HINDUSTAN ZINC LTD. Vs. STATE OF A.P.

JUDGEMENT

(1.) THIS appeal is filed questioning the orders of the Appellate Dy. Commissioner (CT) Kakinada in appeal No. VSP. 2/89 -90 dt. 25 -7 -90 by which the orders of the assessing authority (Commrl. Tax Officer, Company Circle, Visakhapatnam) in assessment No. 4972/86 -87 dt. 27 -2 -89 were confirmed relating to the present disputed turnover of Rs. 12,71,241/ - regarding purchase of 'Water' by the appellant from Visakhapatnam Municipal Corporation. The appellant is M/s. Hindustan Zinc Ltd. It had purchased water from the Executive Engineer, Public Health Department covering a turnover of Rs. 7,98,439/ - and from Visakhapatnam Municipal Corporation covering a turnover of Rs. 12,71,241/ - which is the present disputed turnover, during the assessment year 86 -87 for the purpose of cooling its equipment used for the purpose of manufacturing of goods. The assessing authority subjected such purchase turnovers to tax u/s. 6 -A of the APGST Act on the ground that the Executive Engineer, Public Health Department which is a Govt. Department and the Municipal Corporation of Visakhapatnam which is a local body, are not doing any business and the sale of water by them to the appellant is not a business transaction and their prime activity is only to serve the public and that they are therefore not exigible to tax on the supply of such water, and the appellants are therefore liable to pay purchase tax u/s. 6 -A of APGST Act. The appellant preferred appeal before the Appellant Dy. Commissioner questioning the orders of the assessing authority regarding the purchase of water from the Public Health Department as well as from Visakhapatnam Municipal Corporation. The Appellate Dy. Commissioner allowed the appeal relating to the purchase of water from the Public Health Department in view of the observations made by this Tribunal in the earlier decision in T.A. 1387/87 d/9 -3 -90, but dismissed the appeal regarding the purchase of water from Visakhapatnam Municipal Corporation on the ground that the above said decision of this Tribunal does not apply to such purchase from the Municipal Corporation. The present appeal is filed questioning the orders of the Appellate Dy. Commissioner regarding the disputed turnover of Rs. 12,71,241/ - which relates to purchase of water from Visakhapatnam Municipal Corporation contending that the observations made by this Tribunal in the decision reported in T.A. 1387/87 d/9 -3 -90 apply even to the case of purchase from the Municipal Corporation and that the provisions of section 6 -A cannot be made applicable to such purchases. Even though the appeal was filed in the year 1990 and even though number of adjournments were granted to the appellant and his authorised Representative to appear and argue the matter, they failed to utilise such opportunity by appearing before this Tribunal and as such the State Representative was heard and the material on record is perused and orders are being pronounced on merits on the basis of the above material.

(2.) THE point for consideration is whether disputed turnover relating to purchase of 'Water' from the Municipal Corporation of Visakhapatnam is not exigible to tax u/s. 6 -A of the APGST Act?

(3.) THE next contention of the appellant appears to be that the Appellate Dy. Commissioner has allowed the appeal relating to the purchase of water from the Public Health department in view of the earlier decision of this Tribunal in T.A. 1387/87 on the ground that the Public Health Department which is a Government department cannot be called a "Person" as mentioned in section 6 -A(ii) which refers to purchase of goods from a person other than a registered dealer, that the Municipal Corporation cannot also be called a "person" as contemplated in Section 6 -A(ii) for the same reasons which apply to a Government Department and that the Appellate Dy. Commissioner is therefore not justified in dismissing the appeal regarding the purchase of water from the Municipal Corporation. But such contention of the appellant cannot also be accepted in view of the relevant provisions of law and the facts of the present case. In the case concerned in T.A. 1387/87, the purchase of water by the present appellant during the assessment year 82 -83 was from the same Public Health department. 'Person' is not defined in the APGST Act. Therefore this Tribunal in the above cited case in T.A. 1387/87 referred to the definition of 'person' in the General Clauses Act, which is as person shall include any company or Association or body of individuals, whether incorporated or not", and observed that the State Government is not included in such definition of 'person' contained in the General Clauses Act and that therefore the provisions of section 6 -A(ii) cannot be made applicable to the purchases made from the Sate Government. Such opinion expressed by this Tribunal does not appear to be correct in view of the relevant provisions of the APGST Act and as such we prefer to defer from such earlier view expressed by two Members of this Tribunal. Section 2(1)(e) as amended w.e.f. 1 -7 -85 defines 'dealer' as meaning any person who carries on the business of buying, selling......etc. Clause (i) of section 2(e) provides that local authority is also included in such definition of 'dealer'. Municipal Corporation is a local authority and as such it is to be considered as 'dealer' as defined in section 2(1)(e). Under such circumstances, Sec. 6 -A(ii) can clearly be said to be applicable to purchases from a local authority also as it is not a registered dealer. In view of such circumstances there is no necessity to refer to the definition of 'person' contained in the General Clauses Act to decide the question whether section 6 -A applies to the purchases made from such local authority which is clearly considered as a 'Dealer' under section 2(1)(e). In the present case the purchase of water is from the Municipal Corporation of Visakhapatnam which is a 'dealer' as defined in Section 2(1)(e). But it is not a registered dealer. Therefore the provisions of section 6 -A(ii) apply to the case of purchase of water from the Municipal Corporation. Inasmuch as the water so purchased by the appellant is otherwise consumed during the course of manufacture, the appellant is clearly liable to pay purchase tax u/s. 6 -A.