TMI Blog1978 (8) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 and showed the rice was procured out of paddy purchased by them in Rs. 3,04,688, which (paddy) suffered the tax of Rs. 12,436 under the Andhra Pradesh General Sales Tax Act (6 of 1957) (the State Act). Their assessment for the year 1976-77 was concluded on 13th February, 1978, but the company did not claim the amount (Rs. 12,436) instead made a claim for reimbursement in May, 1978, and the claim was rejected by the Commercial Tax Officer. The Deputy Commissioner of Commercial Taxes rejected such a claim on 27th June, 1978, when the assessee sought revision of the assessment order under section 20 of the State Act 6 of 1957 (Writ Petition No. 3285 of 1978). M/s. Pratesh Traders, Nellore, returned their inter-State turnover of rice between 7th September, 1976, and 31st March, 1977, in Rs. 1,93,973 procured out of paddy purchased for Rs. 1,34,268. The tax suffered towards such paddy was Rs. 5,371. Their assessment for the year 1976-77 was finalised on 9th January, 1978, but the amount of tax paid on paddy was not claimed instead on 22nd May, 1978, later, reimbursement was claimed by the assessee, the Commercial Tax Officer rejected the claim. The Deputy Commissioner of Commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of special importance in inter-State trade and commerce. Subclauses (c) and (d) were added to section 15 in that chapter. The State Act 6 of 1957 was amended by the Andhra Pradesh Ordinance 18 of 1976 on 7th September, 1976. In the Third Schedule of the State Act 6 of 1957, item 21 "paddy" and item 22 "rice" were added. The Third Schedule was appended with three explanations. Explanation III is relevant and reads as under: "For the purpose of items 21 and 22, where a tax has been levied under this Act in respect of the sale or purchase inside the State of any paddy, the tax leviable on rice procured out of such paddy shall be reduced by the amount of tax levied on such paddy." The amendments to the Central Act 74 of 1956 and to the State Act 6 of 1957 both were given effect from the same day, i.e., 7th September, 1976. The amending Acts indicate that if paddy suffered a tax at four paise in the rupee on the point of last purchase, explanation III in the Third Schedule to the State Act 6 of 1957 recites the tax levied on paddy in respect of rice procured out of such paddy the tax paid has to be reduced. To the same effect is sub-clause (c) of section 15 of the Central Act, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered. Section 5 is the charging section. Section 5-A was added with effect from 1st August, 1963, levying one-fourth paisa on every rupee of turnover above rupees three lakhs. The two provisions for purposes of "rate " in the context of inter-State trade were held as under: "........ With regard to transactions coming under sub-sections (2) and (2A) of section 8 the rates of tax liability under the Central Act are made calculable at the rates applicable to the sale or purchase of the relevant goods inside the appropriate State. Therefore, with regard to transactions coming under section 8(2) and (2A) of the Central Act, the rates of tax are those which the appropriate State charges on the sales or purchases of those goods inside that State with regard to transactions other than sales in the course of inter-State trade or commerce. Then the question arises with regard to sales that take place in this State in the course of inter-State trade or commerce what are the rates of tax applicable, namely, whether the rates that are mentioned in section 5 of the State Act only or those rates coupled with the additional one-fourth per cent tax as provided under section 5-A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rket which is already subjected to sales tax, mill it and sell it outside the State. When paddy already subjected to sales tax and paddy not so subjected is milled and dealers sell it outside the State, the cost to them would be different if the sales tax is levied at the uniform rate of two per cent, i.e., the rice milled from paddy which is already subjected to three per cent sales tax would cost more. There would thus be a case of discrimination in respect of the same end-product, viz., rice. Where there are two interpretations possible for a court to take, one against the constitutionality of the provision and the other in favour of sustaining it, the interpretation which favours the latter is the one which the courts must adopt." The above decision, in our view, concludes the two contentions raised by the State Government in the instant cases and the decision holds good, for in the amending Acts to the State Act 6 of 1957 and to the Central Act 74 of 1956 no change has been brought to take any contrary view of the question raised. Thus section 8(2A) and section 15(b) and (c) of the Central Act 74 of 1956 read together and juxtaposed with items 21 and 22 of the State Act 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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