VENKATESWARA CHEMICALS Vs. GOVERNMENT OF ANDHRA PRADESH

JUDGEMENT

(1.) THE petitioners in this batch of writ petitions are engaged in the manufacture and sale of poultry feed supplements and medicines, etc. In these writ petitions, they have assailed the constitutionality of the incorporation of the new entry 80a in the First Schedule of the Andhra Pradesh General Sales Tax Act, 1957 (for short, "the APGST Act"), by Amendment Act No. 27 of 1996 with effect from August 1, 1996. In W. P. No. 12121 of 1998, the petitioner has also sought for a direction that the poultry feed supplements are taxable only at the rate of 4 per cent with effect from August 1, 1996. The constitutionality of the impugned entry is assailed on the ground that it is arbitrary, discriminatory and violative of articles 14 and 19 (1) (g) of the Constitution of India.

(2.) THE pleading of the petitioner as set out in the affidavit filed in support of the writ petitions, to state briefly, is as follows :

(3.) WE heard Sri J. V. Rao, learned counsel for the petitioners and the learned Special Government Pleader for Taxes. Sri J. V. Rao, would strenuously contend that the Supreme Court and this Court in number of cases opined that the poultry feed and the poultry feed supplements constitute as one commodity covered by entry 80 of the First Schedule and therefore both of them are liable to be taxed at the same rate, i. e. , at 4 per cent. The learned counsel would submit that the Andhra Pradesh State Legislature to wriggle out of the above well-settled position in law has deliberately introduced entry 80a with a motive to generate more revenue for the State and has made an irrational classification of the same items earlier covered by entry 80 into two entries now, i. e. , entry 80 and entry 80a. The learned counsel would contend that as a consequence of the amendment, the poultry feed supplements which were liable to be taxed at 4 per cent before the amendment are liable to be taxed at 9 per cent after the amendment and this has resulted in an invidious discrimination and violation of article 14 read with article 19 (1) (g) of the Constitution. The learned counsel would submit that in view of the impugned amendment, the dealers in poultry feed supplements are assessed to tax at higher rate of 9 per cent even though the feed supplements come under the ambit of poultry feed as interpreted by the Supreme Court and this Court in number of decisions. The learned counsel would place reliance on the decisions in Navodaya Traders v. Commissioner, Commercial Taxes [1998] 111 STC 125 (AP), Sun Export Corporation v. Collector of Customs [1998] 111 STC 69 (SC), Arya Vaidya Pharmacy v. State of Tamil Nadu [1989] 73 STC 346 (SC); (1989) 8 APSTJ 179 (SC); AIR 1989 SC 1230, State of Andhra Pradesh v. Blue Cross Farms [1995] 97 STC FRSC 6, Cooch Behar Contractors' Association v. State of West Bengal [1996] 103 STC 477 (SC), Fenoplast v. State of A. P. [1999] 114 STC 559 (SC); (1998) 27 APSTJ 244 (SC), State of Andhra Pradesh v. Karnatakam Govindayya Setty and Sons [1984] 55 STC 160 (AP), Hindustan Agencies v. Deputy Commissioner (C. T.) [1977] 40 STC 384 (AP), Chiranjit Lal Anand v. State of Assam [1985] 60 STC 89 (SC), Coromandal Agro Products Oils Ltd. v. State of A. P. (1987) 5 APSTJ 33, State of A. P. v. Pharma Craft Laboratories (1989) 8 APSTJ 124, State of Andhra Pradesh v. Tirumalagiri Traders [1989] 73 STC 237 (AP); (1989) 8 APSTJ 246, State of A. P. v. J. K. and Company [1993] 89 STC 350 (AP); [1992] 15 APSTJ 166 and State of A. P. v. Alved Pharma, Azampur, Hyderabad (1989) 9 APSTJ 230.