STATE OF ANDHRA PRADESH Vs. LAKSHMI TRADERS

JUDGEMENT

(1.) The assessee is a dealer in paddy and rice. Paddy is taxable at the point of first purchase in the State (vide item 21 of the Third Schedule), while rice is taxable at the point of first sale in the State (vide item 22 of the Third Schedule). Explanation III to the Schedule says :

(2.) The assessee herein purchases paddy and sells a part thereof to the Food Corporation of India, as required by the Control Orders, and the balance in open market. The assessing authority treated the assessment year as one unit and applied explanation III. His order was revised by the Deputy Commissioner, who was of the opinion that the sales to the Food Corporation of India must be treated separate from the open market sales effected by the assessee (such a course is prejudicial to the assessee). On appeal by the assessee, the Tribunal set aside the order of the Deputy Commissioner and directed that the assessment year should be treated as a unit for the purpose of applying explanation III aforesaid. This view is questioned in this tax revision case.

(3.) We see no reason to take a different view from that of the Tribunal. Tax is levied upon the turnover during the assessment year. Even where provisional assessments are made every month, or at different intervals, all of them are subject to a final assessment for the assessment year. In the circumstances, the Tribunal was justified in holding that the total liability of the assessee shall be determined taking the year as the unit and the entire transactions that occur in that assessment year in respect of paddy and rice.