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TMI Blog1978 (2) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... ------------------------------- The judgment of the Court was delivered by BEG, C.J.- The question before us in these appeals by special leave was framed as follows: Whether 'atukulu (parched rice) and 'muramaralu' (puffed rice) are 'rice' within the meaning of entry 66(b) of Schedule I to the Andhra Pradesh General Sales Tax Act, 1957. The question arose before the Andhra Pradesh High Court in appeals from single Judge decisions of the High Court, out of provisions of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as the Act ). Section 5(1) of the Act provides: 5. Levy of tax on sales or Purchases of goods.-(1) Every dealer (other than a casual trader and an agent of a non-resident dealer) whose total turn- over for a year is not less than ₹ 25,000 and every agent of a non-resident dealer whatever be his turnover for the year, shall pay a tax for each year at the rate of four paise on every rupee of his turnover. Section 5(2) enacts: Notwithstanding anything contained in sub-section (1), the tax under this Act shall be levied- (a) in the case of the goods mentioned in the First Schedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. These are only processes of converting rice grain into a different form of it by heating or parching. If such rice is still rice, even if we confine the term rice to grain, is it by going through these processes of heating or parching converted into separate items for the purposes of entry 66 in the First Schedule of the Act. We find that considerable argument was advanced in the High Court on the question whether if parched rice and puffed rice are not covered at all by entry 66 of the First Schedule it would still be taxable. We find that the answer given by the High Court was that, in any case, such rice would be taxable under section 5, sub-section (1), of the Act set out above. It was also pointed out before us that paddy out of which the products in question become available, had already been taxed, as admitted by both sides, under item 8 of the Second Schedule, which imposes a tax of 5 paise in the rupee on paddy at the point of first purchase in the State. The entry also says: Provided that a rebate of 2 paise in the rupee shall be allowed on the paddy purchased and consumed in the State in accordance with such rules as may be prescribed. The Second Sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... virtually the same product in different forms over and over again. Such a result would be contrary to basic axioms of taxation. Unless the language of the taxing statute was absolutely clear, it should not be given an obviously unfair interpretation against the assessee. It may be that an item may be taxed once as raw material and, after it is manufactured and converted into separately taxable goods, taxed again as another taxable item altogether. But, in such cases, the identity of the goods sold would be deemed to be different even though the raw materials may have been taxed already in a different form earlier. The question, therefore, before us is whether rice , which is obtained from paddy, already taxed under item 8 of the Second Schedule, ceases to be rice falling prima facie under item 66(b) as rice on which a tax was already paid when it was in the form of paddy. Does heating or parching only to make it edible have that effect. It is clear that there is a distinction between paddy as found in item 8 of the Second Schedule, and rice , as mentioned under item 66 of the First Schedule. Apparently, the removal of the huck makes this difference. It is true that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a substantially different identity. It was only converted from unedible grain into an edible form by parching or puffing through a heating process. Even if parched rice and puffed rice could be looked upon as separate in commercial character from rice as grain offered for sale in a market, yet, keeping in view the other matters mentioned above, it could not be presumed that it was intended to exclude from entry 66 rice , which at any rate, had not so changed its identity as not to be describable as rice at all. Muramaralu was after all rice even though it was puffed. Atukulu even though parched was still called rice. We must also remember that the schedule which we have to interpret is in the English language where the term rice is still found in the rendering or description of pelalu as well as that of muramaralu in the English language. And, in any case, if two interpretations of a provision are passible, we think that we ought to, in such a case, apply the principle that the interpretation which favours the assessee should be preferred. It was possible for the Government to lay down a separate category for parched rice and puffed rice, but it has not done so. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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