1994 (2) TMI 285 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to the levy of turnover tax on liquor dealers under the Andhra Pradesh General Sales Tax Act, 1957.
2. Interpretation of the provisions of section 5-A of the Act regarding the liability to pay turnover tax.
3. Exemption of turnover tax on goods exempted from basic tax under section 9 of the Act.
4. Discrimination against liquor dealers in the levy of turnover tax.
5. Applicability of turnover tax on the gross turnover of liquor.
6. Relevance of previous legal judgments in similar cases.

Detailed Analysis:
1. The petitioners, who are liquor dealers, sought a writ to prohibit Commercial Tax Officers from levying turnover tax on liquor sales under the Andhra Pradesh General Sales Tax Act, 1957. They argued that the levy was illegal, arbitrary, and violated Article 14 of the Constitution of India.
2. Section 5-A of the Act, as amended, imposes turnover tax on dealers with a total turnover not less than ten lakh rupees. The tax rate varies based on turnover, with exemptions for specified goods. The Act allows for deductions based on turnover at preceding points of sale, treating the tax on Indian Made Foreign Liquor as a value-added tax.
3. The petitioners contended that goods exempted from basic tax under section 9 should also be exempt from turnover tax. The court rejected this argument, stating that the exemption of turnover tax on certain goods is a policy decision and does not amount to discrimination against liquor dealers.
4. The petitioners claimed discrimination against liquor dealers in the levy of turnover tax. The court held that the Act's provisions clearly state that tax is leviable on total turnover, regardless of individual goods being taxed at single or multiple points of sale.
5. The court rejected the argument that turnover tax cannot be levied on the gross turnover of liquor. It clarified that the Act allows for turnover tax on gross turnover in addition to the tax under section 5, without any restrictions specific to liquor sales.
6. Previous legal judgments cited by the petitioners were analyzed and found irrelevant to the current case. The court dismissed all contentions raised by the petitioners and upheld the levy of turnover tax on liquor dealers under the Act.

In conclusion, the High Court of Andhra Pradesh dismissed the writ petition challenging the levy of turnover tax on liquor dealers, upholding the legality of the tax under the Andhra Pradesh General Sales Tax Act, 1957.