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2007 (5) TMI 327

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..... n, C.S.N. Mohan Rao, Arjun Garg and R. Shrivastava, Advocates for the appellant. -------------------------------------------------- The judgment of the court was delivered by Dr. ARJIT PASAYAT J. Challenge in this appeal is to the judgment of a Division Bench of the Andhra Pradesh High Court dismissing the revision petition filed by the appellant under section 22(1) of the Andhra Pradesh General Sales Tax Act, 1957 (in short, "the Act"). Before the High Court the challenge was to the order passed by the Sales Tax Appellate Tribunal, Andhra Pradesh (in short, "the Tribunal "). Background facts in a nutshell are as follows: M/s. Shakthi Seeds (P) Ltd., the appellant herein, is a private limited company and they are dealers in agricultural seeds, chillies, paddy, sunflower and other crops. It is an assessee and a registered dealer under the Act. The Commercial Tax Officer, Hyderguda Circle, Hyderabad, framed final assessment orders in respect of the turnovers for the assessment year 1992-93 granting benefit of G.O. Ms. No. 604, Rev (S), dated April 9, 1981 and G.O. Ms. No. 129 Rev (CT II), dated February 14, 1989. However, the Deputy Commissioner (CT), Abids Div .....

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..... r under the Act. The Commercial Tax Officer, Hyderguda Circle, Hyderabad, framed final assessment orders in respect of the turnovers for the assessment year 1992-93 granting benefit of G.O. Ms. No. 604, Rev (S), dated April 9, 1981 and G.O. Ms. No. 129 Rev (CT II), dated February 14, 1989. However, the Deputy Commissioner (CT), Abids Division, Hyderabad, on scrutiny of the assessment finalised by the Commercial Tax Officer vide his proceedings dated December 16, 1993 noticed that the appellant after purchasing chillies, paddy and sunflower from unregistered dealers, sold those goods as "certified and truthfully labelled seeds" and on that basis claimed exemption in terms of G.O. Ms. No. 604 Rev (S), dated April 9, 1981. He, therefore, proceeded to revise the assessment order and proposed to tax on those items as the appellant effected purchase from unregistered dealers and therefore they are liable to tax as first purchasers within the State of Andhra Pradesh. Before the Deputy Commissioner (CT), the appellant contended that they are entitled to exemption in terms of G.O. Ms. No. 604 dated April 9, 1981 treating the seeds as truthfully labelled and certified seeds. In support of th .....

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..... so treated with fungicides by some persons to prevent loss of seeds and future seedlings from such seeds because of the fungal infection of the said seeds of the seeding purpose. Besides there is prohibition to use the said treated seeds for edible purpose also after certain periods after which there is no residual effect of such fungicides." In reply to the show cause notice issued the appellant had clarified its stand as follows: "In this regard, we would like to bring to your kind notice, that we have purchased processed chilli seed, paddy seed and sunflower seed from farmers, and not chillies, paddy or sunflower commodities. The above cited seeds namely chillis seed, paddy seed and sunflower seed have been processed, treated with fungicides and packed by us using packing material and sold under our brand name of 'Shakthi' as truthfully labelled seeds. Moreover the said seeds were meant for agricultural purpose only and not for food, feed or oil purpose, since failed to adduce any satisfactory material and evidence to establish these two conditions for grant of exemption in terms of G.O. Ms. No. 604, dismissed the appeal by its order dated March 13, 2000. The order of the Tr .....

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..... re first purchased only from the farmers who are unregistered dealers." There was no consideration of these aspects as apparently the High Court has lost sight of the substance of the clarification. The G.O. Ms. No. 604 Revenue (s) dated April 9, 1981 reads as follows: "In exercise of the powers conferred by sub-section (1) of section 9 of the Andhra Pradesh General Sales Tax Act, 1957 (Andhra Pradesh Act 6 of 1957), the Governor of Andhra Pradesh hereby exempts from the tax payable under the said Act the sales or purchases of all varieties of certified and truthfully labelled seeds for agricultural purposes. Sales of certified and truthfully labelled seeds in the course of inter-State trade of commerce Exemption from CST." The Clarification Memorandum No. 13630/CT-II(2)/89-19 dated April 26, 1994 reads as follows: "In the G.O. Ms. No. 604 Revenue (s) Department dated April 9, 1981, the Government issued orders exempting from the tax payable under the A.P.G.S.T. Act the sales or purchases of all varieties of certified and truthfully labelled seeds for agricultural purposes. In the G.O. second read above, a similar order was issued under the C.S.T. Act in respect of .....

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