TMI Blog1964 (1) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... e writ or direction, for quashing the order of assessment No. 6094/59-60 dated 30th December, 1960, which had been passed by the Commercial Tax Officer, Visakhapatnam, and for a direction to the respondents to desist from taking further proceedings in pursuance of that order of assessment. In that writ petition, there are three respondents. The first respondent is the State of Andhra Pradesh, as in the other three writs. The second respondent is the Commercial Tax Officer, Visakhapatnam. The third respondent is the Deputy Commissioner of Commercial Taxes, Kakinada. The third Government Pleader, Sri P. Ramachandra Reddy, representing the respondents in all the writ petitions, contested those petitions. All the writ petitions were heard together by common consent, as they involve common questions of law. The questions concerned in W. P. Nos. 1110 of 1961, 195 of 1962 and 312 of 1963 are identical, in addition to their being filed by the same person. For convenience, those writs are referred to as the writs of M. A. Khader. The petitioner, M.A. Khader, is a skin merchant with his head office at Dindigul in Madras State. He has a purchasing branch at Hyderabad for purchasing raw skin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery was for the purpose of consumption. Their Lordships observed as follows: "Consumption consists in the act of taking such advantage of the commodities and services produced as constitutes the 'utilization' thereof............ But the fact that there is for each commodity what may be considered ordinarily to be the final act of consumption, should not make us forget that in reaching the stage at which this final act of consumption takes place the commodity may pass through different stages of production and for such different stages, there would exist one or more intermediate acts of consumption. Thus, the final act of consumption of cotton may be considered to be the use as wearing apparel of the cloth produced from it. But before cotton has become a wearing appeal, it passes through the hands of different producers, each of whom adds some utility to the commodity received by him. There is first the act of ginning; ginned cotton is spun into yarn by the spinner; the spun yarn is woven into cloth by the weaver; the woven cloth is made into wearing apparel by the tailor. At each of these stages, distinct utilities are produced and what is produced is at the next stage consumed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantially similar in effect to the provision in section 6 of the Andhra Pradesh General Sales Tax Act. In the Schedule concerned in that case, bidi tobacco was not specifically mentioned and an argument was advanced that it did not come under entry 80 which ran as follows: " All goods other than those specified from time to time in Schedule A and in the preceding entries." That contention was repelled. In the present case, there is no scope for any such contention in view of the specific mention of untanned hides and skins in item 6 of Schedule IV. In the above case, there was no contention raised or considered that purchase tax could not be levied. But, all the same, the fact remains that their Lordships did not find anything illegal in the provision of purchase tax in the Act. The learned Advocate for the petitioners has contended that, though the sale took place in Hyderabad, the purchase took place in Madras and not in Hyderabad, so far as the writ petitions of M. A. Khader are concerned. It is not possible to accept this contention. For, the sale took place in Hyderabad to the purchasing branch of M.A. Khader and the purchase by the latter also took place at the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay a tax on sale was within the legislative competence of the Legislature of Bihar. It was observed by their Lordships of the Supreme Court as follows: " The argument on this point is that sales tax is an indirect tax on the consumer............................... In our judgment this argument is not sound. From the point of view of the economist and as an economic theory, sales tax may be an indirect tax on the consumers, but legally it need not be so.........." In this case, the provisions in the Act and the Schedule are for collecting sales tax direct from the tanner who is the purchaser and consumer of raw hides and skins and the purchase was done in the Andhra Pradesh State. We find that this contention is untenable. Contention No. 1: Section 3 of the Central Sales Tax Act runs as follows: " Section 3. A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase- (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another." * * * * The learned Advocate for the petitioners contends ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . v. State of Uttar Pradesh[1961] 12 S.T.C. 429., it was observed that, where the transaction is one of sale of goods as known to law, the power of the State to impose the tax thereon is plenary and unrestricted subject only to any limitation which the Constitution might impose. In Government of Andhra v. Nagendrappa[1956] 7 S.T.C. 568 at pp. 575, 579., the relevant facts were as follows: Untanned hides and skins were purchased by licensed dealers within the Andhra State and sent to commission agents outside and sold and exported by those agents to foreign buyers. The Andhra State sought to levy sales tax upon the dealers in the State on the amounts for which they had bought the untanned hides and skins and exported out of India. The tax was sought to be levied on them as the last dealers who had bought untanned hides and skins in the Andhra State. The relevant law in force was contained in the Madras General Sales Tax Act. The Andhra Pradesh General Sales Tax Act had not come into existence and the Central Sales Tax Act of 1956 also had no application. The questions that arose were: (1) Whether the levy of the tax is authorized by the Act and the Rules? (2) Whether, even if so a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Schedule IV of the Andhra Pradesh General Sales Tax Act, so far as untanned hides and skins are concerned, when the hides and skins were bought by a dealer within the Andhra State and exported by him outside the Andhra State. In that case, the dealers were themselves purchasing within the Andhra State and were exporting them to their agents outside the Andhra State for being sold to others. In the present cases of writs of M. A. Khader, the articles were purchased by him through his branch within Andhra Pradesh State and sent to himself in Madras State for tanning and in W. P. No. 929 of 1961 the purchasing agent purchased the untanned skins within the Andhra Pradesh State and sent them to his principal outside the Madras State. But this difference in facts as compared to the facts in Government of Andhra v. Nagendrappa[1956] 7 S.T.C. 568. is not material. The principle of that decision is applicable to this case and we find that it is not possible to hold that the sale occasioned movement of the goods from Andhra Pradesh State to Madras State or that they come under section 3(a) of the Central Sales Tax Act. The first contention also fails. In the result, we find that all the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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