottery tickets, share certificates, and other printed materials. They relied on previous judgments, specifically Govindaswamy Binding Works v. State of Andhra Pradesh [1972] 29 STC 219 (AP) and Venkatarama & Co. v. Additional Commercial Tax Officer [1973] 32 STC 263 (AP), which interpreted "all books" to include every kind or category of books, whether printed, written, or blank.

The Court reiterated the interpretation given in Govindaswamy Binding Works, emphasizing that the term "all books" should be understood in its broadest sense as per common parlance. The Court noted that the dictionary definitions of "all" and "books" support an inclusive interpretation, covering various forms of books, including those not necessarily containing literary works.

2. Validity of the Show Cause Notices and Provisional Assessment Orders:
The petitioners challenged the show cause notices and provisional assessment orders issued by the Commercial Tax Officer for the assessment years 1994-95 and 1995-96. They argued that these notices and orders were contrary to the exemption provided under G.O. Ms. No. 133 (Revenue), dated January 29, 1964, as interpreted by previous court decisions.

The Court found that the petitioners were supplying the materials in the form of books as per the orders placed by the purchasers, including various State Governments. The Court held that the stage at which the tax is leviable is relevant, and since the petitioners supplied the articles in book form at the first sale, they were entitled to the exemption. The Court rejected the Revenue's argument that the sale of articles in book form was a camouflage for evading tax, noting that the petitioners were compelled to sell the articles in book form.

3. Applicability of Previous Judgments:
The petitioners relied heavily on the judgments in Govindaswamy Binding Works and Venkatarama & Co., which had previously interpreted the exemption notification to include all types of books. The Advocate-General contended that these judgments required reconsideration, arguing that the interpretation placed by the learned Judges did not warrant such an inclusive interpretation.

The Court, however, saw no reason to disagree with the previous judgments. It emphasized that the interpretation of "all books" as including various forms of books, even those not containing literary works, was consistent with the common parlance understanding and the intent of the notification. The Court rejected the Advocate-General's argument for reconsideration and upheld the previous judgments, thereby quashing the show cause notices and provisional assessment orders.

Conclusion:
The Court allowed the writ petitions, quashing the show cause notices and provisional assessment orders. It upheld the broad interpretation of the exemption notification under the APGST Act and CST Act, as established in previous judgments, and awarded costs and advocate's fees to the petitioners.