STATE OF ANDHRA PRADESH Vs. DECCAN LEATHERS LIMITED

JUDGEMENT

(1.) This revision under section 22 of the Andhra Pradesh General Sales Tax Act, 1957, is filed by the State against the order of the Sales Tax Appellate Tribunal dated 20/09/1988, in T.A. No. 608/1988 by which it allowed the assessee's appeal setting aside the judgment of the Appellate Deputy Commissioner, which had confirmed the order of the Commercial Tax Officer.

(2.) We are concerned with the assessment year 1980-81 and the controversy is about refund of State sales tax paid on declared goods, as those declared goods are subsequently subject to Central sales tax because of inter-State sale. The facts found are : The assessee purchased raw hides and skins and paid a tax of Rs. 76,927 on these under the provisions of the Andhra pradesh General Sales Tax Act, 1957 (hereinafter referred to as "the State Act"). Subsequently, after process of tanning he sold the resultant tanned hides and skins in the course of inter-State trade and also paid tax due under the Central Sales Tax Act, 1956 (hereinafter referred to as "the Central Act") on their inter-State sales turnover. Thereafter, he applied for refund of the amount paid under the State Act in view of the provisions of section 15(b) of the Central Act read with sections 6 and 38 of the State Act and rule 27-A of the Rules framed under the State Act. The assessing authority and the Deputy Commissioner held that tanned hides and skins which were sold in the course of inter-State trade were a different commodity from the raw hides and skins and, therefore, the assessee was not entitled to any relief. They relied upon the decisions of the Madras High Court reported in Gordon Woodroffe & Company (Madras) P. Ltd. v. State of Tamil Nadu [1977] 40 STC 130 and K. A. K. Anwar and Company v. State of Tamil Nadu [1984] 56 STC 58 and distinguished the decision of our High Court in State of Andhra Pradesh v. Associated Tanners [1975] 36 STC 32 as well as the decision in T.R.C. No. 11 of 1969 dated 10/02/1971. The Tribunal has allowed the appeal.

(3.) The Seventh Schedule read with article 246 of the Constitution of India contains the following entries : "List II - State List - Entry 54. Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92A of List I." Union List - List I under the same Schedule contains the following entry 92A : "92A. Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce." It is also necessary to refer to the relevant provisions of article 286 of the Constitution of India : "286. Restrictions as to imposition of tax on the sale or purchase of goods. - (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place - (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. (2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1). ................". The Parliament has enacted the Central Sales Tax Act, 1956 (Central Act 74 of 1956), formulating the principles for determining when a sale or purchase of goods takes place in the course of inter-State trade or commerce or outside a State or in the course of import into or export from India, to provide for the levy, collection and distribution of taxes on sales of goods in the course of inter-State trade or commerce and to declare certain goods to be of special important in inter-State trade or commerce and specify the restrictions and conditions to which State laws imposing taxes on the sale or purchase of such goods of special important shall be subject to.