State of Andhra Pradesh vs Hampko Enterprises

B.P. Jeevan Reddy, J.—The only question in these tax revision cases is whether the expression "paper" occurring in G.O. Ms. No. 206, Revenue, dated 1st February, 1961, hereinafter referred to as "exemption G.O." includes "paper board" ? The assessment years concerned herein are 1975-76 and 1976-77. Prior to 1st September, 1976, there was no independent entry in any of the Schedules relating to "paper". With effect from the said date entry 143 was inserted in the First Schedule. The entry reads as follows :

------------------------------------------------------------------------ S. No. Description of goods point of Rate of levy tax ------------------------------------------------------------------------ 143. Paper of all kinds (including paste At the 7 paise board, mill-board, straw board and point of in the card-board), that is to say - first sale rupee. in the State. (i) cigarette tissue; (ii) blotting, toilet or target tissue, teleprinted, typewriting, manifold, bank, bond or art paper, chrome paper, tub sized paper, cheque paper, stamp paper, cartridge paper, parchment and coated board (including art board, chrome board and board for playing cards); (iii) Printing and writing paper, packing and wrapping paper, straw board and pulp board, including grey board, corrugated board, duplex and triplex boards or other sorts; (iv) all other kinds of paper and paper board, not otherwise specifically mentioned above, including carbon paper but excluding cinematographic and photographic paper. ------------------------------------------------------------------------

Of course, the aforesaid exemption G.O. was issued in 1961, i.e., long prior to the insertion of entry 143. We are told that at that time paper was taxable as "general goods" u/s 5(1) of the Act. It is also brought to our notice that subsequently the Government has issued a clarification in Memorandum No. 4657/S1/76-S, dated 11th April, 1977, to the effect that the exemption granted in the aforesaid G.O. applies to "all kinds of paper, including paperboard, card-board, etc.".

For the two assessment years concerned herein, it was held by the assessing authority that "paper board" is not included within the expression "paper" used in G.O. Ms. No. 206, Revenue, dated 1st February, 1961. The Tribunal, however, has taken a contrary view which, in our opinion, is correct. This is evident not only from the language employed in entry 143, but also from the clarification issued by the Government itself, referred to above. Firstly, the aforesaid memo being clarificatory in nature, would govern even the previous assessment years. But even if we say that the said clarification does not apply to assessment years prior to the said memo, even then the said expression has to be given a proper meaning, having regard to the context in which it is used, and the purpose which was sought to be served by the said G.O. Evidently, the said G.O. was issued with a view to encourage the manufacture of "handmade paper". The expression "paper" has a wide meaning, which is evident from the very entry 143. It would, therefore, be proper and appropriate to hold that "paperboard" falls within the expression "paper" as employed in G.O. Ms. No. 206. The Tribunal was, therefore, right in the view it took.

It may also be noticed that after the insertion of entry 143, the exemption G.O., G.O. Ms. No. 206 would be relatable to the said entry alone. If so, it may probably be just and proper to understand the expression "paper" in G.O. Ms. No. 206 in the sence in which "paper" is referred to in entry 143. We, however, desist from expressing any final opinion on this aspect.

Tax revision cases, accordingly, fail and are dismissed. No costs. Advocate''s fee Rs. 150.

Petitions dismissed.