ANDHRA PRADESH CONCRETE PIPE MANUFACTURING ASSOCIATION Vs. CHIEF ENGINEER RURAL WATER SUPPLY HYDERGUDA

JUDGEMENT

(1.) This writ petition is filed by the Andhra Pradesh Concrete Pipe Manufacturing Association, Bhavanipuram, Vijayawada and Tribunal Cement Pipe Industry, Raghupatipet, Kalwakurti mandal. The petitioners seek to issue of a writ of mandamus requiring the Commissioner of Commercial Taxes (respondent 3) to amend the instructions issued by him to the Chief Engineer, Public Health Department, Hyderabad by his letter dated 28/03/1990 (in L. Dis. No. A4/3904/89) so as to bring the same in conformity with the judgment of the Supreme Court in Deputy Commissioner of Sales Tax v. G. S. Pai & Co. [1980] 45 STC 58; AIR 1980 SC 611.

(2.) It is stated in the writ petition that the members of the 1st petitioner association are manufacturers of reinforced cement concrete pipes also known as R.C.C. pipes and asbestos cement pressure pipes (ACP pipes). The members of the said association are all said to be registered dealers under the provisions of the A.P. General Sales Tax Act, 1957 and the Central Sales Tax Act, 1956. It is further stated that the Chief Engineer, Rural Water Supply, Hyderabad (respondent 1) and the Chief Engineer, Public Health Department, Hyderabad (respondent 2), invite tenders for the purpose of execution of rate contracts, the petitioners supply the abovesaid type of pipes. These pipes are required for use by the Panchayatraj Department and the Public Health Department of the State Government. Whenever the abovesaid dealers sell these pipes to the said departments, the sales tax paid on the said sales is also included in the bill and the abovesaid departments directly pay the amount of sales tax to the Government although normally the liability to pay the sales tax is upon the said dealers. As a matter of practice, the same is allowed to be included in the bill and the sales tax component is paid by the said departments directly to the Government. In so far as the above type of pipes are concerned, it has been the contention of the Sales Tax Department that the concerned sales are liable to tax under entry 102 of Schedule I of the Act under the heading "Water supply and sanitary fittings" and that the rate of tax would be 9 per cent apart from additional tax and surcharge. On the other hand, it has been the contention of the dealers that these pipes do not fall under the said entry 102 but that they should be charged for a lesser rate of tax as general goods under section 5(1) of Andhra Pradesh General Sales Tax Act (hereinafter called "the Act"). The dealers have been contending that the abovesaid sales of pipes to the said two departments of Government are covered by the decision of the Supreme Court in Deputy Commissioner of Sales Tax v. G. S. Pai & Co. [1980] 45 STC 58; AIR 1980 SC 611, above referred to. It is stated that in several cases the dealers had to approach the Sales Tax Appellate Tribunal for obtaining the relief. As things stood thus, the 3rd respondent has issued a clarification dated 28/03/1990, to the 1st respondent in reply to a letter by the latter dated 20/11/1989, stating that the various items mentioned in his letter in column 2 are exigible to the sale tax mentioned in column 3. The two items which are relevant for purposes of the present writ petition are those at serial Nos. 3 and 4 of the said letter of the Commissioner. Serial No. 3 referred to reinforced cement concrete pipes (RCC pipes/hume pipes) and serial No. 4 referred to asbestos cement pressure pipes. The note underneath the table contained in the letter states that the rate of tax for sales of the pipes in serial Nos. 3 and 4 will be 9 per cent apart from additional tax and surcharge because the Chief Engineer, Rural Water Supply had specifically stated that the purpose for which the pipes are used was for "water supply schemes in rural areas."

(3.) It is argued for the petitioners by Sri Ravi that even though the Chief Engineer concerned had clarified in his letter dated 20/11/1989, that the supplies by these dealers of the above type of tubes are meant for use in "rural water supply schemes" the Commissioner (CT) has given a wrong clarification to the Chief Engineering stating that these tubes fall under the category of "water and sanitary fittings" in entry 102 of Schedule I to the Act and that, thereby, the Chief Engineers are including in the sale amount, an amount towards sales tax in excess of the rate under section 5(1) of the Act and that this cannot be permitted. On the other hand, it is argued by the Government Pleader, Sri M. Ramaiah that the clarification issued by the Commissioner (CT) is based upon the Government Memo No. 884/CT-II-1/87-2 dated 7/11/1987 and that the judgment of the Supreme Court in Deputy Commissioner of Sales Tax v. G. S. Pai & Co. [1980] 45 STC 58; AIR 1980 SC 611 supports the clarification issued by the Commissioner rather than the petitioners case. It is, in fact stated in the counter that even as per the abovesaid judgment, pipes which are not taken "underground" for supply of water, still fall within the words "water and sanitary fittings" in entry 102 of Schedule I. It is also argued that this Court should not decide this question at this stage when the Act provides adequate remedies for ascertainment of the facts.