COMMISSIONER OF COMMERCIAL TAXES Vs. DESAI BEEDI COMPANY

JUDGEMENT

(1.) These appeals are directed against the judgment and order passed by the High Court of Judicature, Andhra Pradesh at Hyderabad in Special Appeal No. 27 of 1996, dated 20.01.2005. By the impugned judgment and order, the High Court has come to the conclusion that since the transactions in question are inter-State sales, the Respondent-dealer would not be exigible to tax for the assessment year 1989-1990 under the Andhra Pradesh General Sales Tax Act, 1957 (for short, "the Act").

(2.) Briefly stated, facts in the instant case are: The Respondent-Assessee is a registered dealer under the Act and under the Central Sales Tax Act, 1956 (for short, "the CST Act") with effect from 21.02.1989. The Assessee is engaged in the manufacture of 'Beedi' and has its factory and head office at Sholapur in the State of Maharashtra. It operates in the State of Andhra Pradesh through its registered branch office at Sirsilla Road, Kamareddy town, Nizamabad District, Andhra Pradesh.

(3.) The Assessee is the branch office of the Respondent-Company. The Assessee had purchased 'Beedi' leaves, for Rs. 1,07,51,740/- and Rs. 1,01,35,636/- for the assessment years 1989-1990 and 1992-1993 respectively, by participating in the auction conducted by the Forest Department, Government of Andhra Pradesh (for short, "the seller"). After the purchase, the Assessee had dispatched the said 'Beedi' leaves to the head office in the State of Maharashtra. Subsequently, the branch office of the Respondent-Company claimed an exemption on its gross and net turnover of Rs. 1,07,51,740/- and Rs. 1,01,35,636/- for the said assessment years on the ground that the aforesaid transaction is in the nature of inter-State sale and therefore, is not exigible to tax under Entry 18, Second Schedule of the Act.