1996 (7) TMI 549 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the successor assessing authority was justified in withdrawing the exemption and assessing the disputed turnover relating to alleged second sales of cement gunny bags.
2. Whether the petitioner was entitled to exemption on the disputed turnover as relating to second sales of cement gunny bags.

Analysis:
1. The three tax revision cases involved a common question of law regarding the successor assessing authority's withdrawal of exemption and assessment of disputed turnover related to alleged second sales of cement gunny bags for different assessment years. The Tribunal justified the reassessment under section 14(4)(cc) of the Andhra Pradesh General Sales Tax Act, 1957, due to the incorrect exemption granted in the original assessment. However, the High Court found that lack of fresh material to justify reassessment rendered the Tribunal's decision unjustified. The Court referred to previous judgments emphasizing the need for new material to reopen assessments, ultimately setting aside the Tribunal's order and allowing the revision cases for the first two assessment years.

2. In the case of T.R.C. No. 261 of 1988, the petitioner claimed exemption on the disputed turnover as second sales of cement gunny bags. The petitioner argued that the used nature of the bags indicated second sales, citing a Karnataka High Court judgment. The High Court examined precedents and established tests for claiming exemption on the ground of second sales, emphasizing the need for the first seller to be identifiable and for the goods to have been taxed in the first sale within the State. The Court found that the petitioner failed to prove these criteria, as there was no evidence of the bags being taxed in the first sale within the State or of identifiable first sellers. Consequently, the Court upheld the Tribunal's decision denying exemption in this case and dismissed T.R.C. No. 261 of 1988.

In conclusion, the High Court allowed T.R.C. Nos. 259 and 260 of 1988 while dismissing T.R.C. No. 261 of 1988, based on the lack of fresh material for reassessment in the first two cases and the failure to establish exemption criteria in the third case.