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TMI Blog1976 (8) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... , without expressing any opinion on the claim made by the petitioners. W.A. No. 61 of 1976 is against the order of Chennakesava Reddy, J., in W.P. No. 7516 of 1973. The petitioners sought a mandamus interdicting the appellants, viz., the sales tax authorities and the Government of Andhra Pradesh, from collecting any sales tax from their sales of powa, muramura and pelalu. The learned Judge gave a mandamus directing the respondent-appellants that they should tax these items in accordance with entry 66(a) or (b), as the case may be, of Schedule I depending on the condition that tax at the purchase point of paddy has already been paid or not under section 5(2)(b) of the Act. The reasoning of the learned Judge in coming to this conclusion is that these commodities are products of paddy obtained without undergoing any chemical processes. Therefore, no tax could be levied under section 5(1) of the Act thereby permitting multipoint tax. In the opinion of the learned Judge, these articles are Alladi Venkateswarlu and Others v. Government of A.P. and Another [1976] 37 S.T.C. 375. products of paddy and so fall under entry 66(b). If the paddy, out of which they were extracted had not been s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Ms.No. 2197. Thus, the exemption from tax that had been given under G.O.Ms.No. 2197 to parched rice, muramaralu, etc., was withdrawn with effect from 21st March, 1973. This latter G.O., issued under the order of the Government in G.O.Ms. No. 208 dated 21st March, 1973, is in response to the recommendation of the Board of Revenue. The argument of Sri Lakshminarayana in regard to the lack of power to impose tax on these commodities is twofold. The first of them is that almost all the foodstuffs are included in the schedules, but nowhere in any one of the schedules, these commodities are mentioned. Therefore, according to the Act they are not taxable. Consequently, to impose sales tax on these commodities there is no authority of law as required under article 265 of the Constitution. This argument ignores section 5 of the Act. According to it, every dealer (other than a casual trader and an agent of a non-resident dealer), whose total turnover for a year is not less than Rs. 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 five paise on every rupee of his turnover. Therefore, there is a general power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced on State of Kerala v. P. J. JosephA.I.R. 1958 S.C. 296., to contend that through executive power, a new law cannot be made and tax cannot be made assessable on new items. In the case before the Supreme Court, the Government made an endorsement on the reference made to it by the Board of Revenue that it accorded sanction for extra quota of foreign liquor being allowed to wholesale licensees in Cochin on payment by them of a commission at 20 per cent of the price of liquor. The Supreme Court found that this endorsement was not an order made by the State in exercise of the powers conferred on it by section 17 of the Cochin Abkari Act. Further, this order was not published in the Gazette nor was it communicated to the licensee from whom the excise authorities demanded the commission of 20 per cent on excess sales. In these circumstances, the court held that the endorsement was not a statutory order passed by the State in exercise of the power conferred on it by section 17. Therefore, the endorsement had no statutory status and, consequently, the collection of commission of 20 per cent was considered to be unauthorised and illegal. Such is not the case here. A regular notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealer in rupee. the State effecting the sale. Provided that a rebate of two paise in the rupee shall be allowed on the rice sold and consumed In the State In accordance with such rules as may be prescribed. (b) Rice obtained from paddy At the point of sale by the 1 paisa in the that has met tax under this first wholesale dealer in rupee." Act. the State effecting the sale. Reading entry 66, it is clear that it deals with only rice. While subitem (a) deals with rice, which is not covered by sub-item (b), sub-item (b) deals with rice obtained from paddy that has met tax under this Act. If the paddy out of which rice is obtained has not been subjected to tax, then the rice itself is subjected to tax at the rate of six paise in the rupee at the point of sale by the first wholesale dealer in the State. If, on the other hand, the paddy, out of which the rice has been obtained, was subjected to tax, then tax on such rice is leviable at the rate of one paisa in the rupee at the point of sale by the first wholesale dealer in the State. It is on this basis, our learned brother Chennakesava Reddy, J., came to the conclusion, that even these commodities like parched rice and puffed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in order to tax something. It is allowed to pick and choose districts, objects, persons, methods and even rates for taxation if it does so reasonably ...... The Supreme Court has been practical and has permitted a very wide latitude in classification for taxation." Applying this principle can it be said that there is a discrimination against these commodities as distinct from actual rice. It is not disputed and cannot be disputed that parched and puffed rice are different in several respects from rice as such, though all of them are made out of paddy. "Rice" is extracted by merely eliminating the husk from the paddy, while parched and puffed rice are made through following other processes. Though both rice as well as these commodities are food materials, the occasions and the manners of their usage also differ. While rice is the staple food of the people of this State, parched rice and puffed rice are not. They are more sparingly used only for snacks and other things. Thus, they are different from actual rice in several material respects. In the exercise of its power to pick and choose objects for taxation, the State have chosen to impose tax at the rate of one per cent on ric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to act only under section 9 of the Act, whereunder they had no power to cancel the exemption. It is true that section 15 of the A.P. General Clauses Act has not been specifically referred to in G.O. Ms. No. 208. But it is there by necessary implication. When they purported to exercise their power under section 9 in revoking the earlier order of exemption, the Government of Andhra Pradesh was clearly exercising its power under section 9 read with section 15 of the General Clauses Act. However, another contention is advanced by Sri Lakshminarayana saying that even supposing that section 15 confers power on the State Government to revoke the earlier order, the revocation must be done within the scope and ambit of the power under section 9 read with section 15 of the General Clauses Act. There is no doubt in this proposition. We fail to see how the revocation of the earlier exemption granted for these commodities from taxation is outside the scope of section 9 read with section 15. Earlier an exemption from taxation was given, which was clearly within the scope of section 9. Now, that exemption is completely and wholly withdrawn. It is not as if this revocation is applicable only to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them has any force. Sri Dasaratharama Reddi, appearing for the petitioner in W.P. No. 6909 of 1974, takes the stand that parched and purred rice are also rice within the meaning of entry 66(b). According to him, after all these commodities also are extracted from paddy like rice and, therefore, they are also one variety of rice which can be reasonably included in entry 66(a) or (b), according to the facts and circumstances of the case. The learned counsel relied on a Bench decision of this Court in Kayani Co. v. Commissioner of Sales Tax[1953] 4 S.T.C. 387. where the question was whether cooked rice is also rice. The exemption in that case was claimed under item 1, which read: "all cereals and pulses including all forms of rice (except when sold in sealed containers) of Schedule 1 of the Hyderabad General Sales Tax Act". Jaganmohan Reddy, J. (as he then was), speaking for the Bench, held that the word "rice" occurring in item 1 of the exempted articles cannot be interpreted as meaning cooked rice or biriyani or polao. This by itself is against the contention of the learned counsel. However, he relies on the following passage occurring at page 390: "The word 'form' connotes a vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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