HOTEL BALAJI Vs. STATE OF ANDHARA PRADESH

JUDGEMENT

(1.) THE Judgments of the court were delivered by

(2.) TAKING a cue from the decision of this court in Goodyear India Ltd. v. State of Haryana to which I was a party, a contention has been raised, in these appeals and writ petitions, that corresponding provisions of the Gujarat Sales Tax Act, the U.P. Sales Tax Act and the Andhra Pradesh General Sales Tax Act, are ultra vires the powers of the State Legislature insofar as they seek to levy a purchase tax in certain circumstances. My learned brother, Jeevan Reddy, J., has discussed the provisions and contentions elaborately and exhaustively in his judgment. It is unnecessary for me to set out over again the statutory provisions considered in Goodyear or those which are challenged in these petitions and appeals or the details of the decision in Goodyear as these have been discussed in great detail in the judgment of my learned brother. I however, think that I owe it to myself to add a separate judgment as I was a party to Goodyear and explain my views on the provisions presently under challenge in the light of what has already been stated by me in Goodyear.

(3.) SO far as the Andhra Pradesh provision is concerned, the argument is the same, with an added advantage to the assessees that the section brings out more emphatically their point of view. Under Section 6-A(i). purchase of goods from a registered dealer is subjected to tax because, though the sale or purchase of that item of goods is generally liable to tax, .no tax became payable by the registered dealer on the sale because of the circumstances set out in S. 5 or 6. This corresponds to Section 3AAAA(a) of the U.P. Act. As against this, clause (ii) of Section 6-A deals with purchase of goods liable to tax from a person other than a registered dealer and imposes a liability to pay tax where the goods purchased are consumed by the purchaser either in the manufacture of other goods for sale or otherwise and the goods are disposed of otherwise than by way of sale or despatched outside the State otherwise than in the course of interstate trade or commerce. In other words, the real taxable event for the charge under Section 6-A(ii), it is said, is not the purchase of goods but the consumption, manufacture or consignment of the same or other goods outside the State. If that be so, it is said, the imposition is ultra vires the State Legislature on the principle of the decision in Goodyear.