RAGHAVENDRA ROLLING MILLS Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THESE 4 Appeals are filed by the assessee M/s. Raghavendra Rolling Mills, Vizianagaram and they relate to the dispute of tax for the assessment years 1994 -95, 1995 -96, 1996 -97, 1997 -98 respectively under APGST Act basing on the same issue. As the point of dispute is common to all these appeals, they are heard together and disposed of by common order.

(2.) THE Assistant Commissioner (CT) (Intl.), Vizianagaram inspected the business premises of the assessee on 11.6.99 and noticed that during all these 4 assessment years, the assessee purchased aluminium scrap from unregistered dealers for the purpose of manufacture of finished goods in their unit and they have to pay purchase tax on the turnover of aluminium scrap from un -registered dealers as per Sec. 6A of APGST Act. But, this turnover escaped assessment to tax U/s. 6A of APGST Act. and therefore the final assessment for all these years is to be re assessed U/s. 14(4) - C of APGST Act allowing the set off of tax U/s. 6A on this turnover. He also found that the assessee has to pay tax on the sales of aluminium dust and aluminium turning dust and proposed revision levying tax on the said turnovers. But, we are not concerned with these latter turnovers in the present appeals as the same are not in dispute before this Tribunal.

(3.) AGGRIEVED by the revisions made by the Assistant Commissioner (CT) (Intl.), the assessee preferred appeals before the Appellate Dy. Commissioner challenging the revision in so far as it related to the levy of tax U/s. 6A of APGST Act on the entire purchase turnover of raw material purchased from un -registered dealers instead of calculating the same on the basis of actual raw materials consumed in the manufacture of finished products. He also challenged the proceedings of the Assistant Commissioner (CT) (Intl.), also in so far as the same relates to the collection of purchase tax levied U/s. 6A of APGST Act on the purchase turnover relating to the purchase of raw material from un -registered dealers, on the ground that the same is given set off and cannot be collected again after giving set off as the Assistant Commissioner directed the collection of the said purchase tax specially in view of the circumstances that the assessee need not pay the net tax because he was enjoying the tax holiday and as purchase tax is not covered by tax holiday as per the judgment of the Hon'ble High Court in the case of Nagaratnamma Textiles and Others, Gudiwada v. C.T.O., reported in, 25 APSTJ 207 and also in the case of Kallam Spinning Ltd., & Other v. C.T.O., Lalpet, Guntur reported in : 108 STC 321. The Appellate Dy. Commissioner agreed with the first contention of the appellant and held that Sec. 6A tax is to be levied on the purchase of raw material from un -registered dealers only to the extent of its consumption in the manufacture of goods for sale, but not on the entire purchases irrespective of whether they are consumed or not in the manufacturing process. Accordingly, the A.D.C., remanded the matter to the assessing authority directing it to arrive at the net tax liability U/s. 6A of Act basing on the consumption of such scrap in the manufacture of goods for sale. The A.D.C., rejected the contention of the appellant that he need not pay purchase tax levied in the assessment proceedings U/s. 6A of the Act because the same is given set off and therefore it cannot be collected again and it amounts to double taxation. The A.D.C., did not agree with the contention of the appellant that the judgments of the High Court of A.P referred above do not apply to the facts of the case because in those cases the question of set off was not involved. The A.D.C., held that the above said judgments of the High Court apply to the facts of the case and tax holiday does not apply to the collection of purchase tax and therefore confirmed the assessment made by the Assistant Commissioner (CT) (Intl.) directing the collection of purchase tax inspite of tax holiday being enjoyed by the assessee stating that as per the judgment of the A.P. High Court, the tax holiday incentive scheme does not cover the tax on the purchase of raw material from un -registered dealers. Accordingly the A.D.C., remanded the matter on the first point raised by the appellant but dismissed the appeals in so far as the same relates to the direction for collecting the purchase tax levied U/s. 6A.