2001 (9) TMI 1095 - HC - VAT and Sales Tax

Summary

Issues:
- Discriminative tax rates on wheat products under the Andhra Pradesh General Sales Tax Act for the assessment years 1993-94 and 1994-95.

Analysis:
1. Background and Assessment Proposal:
The petitioner, a wheat roller flour mill operator, was assessed under the Andhra Pradesh General Sales Tax Act for the assessment year 1993-94. The assessing officer proposed differential tax rates on wheat products like atta, ravva, and maida based on the source of wheat - whether imported or locally purchased. The petitioner objected to this differentiation, citing discriminatory practices.

2. Legal Challenge and Relief Sought:
The petitioner filed a writ petition challenging the discriminatory tax rates, seeking a writ of mandamus to declare the differential rates as violative of the Constitution of India. The petitioner requested a uniform tax rate of 1 per cent on the sales of wheat products and a refund of excess tax collected for the assessment years in question.

3. Judicial Interpretation and Precedents:
The petitioner's counsel relied on judgments from the Supreme Court and the High Court, emphasizing the discriminatory nature of the tax classification based on whether the raw material had suffered tax or not. The court considered the precedent set by the apex court in similar cases, where discriminatory tax practices were deemed unconstitutional.

4. Court's Decision and Rationale:
In line with previous judgments and constitutional provisions, the court declared the differential tax rates on wheat products as illegal, ultra vires, and violative of articles 14 and 301 to 304 of the Constitution of India. The court directed the respondents to levy tax on the sales of wheat products as per the applicable clause in the First Schedule of the Act, thereby ensuring uniformity in tax treatment for the petitioner.

5. Conclusion:
The writ petition was disposed of accordingly, with the court ordering the reassessment of tax for the relevant assessment years to align with the prescribed clause in the First Schedule of the Andhra Pradesh General Sales Tax Act. The judgment emphasized the importance of non-discriminatory tax practices in line with constitutional provisions and established legal precedents.