TMI Blog1987 (9) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed under the said Act is lower than 4 paise in the rupee, then it shall be at the prescribed rate [vide G.O. Ms. No. 540, Revenue (S) Department, dated March 24, 1984]. A doubt was raised whether additional tax payable under section 5-A and surcharge payable under section 6-B of the Act were also leviable in addition to the reduced rate of tax at 4 per cent specified in the said G.O. Ms. No. 540. The State Government clarified that the reduction in the rate of tax to 4 per cent in respect of sales, specified in G.O. Ms. No. 540 dated March 24, 1984, was only in respect of basic rate of tax specified in the Schedules to the Act but not total tax leviable under the Act. It was stated in the Memorandum No. 3920/51/84-6 dated April 3, 1986 issued by the State Government that the additional tax payable under section 5-A and surcharge payable under section 6-B of the Act were not exempt and hence they were also leviable in addition to the reduced tax at 4 paise in the rupee. Questioning the validity of that memorandum this writ petition was filed seeking a consequential direction to the first respondent herein not to collect sales tax from the petitioner at more than 4 per cent in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the totality of the tax payable under the Act was not intended to exceed 4 per cent. G.O. Ms. No. 540, Revenue (S) Department, dated March 24, 1984 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 VI of 1957), the Governor of Andhra Pradesh hereby directs, that the rate of tax payable under the said Act in respect of sales by a dealer to any of the departments and other agencies mentioned below, which are located in the State of Andhra Pradesh relating to the goods manufactured or produced in his own manufacturing unit which is located in the State of Andhra Pradesh be reduced to 4 paise in the rupee, under the Andhra Pradesh General Sales Tax Act with effect from the 1st April, 1984 notwithstanding anything contained in any of the Schedules to the said Act or if the rate of tax prescribed under the said Act is lower than 4 paise in the rupee, then it shall be at the prescribed rate. 1. Departments of Government of India or Government of Andhra Pradesh; or 2.. Public sector undertakings including corporations owned by the Government of India or Government of Andhra P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar to lead to the only conclusion that the rate of tax referred to in that G.O. was with reference to the rate of tax specified in the relevant entry of the Schedule. In such circumstances, it was stated that the *Here italicised. clarification given by the State Government in its memorandum dated April 3, 1986 that the rate of tax referred to in G.O. Ms. No. 540 was not inclusive of the additional tax under section 5-A and surcharge under section 6-B was quite legal and justified. We see force in the contention of the learned Government Pleader. If the State Government intended to reduce the total tax payable in respect of the sale transactions covered by the said G.O. to 4 per cent it would not have used the words "notwithstanding anything contained in any of the Schedules to the said Act". We cannot ignore those words and read the words "the rate of tax payable under the said Act" in isolation without reference to the other terms and expressions used in the G.O. On a plain reading of the entire notification we understand that the expression "the rate of tax payable under the said Act" is used with reference to the rate of tax specified in the relevant entries in any of the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Government Pleader has produced before us the entire file relating to G.O. Ms. No. 540, Revenue (S) Department, dated March 24, 1984. The Federation of Andhra Pradesh Chambers of Commerce and Industry made a representation on January 31, 1983, requesting the State Government to reduce the rate of sales tax to 4 per cent in respect of sales made by a dealer relating to the goods produced by him in his manufacturing unit situated within the State. They made a further representation on August 22, 1983. On the basis of those representations, the State Government issued G.O. Ms. No. 540, Revenue (S) Department, dated March 24, 1984. On November 26, 1984 the Federation of Andhra Pradesh Chambers of Commerce and Industry brought to the notice of the State Government that some of the assessing authorities in the State were insisting on payment of additional tax under section 5-A and surcharge under section 6-B in respect of sale transactions covered by the said G.O. and requested the State Government to remove the difficulty faced by the industrialists in the State by issuing orders that the total tax leviable under the G.O. was only 4 per cent. After consideration of the various r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsement of tax to 4 per cent only. According to the learned counsel, by virtue of the clarification of the State Government in its memorandum dated April 3, 1986, the burden due to additional tax liability has to be borne by the petitioner and that would financially crush him and cripple its manufacturing unit. Relying on the observations made by the Supreme Court in Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13 the learned counsel has submitted that a similar observation may be made in the instant case also. In the case before the Supreme Court the question was whether the freight formed part of the "sale price". The learned Judges held that the amount of freight formed part of the sale price. As a result of that, the tax liability of the assessee had gone up. By that time the assessee had entered into a large number of transactions of sale of cement with the Central Government and when the assessee claimed to recover sales tax in respect of those transactions on the basis that the freight was part of sale price it was pointed out that the Law Department of the Government of India advised them that freight was not part of sale price and hence no sales tax was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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