2004 (11) TMI 536 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to G.O. Ms. No. 183, Revenue (CT-II), dated March 6, 1999 on grounds of unreasonableness, discrimination, and arbitrariness.

Detailed Analysis:
The petitioner, a registered dealer engaged in the manufacturing and sale of beedies, challenged G.O. Ms. No. 183, which excluded beedi leaves from the concessional tax rate list. The petitioner argued that the Government exceeded its power under section 5-B(1)(b) of the Andhra Pradesh General Sales Tax Act, 1957, by making raw materials ineligible for concessional tax rates. The petitioner contended that section 5-B(1) allows concessional rates for goods used as raw materials and that the Government cannot exclude eligible goods from the list. The petitioner also claimed discrimination as other dealers continued to benefit from concessional rates, except beedi leaf dealers.

The Court analyzed section 5-B(1) of the Act, which provides for concessional tax rates under specific circumstances. It observed that the Government has the authority to notify goods eligible for concessional rates under clause (a) and goods not eligible under clause (b). The Court emphasized that the Government's power to notify goods not eligible for concessional rates is crucial. By interpreting the Act as a whole, the Court concluded that the concessional rates apply to goods notified by the Government, and the exclusion of certain goods is permissible. The Court rejected the petitioner's arguments, finding no merit in the challenge to G.O. Ms. No. 183.

The respondents cited relevant judgments to support their position. In Vrajlal Manilal & Co. v. State of Madhya Pradesh, the Supreme Court upheld an amendment to a proviso challenged for discrimination. Although not directly applicable, this judgment was deemed relevant to address the discrimination argument. In Roxy Roller Flour Pvt. Limited v. Government of Andhra Pradesh, it was established that the power to grant exemptions includes the power to rescind, and principles of natural justice do not apply to legislative functions. These judgments further supported the respondents' stance.

Ultimately, the Court dismissed the writ petition, finding it devoid of merit and imposing no costs. Additionally, several similar writ petitions were dismissed in alignment with the judgment in a specific case. The Court's decision upheld the validity of G.O. Ms. No. 183 and rejected the challenge brought against it.