CYNAMID INDIA LIMITED Vs. COMMISSIONER OF COMMERCIAL TAXES

JUDGEMENT

(1.) IN these special appeals the common question of law which arises for consideration is whether the Commissioner is correct in holding that the product "aurofac" sold by the appellant is a medicine falling under item 37 of the First Schedule to the A. P. General Sales Tax Act, 1957 and whether the Commissioner is correct in holding that the target discounts allowed by the appellant are not deductible.

(2.) SINCE common question of law arises in all these appeals, they are disposed of by this common order. For better appreciation of facts, we trace the facts relating to Special Appeal No. 11 of 1996, which are as under : The appellant is a registered dealer under the A. P. General Sales Tax Act and Central Sales Tax Act and is an assessee on the file of the Commercial Tax Officer, Hydernagar Circle. During the assessment years 1983-84 to 1986-87 the appellant sold "aurofac" which is poultry-feed prepared with rice husk/bran, cotton seed/maize oil and containing small percentage of "auromycin Chlorotetracycline", which has some medicinal value. The product is sold in packed quantities of 1/2 kg. , 10 kg. and 20 kg. bags and as the ingredients are very light, the volume of the feed package is normally of large volume. According to the appellant, the sale was initially reported as pesticides and animal health products. However, it was advised that the goods are poultry-feed within the meaning of item 80 of the First Schedule to the APGST Act, taxable at basic rate of 1 per cent only. Therefore, at the time of filing assessment, appellant contended that "aurofac" is taxable at 1 per cent only.

(3.) AS indicated by us, since two common questions of law have been raised by the appellant before us, these appeals are heard and decided by the following common order : On behalf of the appellant Sri Srinivasa Reddy submitted that this Court in Tax Revision case No. 137 of 2001 ([2002] 128 STC 287 (AP)) (State of A. P. v. Cynamid India Limited) held that the classification with regard to "aurofac" as determined by the Appellate Deputy Commissioner was found on the basis of record and such finding of fact by the appellate authority should not have been interfered with by the higher authorities. Learned counsel stated that in view of the laws settled by this Court in the said decisions, the first issue whether "aurofac" is to be treated as poultry-feed and is liable to be treated on par with the items brought under item 80 of the First Schedule, or item 37 of the First Schedule has been settled and, therefore, submitted that "aurofac" is to be taxed as per entry 80 of the First Schedule. Agreeing to the said submission, we hold that "aurofac" is to be treated as poultry-feed and the appropriate tax to be levied on it is as per entry 80 of the First Schedule. This takes us to the second question of law, i. e. , whether the Commissioner is correct in holding that the target discounts allowed by the appellant are not deductible.