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2008 (7) TMI 891 - HC - VAT and Sales TaxWhether the Tribunal was right in holding that blended cotton yarn is not cotton yarn and is therefore covered by entry No. 165 of the First Schedule and not entry 10 of the Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957? Held that - After introduction of entry 165 of the First Schedule, the goods in question would fall under entry 165 alone and not under entry 10 of the Third Schedule. The contention of Sri S. Ravi, learned counsel for the petitioner, that, if entry 165 was read as excluding cotton yarn with even a minuscule extent of non-cellulosic fibre content, then entry 10 of the Third Schedule would become otiose is only to be noted as rejected, for if the said contention is to be accepted, it would then render entry 165 of the First Schedule to the APGST Act otiose. Section 22(1) of the APGST Act enables a dealer or the authority to prefer a revision to the High Court on the ground that the Appellate Tribunal has either decided erroneously, or failed to decide, any question of law. The vires of entries in the Schedule to the Act, cannot be examined in revision proceedings, under section 22 of the APGST Act. We see no reason, therefore, to interfere with the order under revision. The tax revision cases fail and are, accordingly, dismissed.
Issues:
1. Interpretation of entry 165 of the First Schedule and entry 10 of the Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957. 2. Classification of blended cotton yarn for taxation purposes. 3. Applicability of Central Sales Tax Act, 1956 to the classification of cotton yarn. 4. Scope of revision proceedings under section 22 of the APGST Act. Issue 1: Interpretation of Sales Tax Act Schedules The main issue in this case was the interpretation of entry 165 of the First Schedule and entry 10 of the Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957. The question before the court was whether blended cotton yarn should be classified under entry 165 or entry 10 for taxation purposes. The petitioner argued that even if cotton yarn was blended with non-cellulosic fiber content, it should still be considered cotton yarn and taxed at four percent under entry 10. The court referred to previous judgments and held that after the introduction of entry 165, blended cotton yarn falls under entry 165 alone, not under entry 10. Issue 2: Classification of Blended Cotton Yarn The court considered the contention that blended cotton yarn, even with a small percentage of non-cellulosic fiber, should be taxed differently. The State Legislature had made a clear distinction between cotton yarn under entry 10, taxed at four percent, and blended cotton yarn under entry 165, taxed at eight percent. The court agreed with the previous Division Bench's opinion that after the introduction of entry 165, the blended cotton yarn should be classified under entry 165 only. Issue 3: Applicability of Central Sales Tax Act The court discussed the applicability of the Central Sales Tax Act, 1956 to the classification of cotton yarn. Section 14 of the Act declares certain goods as of special importance in inter-State trade, including cotton yarn. The court highlighted that Section 15 places restrictions and conditions on the tax on declared goods within a state, ensuring that the tax does not exceed four percent. The court emphasized that the vires of entries in the Schedule cannot be examined in revision proceedings under section 22 of the APGST Act. Issue 4: Scope of Revision Proceedings The court clarified the scope of revision proceedings under section 22 of the APGST Act. It stated that the High Court can only interfere if the Appellate Tribunal has decided erroneously or failed to decide a question of law. The court emphasized that without a specific challenge to the vires of a provision, courts would not adjudicate on such questions. Consequently, the court dismissed the tax revision cases as the vires of entries in the Schedule could not be examined in revision proceedings. In conclusion, the judgment clarified the classification of blended cotton yarn for taxation purposes under the Andhra Pradesh General Sales Tax Act, emphasizing the importance of statutory interpretation and the limitations of revision proceedings.
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