State of Andhra Pradesh vs Durga Rice and Oil Mill Contractors Company

P. Venkatarama Reddi, J.—In this tax revision case filed by the State of Andhra Pradesh, the only point raised is that the Sales Tax Appellate Tribunal erred in law in adding the turnover of gunnies to the rice turnover for the purpose of calculating the rebate under Explanation III to the Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957 (for short, "the Act") in connection with the assessment for the year 1983-84. The value of the gunnies so added was Rs. 40,659.28.

Explanation III to the Third Schedule to the Act provides that "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 said explanation is in tune with section 15(c) of the Central Sales Tax Act, 1956. In this case, the tax on paddy seems to exceed the tax on corresponding rice.

It is the contention of the learned Government Pleader that only the tax leviable on rice "without gunnies" has to be taken into account while working out the rebate contemplated by Explanation III to the Third Schedule to the Act. It is not in dispute that the assessing authority negatived the claim of the respondent/assessee for exempting the sale value of the gunnies on the ground that it represented second sales of gunnies. In other words, the assessing authority treated the gunnies as having been sold along with rice on the footing that there was no separate sale of gunnies for the second time when they were sold along with rice. It shows that the assessing authority himself did not infer a separate contract for the sale of gunnies which were used in the packing of rice. In the absence of a separate contract as regards which there is no finding either express or implied, it is not legally correct to exclude the value of the gunnies from the turnover of rice. The rice having been sold in packed condition and when a separate agreement for the sale of gunnies is not inferable, it is not permissible to dissect the value of the gunnies and to eliminate the same from the turnover of rice. In the circumstances of the case, the gunnies must be deemed to have been sold as integral part of rice and not separately.

We, therefore, find no merit in this tax revision case. It is accordingly dismissed. No costs.

Petition dismissed.