1972 (7) TMI 102 - HC - VAT and Sales Tax

Issues Involved
1. Whether the term "miller" in item 3-C of Schedule IV of the Andhra Pradesh General Sales Tax Act, 1957, includes a decorticating miller.
2. Validity of the tax levied on the turnover of Rs. 4,35,214.32.
3. Validity of the tax levied on the turnover of Rs. 97,200.51.

Detailed Analysis

1. Whether the term "miller" in item 3-C of Schedule IV of the Andhra Pradesh General Sales Tax Act, 1957, includes a decorticating miller.
The primary issue in this case is the interpretation of the term "miller" in item 3-C of Schedule IV of the Andhra Pradesh General Sales Tax Act, 1957. The petitioner contended that as a decorticator, who merely separates the kernel from the shell, he does not come within the meaning of the term "miller." The court examined previous decisions, including Aswathanarayana v. Deputy Commercial Tax Officer [1964] 15 S.T.C. 795, which held that the term "miller" includes both decorticating millers and oil millers. This interpretation was supported by the legislative history and subsequent amendments.

The court also considered State of Andhra Pradesh v. Lakshmi Oil Mills [1967] 20 S.T.C. 489, which clarified that "a miller" means the first miller who purchases groundnuts and is liable to tax, irrespective of whether he crushes the groundnut into oil or not. The decision in Madar Khan & Co. v. Assistant Commissioner (Commercial Taxes) [1971] 27 S.T.C. 18, which took a contrary view, was found to be inconsistent with the Supreme Court's ruling in Sri Venkateswara etc. Oil Mill v. State of Andhra Pradesh [1971] 28 S.T.C. 599 (S.C.), which upheld the interpretation that the first purchase by a miller attracts tax liability.

The court concluded that the term "miller" as used in the 1961 amendment includes both decorticating and oil millers, and the first miller who purchases groundnuts is liable to tax.

2. Validity of the tax levied on the turnover of Rs. 4,35,214.32.
The petitioner argued that the turnover of Rs. 4,35,214.32 should be exempt from tax because the groundnuts had already suffered tax at the hands of subsequent dealers. The court, however, upheld the tax levied on this turnover based on the interpretation that the first purchase by a miller, whether a decorticating miller or an oil miller, attracts tax liability. The court noted that once tax is levied on the first purchase, subsequent transactions are not subject to further tax, in line with the restrictions under section 15 of the Central Sales Tax Act, 1956, which limits tax to one stage.

The court referred to the Supreme Court's decision in Sri Venkateswara etc. Oil Mill v. State of Andhra Pradesh [1971] 28 S.T.C. 599 (S.C.), which confirmed that the first purchase by a miller is the taxable event, and subsequent dealings in those goods are irrelevant for tax purposes. Therefore, the tax on the turnover of Rs. 4,35,214.32 was rightly levied.

3. Validity of the tax levied on the turnover of Rs. 97,200.51.
The petitioner initially disputed the tax levied on the turnover of Rs. 97,200.51. However, during the proceedings, it was expressly stated that the petitioner does not desire to press the points raised in regard to this portion of the turnover. Consequently, the court did not delve into the merits of this contention, and the tax levied on the turnover of Rs. 97,200.51 was upheld by default.

Conclusion
The court dismissed the writ petition, upholding the tax levied on both the turnover of Rs. 4,35,214.32 and Rs. 97,200.51. The interpretation that the term "miller" includes both decorticating and oil millers, and that the first purchase by a miller is the taxable event, was reaffirmed. The petitioner's arguments were found to lack merit, and the court's decision was consistent with previous authoritative rulings on the matter.

← Previous Next →