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2008 (7) TMI 873 - HC - VAT and Sales TaxExemption denied - turnover relating to bones, bone sinews and bone meal was brought to tax under section 6A of the Andhra Pradesh General Sales Tax Act, 1957 on the ground that the aforesaid commodities, including crushed bones, were different from raw bones and that such purchases made from unregistered dealers were liable to tax - Held that - On the application the doctrine of merger, the judgment of the Supreme Court in A.A. Sulaiman 1997 (3) TMI 494 - SUPREME COURT OF INDIA approving the reasoning of the Madras High Court, in Subbaraj and Co. 1980 (9) TMI 253 - MADRAS HIGH COURT would bind this court and it must be held that Raw bones are neither consumed nor is any process of manufacture involved in conversion of raw bones into crushed bones, bone meal, bone sinews, horns and hooves. Consequently purchase tax, under section 6A of the APGST Act, cannot be levied on the purchase of raw bones by the assessee. In favour of assessee.
Issues Involved:
1. Taxability of bone meal, bone sinews, and crushed bones under section 6A of the APGST Act. 2. Applicability of the Supreme Court's judgment in A.A. Sulaiman to the case. 3. Impact of the concession made by the counsel for the revision petitioner before the Tribunal. Detailed Analysis: 1. Taxability of Bone Meal, Bone Sinews, and Crushed Bones under Section 6A of the APGST Act: The petitioner, a dealer in bone meal, was assessed by the Commercial Tax Officer, who granted exemption on a turnover of Rs. 26,06,922.95 but later revised by the Deputy Commissioner, bringing the turnover related to bones, bone sinews, and bone meal under tax. The Tribunal upheld the tax imposition, citing that these commodities were independent and different from raw bones, thus taxable under section 6A of the APGST Act. The Tribunal observed that the petitioner purchased raw bones from unregistered dealers and processed them into bone meal, bone sinews, crushed bones, and horns and hooves, which were different products from raw bones. Consequently, the purchase value of raw bones was exigible to tax under section 6A of the Act. 2. Applicability of the Supreme Court's Judgment in A.A. Sulaiman: The petitioner argued that the judgment in P. Subba Raju & Company was no longer good law following the Supreme Court's ruling in A.A. Sulaiman, which held that converting dry bones into bone meal did not attract purchase tax under a similar provision of the Kerala General Sales Tax Act. The Supreme Court's dismissal of the special leave petition against the Madras High Court's judgment in Subbaraj and Co. supported this view. The court noted that section 5A of the Kerala General Sales Tax Act, section 7A of the Tamil Nadu General Sales Tax Act, and section 6A of the APGST Act all relate to the levy of purchase tax on goods consumed in the manufacture of other goods. The Supreme Court's affirmation of the Madras High Court's reasoning in Subbaraj and Co. meant that raw bones converted into bone meal, bone sinews, etc., were not consumed in a manufacturing process and thus not taxable under section 6A of the APGST Act. 3. Impact of the Concession Made by the Counsel for the Revision Petitioner: The Tribunal noted that the counsel for the petitioner had conceded that the appeal regarding the purchase of raw bones converted into bone meal and bone sinews was not being pressed, based on the judgment in P. Subba Raju & Company. However, the court held that this concession did not preclude the petitioner from challenging the decision, especially in light of the Supreme Court's subsequent judgment in A.A. Sulaiman. The court emphasized that a concession by counsel on a point of law does not bind the client and cannot constitute a binding precedent. Therefore, the petitioner's contention that the earlier Division Bench judgment was no longer good law was valid. Conclusion: The court allowed the Tax Revision Case (T.R.C.), setting aside the order of the Sales Tax Appellate Tribunal and the revisional order of the Deputy Commissioner. The court held that raw bones converted into bone meal, bone sinews, crushed bones, horns, and hooves were not consumed in a manufacturing process and thus not taxable under section 6A of the APGST Act. The judgment of the Supreme Court in A.A. Sulaiman, which affirmed the reasoning of the Madras High Court in Subbaraj and Co., was binding and necessitated following this view over the earlier judgment in P. Subba Raju & Company.
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