1998 (1) TMI 499

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..... leaves are taxable at the point of sale by Corporation at 9 per cent. The petitioners have undertaken to pay the tax as per the provisions of the APGST Act. Accordingly, the Corporation has been demanding the payment of sales tax by the petitioners at 9 per cent by way of reimbursement of the tax payable by the Corporation to the department. The Corporation relied upon the circular issued by the Commissioner of Commercial Taxes in reference No. A1(3)/2312/96, dated October 18, 1996. The impugned portion of the circular issued by the Commissioner is as follows: Regarding point No. 5, I am to inform that G form cannot be accepted for sale of beedi leaves as widespread misuse is suspected. 2.. The legality and validity of this circular .....

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..... e buying dealers. Such misuse will obviously arise in case the buying dealers (petitioners) do not utilise the abnus leaves purchased from the Corporation in the manufacture of beedies. 5.. While the possibility of said misuse cannot be ruled out, there cannot be blanket ban on the acceptance of G forms from the petitioners which facilitated the Corporation and the petitioners in their turn to avail of concessional rate of tax. An omnibus mandate not to accept G forms cannot be countenanced in the light of the specific provision embodied in section 5-B of the APGST Act. The clarificatory letter of the Commissioner in so far as it denies that benefit to the sellers and purchasers of beedi leaves flies in the face of the statutory provi .....

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..... year should be furnished by the petitioners. If the declarations in form G are rejected by the Sales Tax Department either in the course of assessment of the Corporation or the petitioners, the bank guarantees can be encashed by the Corporation subject to the remedies open to the petitioners under law. The commercial tax authority concerned should furnish necessary information to the Corporation in regard to acceptance or otherwise of G forms. In case the petitioners have failed to furnish bank guarantees for the differential tax, the petitioners are liable to pay the tax at 9 per cent as per the demand made by the Corporation. Subject to the above directions, the writ petitions are allowed. No costs. Writ petitions allowed. - - .....

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