1970 (1) TMI 74 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether "green ginger" qualifies as a vegetable exempt from tax.
2. Whether the firm is entitled to claim a refund of tax paid by its commission agents.
3. Whether the Tribunal's order under Rule 50 of the Andhra Pradesh General Sales Tax Rules was merely rectification or dealt with the merits of the case.

Issue-wise Detailed Analysis:

1. Whether "green ginger" qualifies as a vegetable exempt from tax:
The firm claimed that "green ginger" is a vegetable and thus exempt from tax under G.O. Ms. No. 1091 Revenue dated 10th June, 1957. The assessing authority and the Assistant Commissioner of Commercial Taxes both rejected this claim. However, the Sales Tax Appellate Tribunal found that "green ginger" is indeed a vegetable and exempted from tax, setting aside the assessments on the disputed turnover and directing the assessing authority to revise the taxable turnover accordingly. The Government did not dispute the Tribunal's finding that "green ginger" is a vegetable.

2. Whether the firm is entitled to claim a refund of tax paid by its commission agents:
The firm sought a refund of the tax paid by its commission agents on the sales of "green ginger." The Tribunal clarified that the assessments in question only pertained to the sales conducted directly by the firm, not by the commission agents. The firm argued that under Section 11 of the Andhra Pradesh General Sales Tax Act, 1957, the principal should be able to claim a refund of tax paid by the agents. However, the court held that the primary responsibility for tax payment lies with the agent, not the principal. The court emphasized that the agent is considered a "dealer" under the Act and is primarily responsible for tax payment. Since the agents did not appeal their assessments, which had become final, the principal could not claim a refund of the tax paid by the agents in its own assessments.

3. Whether the Tribunal's order under Rule 50 of the Andhra Pradesh General Sales Tax Rules was merely rectification or dealt with the merits of the case:
The firm contended that the Tribunal exceeded its authority under Rule 50, which allows only for the rectification of clerical or arithmetical mistakes. The court found that the Tribunal did not deal with the merits of the case but merely clarified that the assessments pertained only to the firm's direct sales. The Tribunal's order was deemed to be within the scope of Rule 50, as it clarified the figures of the disputed turnovers without addressing the merits of the case.

Conclusion:
The court concluded that the firm could not claim a refund of the tax paid by its commission agents, especially since the agents' assessments had become final and were not appealed. The primary responsibility for tax payment lies with the agent under the Andhra Pradesh General Sales Tax Act, 1957. The Tribunal's order under Rule 50 was found to be a valid rectification and not an examination of the case's merits. Consequently, all tax revision cases were dismissed with costs.