2004 (6) TMI 596 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of section 5-G of the A.P. General Sales Tax Act, 1957 and rule 6-B of the Andhra Pradesh General Sales Tax Rules.
2. Application of the amendment reducing the composition rate from 4% to 2% under section 5-G.
3. Dispute regarding the timing of exercising the option for composition of tax payment.

Analysis:
1. The petitioner, a registered dealer under the A.P. General Sales Tax Act, 1957, failed to exercise the option of composition of tax payment at the rate of 4% under section 5-G within the stipulated time as per rule 6-B of the Rules. The petitioner paid tax at the normal rate of 6% and later sought to benefit from an amendment reducing the composition rate to 2%. The court noted that the petitioner did not comply with the rule's requirement to apply within 30 days from the commencement of business or financial year, leading to the rejection of the application by the competent authority.

2. The petitioner argued that the amendment in August 1996 reducing the composition rate to 2% affected his ability to exercise the option within the specified timeframe. However, the court emphasized that the amendment only reduced the tax rate and did not introduce a new right for dealers. The court held that the petitioner's failure to apply within the required period under rule 6 of the Rules precluded him from availing the reduced rate. The court rejected the petitioner's contention that the Rules should not deprive dealers of statutory benefits, emphasizing the importance of timely compliance with procedural requirements.

3. The court rejected the petitioner's claim that the Rules should not override statutory benefits, emphasizing that the amendment merely reduced the tax rate without creating new rights for dealers. The court highlighted the necessity of adhering to the prescribed application timeline under rule 6, which the petitioner failed to meet. Consequently, the court dismissed the writ petition, finding no merit in the petitioner's arguments and upholding the rejection of the application by the competent authority. No costs were awarded in the matter, and the petition was dismissed.