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2004 (10) TMI 561 - HC - VAT and Sales Tax
Issues: Interpretation of G.O. Ms. No. 774 dated 9th July, 1985 regarding set-off entitlement for different types of scrap under the Andhra Pradesh General Sales Tax Act, 1957.
In this case, the appellant, a dealer in mild steel products, claimed entitlement to set-off under G.O. Ms. No. 774 dated 9th July, 1985, for all types of scrap, while the authorities contended that the set-off was only available for specific types of scrap like steel ingots or billets. The key contention revolved around the interpretation of the G.O. and its relation to item 2 of the Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957. The G.O. provided for a reduction in tax levied on rerolled finished products manufactured from steel ingots, billets, or rerollable scrap. However, the Third Schedule did not explicitly mention "rerollable scrap," leading to ambiguity in the interpretation. The High Court analyzed the G.O. and the Third Schedule entries, noting that while the G.O. specified rerollable scrap, no such explicit entry existed in item 2 of the Third Schedule. The Court reasoned that if rerollable scrap was not taxed at any stage as per the department's contention, then no set-off would be applicable. Considering the ambiguity in the G.O., the Court interpreted that all scrap mentioned in item 2 should be covered by G.O. Ms. No. 774. The Court emphasized that set-off entitlement required the taxed item to have suffered tax, which would not be the case for rerollable scrap if the department's interpretation was accepted. Consequently, the High Court allowed the special appeal, setting aside the Commissioner's order and holding that all types of scrap mentioned in item 2 were entitled to benefit under G.O. Ms. No. 774 dated 9th July, 1985. The Court restored the order of the Appellate Deputy Commissioner based on this interpretation. The Court refrained from addressing the limitation issue, keeping it open due to the findings on the G.O.'s applicability. Ultimately, the special appeal was allowed with no order as to costs.
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