TMI Blog1967 (3) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... erein) are dealers in rice and in respect of inter-State trade in that commodity, they had been assessed by the Sales Tax Authorities at the rate of 2 nP. in the rupee while the petitioners (respondents) contended that they are liable to pay only at the rate of 1 nP. in the rupee. The controversy involves the interpretation of section 8 of the Central Sales Tax Act (74 of 1956) and section 5(2)(a) of the Andhra Pradesh General Sales Tax Act (6 of 1957) read with item 66(a) and (b) of the First Schedule to that Act. We give below the relevant provisions of the above sections: Section 8. (1) "Every dealer, who in the course of inter-State trade or commerce- (a) sells to the Government any goods; or (b) sells to a registered dealer other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be, shall be calculated at the lower rate. Explanation.-For the purposes of this sub-section a sale or purchase of goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that law it is exempt only in specified circumstances or under specified conditions or in relation to which the tax is levied at specified stages or otherwise than with reference to the turnover of the goods." Section 5. (1) "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. 10,000 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 two naye. paise on eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than 2 per cent. as specified in section 8(2-A), the rate at which rice is to be taxed is at 2 per cent. and not at 1 per cent. under item 66(b). This contention was rejected by the Tribunal. It may be observed that the rate of tax on paddy under item 8 of the Second Schedule is at 3 nP. in the rupee at the point of the first purchase and If rice had been obtained from paddy that had not suffered tax at the rate of 3 nP. in the rupee, it must be rice that has been either directly imported into the State and then sold in inter-State trade or rice that has been obtained from ryots from the selling of their own paddy and sold in inter-State trade, both of which transactions are rare. The question is what Is meant by the words "subject to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axed at different rates and with respect to each category the tax can be said to be generally at that rate. We cannot accept the contention of the learned Government Pleader that tax generally on rice is 4 per cent. and because that is not less than 2 per cent., sub-section (1)(b) of section 8 will apply. In Karnatak Coffee Co. v. Commercial Tax Officer[1962] 13 S.T.C. 658., the Mysore High Court was dealing with a provision in the proviso to section 8(1)(a) before its amendment which is similar to section 8(2-A) in its application to coffee and coffee powder which was ground from coffee seeds, which has already been subjected to sales tax under item 43. It was held that coffee powder was not liable to tax under the Act. Their Lordships ..... X X X X Extracts X X X X X X X X Extracts X X X X
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