GIN TEXTILES LIMITED Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THIS appeal is preferred by the dealer M/s. Gin Textiles Limited, Somajiguda, Hyderabad aggrieved by the order of Appellate Deputy Commissioner (CT)., Punjagutta Division, Hyderabad dated 6 -5 -1998 in Appeal No P/46/98 -99 dismissing the appeal filed against the order of Commercial Tax Officer, Khairatabad Circle, Hyderabad dated 16.03.1998 in procgs. Re. No. PJT/07/1/Sec.5 (B)/55/91 -92, vide this order, the Commercial Tax Officer deleted certain goods from G2 Certificates issued to the Appellant such as Machinery Spare Parts, Bearings, Cables, Valves, Water Pipes and HDP Pipelines with effect from 16 -03 -1998 from among the item eligible for concessional rate of tax under Section 5 -B of APGST Act. By the same order he rejected the request of the Appellant for inclusion of Electrical Spare Parts and Furnace Oil in their G2 Certificate. The Commercial Tax Officer observed that, G2 Certificate of the Appellant was amended with effect from 30.07.1997 as per his request to include Bearings, Machinery Spare Parts, Cables, Valves, Water pipes, in pursuance of the clarification issued by the Commissioner of Commercial Taxes vide Circular dated 14.03.1997 and 24.04.1997 clarifying that the manufacturer can buy as per Section 5 -B Tools, Stores, Lubricants or any other goods excepting Petrol, Diesel and Gases used in the manufacture or processing of goods by issuing G -Forms. The Commercial Tax Officer states that Commissioner of Commercial Taxes again issued clarification vide his order dated 22.11.1997 that Section 5 -B provides for concessional rate only on items which are ingredients or components of the final product and this benefit cannot be extended to capital goods. Relying on this clarification issued by the Commissioner of Commercial Taxes on 22.11.1997, the Commercial Tax Officer deleted the above items from the list of items mentioned in G2 Certificate of the Appellant which are eligible for concessional rate as per Section 5 -B of APGST Act and also refused to include Electrical Spare Parts and Furnace Oil in their G2 Certificate. Aggrieved by the order of Commercial Tax Officer, the dealer filed appeal before first appellate authority and the Appellate Deputy Commissioner confirmed the order of the CTO by dismissing the appeal vide impugned order holding that as per the Section 5 -B of APGST Act, only those goods which may be used as raw material, component part etc., are entitled to be included in G2 Certificate and the goods which are deleted by the Commercial Tax Officer and which he refused to incorporate in G2 Certificate cannot be used as raw material component part etc., in the manufacture of goods in their industry and therefore the CTO is justified in passing the order and the same cannot be interfered with.

(2.) AGGRIEVED by the dismissal of the appeal by the Appellate Deputy Commissioner, the dealer preferred this appeal contending that the appellant is entitled for inclusion of the above items in G2 Certificates as per the Circular issued by the Commissioner of Commercial Taxes dated 14.3.1997 under the powers vested in him under Section 42 -A of APGST Act which is in force and operative and the first appellate authority dismissed the appeal completely ignoring this Circular. It is pleaded that, both the authorities ignored the ingredients of the Circulars and Section 5 -B. Thus, it is pleaded that, the assessing authority may be directed to restore the items included in G2 Certificate and incorporate the additional items under Section 5 -B as requested by the Appellant.