SHIVALINGAM BEEDI WORKS Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) T.R.C. No. 25 of 2000

(2.) THIS Tax Revision Case arises out of the order of the Sales Tax Appellate Tribunal in T.A. No. 106 of 1995 pertaining to the assessment year 1991 -92. The Deputy Commissioner of Commercial Taxes, in exercise of revisional power under Section 20(2) of the Andhra Pradesh General Sales Tax Act, revised the assessment made for the year 1991 -92 and withdrew the exemption granted by the assessing Officer on a turnover of Rs. 12,59,150/ - representing the purchase value of beedi leaves. The tribunal upheld the order of revision and dismissed the appeal filed by the assessee -petitioner. Hence this tax revision case is filed by the assessee. The petitioner offered the highest bid amount for the right to collect, remove and dispose of beedi leaves. The bid was accepted and an Agreement dated 27.2.1991 was entered with the Divisional Forest Officer, Eluru. This bid amount is referred to by the Deputy Commissioner and the Tribunal as 'royalty' paid to the Forest Department. However, no such expression is found in the Agreement. Be that as it may, the item in dispute is the amount paid to the Forest Department for collection, removal and disposal of minor forest produce (beedi leaves) ''growing or being in or upon the lands set forth in the schedule". The agreement, inter -alia, stipulates that the collection and removal of produce shall be effected only on the basis of the permits issued by the Forest Officer and the produce shall be transported through a specified route.

(3.) THE Tribunal referred to the decision of the Supreme Court in : 40 STC 603 (State of Madhya Pradesh Vs. Orient Paper Mills Ltd) and Sri Venkateswara Beedi Leaves Contractors Vs. The State of Andhra Pradesh ( : 54 STC 182). In the first case, the Supreme Court held that royalty is nothing but sale price for the sale of trees after they were cut. In the latter case, this Court, while referring to a similar agreement, held that there was sale of beedi leaves and the purchase amount comprised of both royalty and collection charges. Having regard to the said two decisions, the tribunal observed: