1965 (3) TMI 67 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the levy of sales tax on zarda under the Andhra Pradesh General Sales Tax Act is lawful.

The judgment by the Andhra Pradesh High Court, delivered by Justice Sharfuddin Ahmed, addressed the issue of the levy of sales tax on zarda, a type of chewing tobacco. The assessee, a partnership concern dealing in general goods, objected to the tax assessment on zarda for the year 1961-62. The Commercial Tax Officer, Assistant Commissioner of Commercial Taxes, and Sales Tax Appellate Tribunal upheld the tax levy. The court considered the dictionary meaning of zarda, which is a variety of chewing tobacco with a substantial tobacco content. The court analyzed the relevant provisions of the Andhra Pradesh General Sales Tax Act, including Schedule 5 and exemptions for tobacco and its products. The court highlighted that zarda falls within the exemption category as a tobacco product based on the Act's provisions and notifications exempting tobacco and its products from sales tax. The court rejected the Tribunal's interpretation that zarda must have suffered Central excise duty to be exempt from tax, emphasizing that zarda did not fall under the categories subjected to additional duty under the relevant excise acts. The court concluded that zarda is not liable for sales tax under the Act and allowed the revision in favor of the assessee.