TMI Blog2014 (7) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... emption under section 10 of the said Act and consequently the respondent cannot validly shift the burden of tax to the purchaser under section 5A for the same would violate the condition of single stage tax under section 15 of the Central Sales Tax Act - following the decision in Peekay Re-Rolling Mills (P) Ltd.'s case [2007 (3) TMI 356 - SUPREME COURT OF INDIA], we hold that the petitioner cannot be made liable to pay the purchase tax under section 6A of the Andhra Pradesh General Sales Tax Act, 1957 - Decided in favour of assessee. - Tax Revision Case Nos.2,3,4,5,6 of 2001 - - - Dated:- 21-1-2014 - Ms. Rohini G. AND Sunil Chowdary T., JJ. For the Appellant : S. Dwarakanath For the respondent : P. Balaji Varma, Special Standing Counsel for Commercial Taxes, ORDER:- The order of the court was made by MS. G. ROHINI J.- M/s. A.P. Paper Mills Limited, Rajahmundry, a registered dealer under the Andhra Pradesh General Sales Tax Act, 1957 (for short, the APGST Act ) is the petitioner in all these revision cases filed against the common order dated September 27, 1999 passed by the A. P. Sales Tax Tribunal, Hyderabad, in T.A. Nos. 323, 325, 360, 362 and 324 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... selling dealers by taking appropriate legal action. Though the finding recorded by the Tribunal that there was no proof to hold that the selling dealers had collected the tax from the petitioner is not assailed before us, it is submitted by Sri Vemireddy Bhaskar Reddy, the learned counsel for the petitioner, that the question whether the burden of tax can be shifted to the purchaser when the goods which are liable to single stage tax under the statute are exempted from payment of sales tax is no longer res integra in view of the recent decision in Peekay Re-Rolling Mills (P) Ltd. v. Assistant Commissioner [2007] 6 VST 541 (SC); [2007] 4 SCC 30. In the light of the law laid down in the said decision, the learned counsel submits that the burden of tax cannot be shifted to the petitioner since the dealers from whom the petitioner purchased burnt lime were admittedly exempted from payment of sales tax. However, Sri P. Balaji Varma, the learned Senior Standing Counsel for Commercial Taxes appearing for the respondents, sought to distinguish on the ground that in Peekay Re-rolling Mills (P) Ltd.'s case [2007] 6 VST 541 (SC); [2007] 4 SCC 30, the Supreme Court had considered th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r each year irrespective of the quantum of his turnover in such goods, and the tax shall be assessed, levied and collected in such manner as may be prescribed: Provided that where any such goods on which a tax has been so levied are sold in the course of inter-State trade or commerce, and tax has been paid under the Central Sales Tax Act, 1956, in respect of the sale of such goods in the course of inter-State trade or commerce, the tax so levied, (shall be reimbursed to the person making such sale in the course of inter-State trade or commerce,) in such manner and subject to such conditions as may be prescribed. Section 6A which provides for levy of tax on turnover relating to purchase of certain goods may also be extracted hereuner: 6A. Levy of tax on turnover relating to purchase of certain goods.-Every dealer, who in the course of business,- (i) purchases any goods (the sale or purchase of which is liable to tax under this Act) from a registered dealer in circumstances in which no tax is payable under section 5 or under section 6, as the case may be, or (ii) purchases any goods (the sale or purchase of which is liable to tax under this Act) from a person other th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nexure therein provided the said units are covered by the certificate issued by the A.P. Khadi and Village Industries Board. Lime manufacturing is included as item 12 in the annexure to the said notification at the relevant point of time. Thus, it is not in dispute that the dealers at Piduguralla from whom the petitioner purchased burnt lime were exempted from payment of tax on sales of goods during the period covered by the assessments in question. In view of the sales tax exemption so granted to the dealers from whom the petitioner purchased burnt lime, the learned counsel for the petitioner contends that the goods purchased by the petitioner cannot be subjected to purchase tax in the hands of the petitioner under section 6A of the APGST Act. Placing reliance upon Peekay Re-Rolling Mills (P) Ltd.'s case [2007] 6 VST 541 (SC); [2007] 4 SCC 30 it is vehemently contended by the learned counsel for the petitioner that in view of the exemption from tax granted in favour of the selling dealers of the petitioner, the impugned action of the respondents in levying tax on the turnover relating to purchase of burnt lime by the petitioner under section 6A is arbitrary, illegal an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever the assessment was sought to be revised claiming that the ingots purchased by the appellants were goods liable to tax under the State Act and since the supply of such ingots did not suffer any tax at the time of sale due to the exemption, the purchase turnover of the ingots consumed in the manufacture by the appellant attracted liability to tax under section 5A of the Kerala General Sales Tax Act, 1963. Thus it was alleged in the show-cause notice that the purchase turnover of the ingots had escaped assessment under section 5A and therefore the turnover is liable to be taxed at the rate of four per cent. Aggrieved by the same, the appellant filed writ petitions before the High Court of Kerala which were disposed of with a direction to the appellant to file objections to the show-cause notices. The writ appeals preferred by the appellant were dismissed by the Division Bench holding on merits that the expression levy includes collection of tax as well and not mere imposition and that in the absence of collection of tax there is no levy and since the goods were exempted from payment of sales tax the goods could be subjected to levy of purchase tax under section 5A of the Keral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 5A for the same would violate the condition of single stage tax under section 15 of the Central Sales Tax Act. It is no doubt true that in the abovesaid decision the Supreme Court considered the tax liability with regard to declared goods and in the facts of the said case it was held that the burden of tax cannot be shifted to the purchaser since the same would be violative of the condition of single stage tax under section 15 of the Central Sales Tax Act. However the ratio laid down was to the effect that the collection and levy are distinct and that it does not logically follow that absence of collection means an absence of liability. Coming to the decision of M.K. Kandaswami's case [1975] 36 STC 191 (SC); [1975] 4 SCC 745 in which the Supreme Court considered the interpretation and validity of section 7A of the Madras General Sales Tax Act, 1959 which is in pari materia with section 6A of the A.P. General Sales Tax Act, 1957, it was held (page 201 in 36 STC): . . . Section 7A itself is a charging section. It creates a liability against a dealer on his purchase turnover with regard to goods, the sale or purchase of which though generally liable to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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