TMI Blog1983 (1) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... ent years concerned herein are 1972-74 to 1975-76. We are concerned with the position obtaining prior to the introduction of section 6-A in the A.P.G.S.T. Act by Amendment Act 49 of 1976 with effect from 1st September, 1976. The Statement of Objects and Reasons appended to Act 12 of 1971, which substituted the words "last sale" for the words "first sale", states the object of substitution to be to benefit the weavers, master-weavers, master-weavers' co-operative societies or other recognised associations of weavers. The following paragraph brings out the object of the amendment: "Under the Andhra Pradesh General Sales Tax Act cotton yarn is liable to tax at 2 paise in the rupee at the point of first sale in the State. With a view to enc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns that a dealer, who effects a sale cannot be expected to follow up and find out whether his purchaser has consumed the cotton yarn himself or has consigned it or has exported it out of the State. He submits that the proper way of understanding and working the said entry would be to hold that a dealer is liable to pay tax on the sale of cotton yarn, only where he sells to an unregistered dealer within the State or to a dealer from outside the State within the State. In other words, he says that wherever a sale has been effected in favour of a registered dealer within the State, it should be held that the sale is not taxable. There is certainly a good amount of justification in the criticism levelled by Mr. Dasaratharama Reddi. An illustr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns together and of the combined stock, he may sell some bales within the State, export some bales of cotton yarn outside the State and may retain some other bales. In such a situation it would be difficult-nay, well-nigh impossible, for anybody to say whether the particular bales sold by A were sold within the State or exported or retained. These are the various likely difficulties arising from the said entry as it now stands. It is a matter for the legislature to consider and rectify. Mr. J.V. Suryanarayana, the learned Government Pleader, submits that much of the difficulty is solved by the introduction of section 6-A. He submits that the department may well prescribe a particular declaration, which should be furnished by the purchaser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted, unless the department can establish that the cotton yarn sold by the assessee has been either consumed by the purchasers or consigned or exported outside the State. Unless the department can so establish, the claim of the assessee cannot be negatived. It is open to the department to adopt one of the two following courses, namely, (1) it can grant exemption in the first instance and if and when it can establish that the sale effected by the assessee is the last sale, it can revoke the exemption and claim the tax due under section 14(4) of the Act, (2) the department may choose to keep the assessment pending until it can gather the necessary information to establish that the sale effected by the assessee is the last sale and then finalis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the taxable event is the last purchase in the State during the assessment year, it must be held that in respect of the stocks held at the close of the assessment year, the assessee must be held to be the last purchaser. This argument was rejected by the Supreme Court in the following words: "It is true that sections 3 and 4 speak of 'a year', i.e., the financial year, and it is only the turnover during that year that is liable to taxation in the hands of the assessee, but section 4 has to be read with the Second Schedule, and reading section 4 with the Second Schedule, it seems to us clear that a dealer is not liable to pay a tax on the purchases until the purchases acquire the quality of being the last purchases inside the State. In oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uently as escaped turnover.' In our opinion, in this illustration, the assessee would be liable in the financial year 1960-61 as the purchases became the last purchases in that year. " It is on the basis of the last para in the above extract, that Mr. Dasaratharama Reddi contends that on the same parity of reasoning, the sale must be deemed to have taken place in the assessment year 1981-82 in the illustration given hereinbefore. We are unable to appreciate this contention. The goods in the case before the Supreme Court were taxable at the last point of purchase. Whether a purchase made by him constitutes last purchase or not is a matter within the knowledge of and within the volition of the dealer unlike the case where the tax is lev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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