STATE OF ANDHRA PRADESH Vs. S. LAXMINARAYANA GUPTA

JUDGEMENT

(1.) IN this revision filed by the State under Section 22(1) of the A.P. General Sales Tax Act VI of 1957 (in short 'State Act'), the question that arises for consideration is Whether the formula contained in Section 8A(1) of the Central Sales Tax Act 74 of 1956 (in short the Central Act') has been rightly applied by the Tribunal to determine the net turnover? To appreciate the question, it would be appropriate to refer to the facts giving rise to this revision. The respondent herein is a registered dealer both under the State Act as well as under the Central Act. In the assessment year 1981 -82 while determining the taxable turnover, an amount of Rs. 2,72,899/ - was deducted from the total turnover by applying the formula contained in Section 8A(1) of the Central Act by the assessing authority. The Deputy Commissioner, Commercial Taxes, Kurnool, finding the assessment prejudicial to the Revenue, revised the assessment under Section 20 of the State Act by its order dated 17.4.85. Aggrieved by the said order the Assessee carried the matter in appeal before the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad (the Tribunal). The Tribunal found that the view of the Deputy Commissioner was erroneous and having applied the formula in Section 8 -A(1) of the Central Act, deducted the disputed turnover from the taxable turnover by order dated 17.4.85. It is the correctness of that order that is assailed in this revision.

(2.) THE basic principle that is embodied in Section 8 -A of the Central Act is that there should be no tax on tax. That is why from the total turnover, the tax components representing the Central Act, were permitted to be deducted by applying the formula contained in Section 8 -A of the Central Act. The proviso to Section 8 -A(1)(a) of the Central Act enjoins that on the basis of the formula contained in Section 8 -A(1) of the Central Act, no deduction shall be made if the amount of tax collected by the registered dealer, in accordance with the provisions of the Central Act, has already been deducted from the aggregate of the sale price or otherwise. This also supports that the intention of the Parliament in prescribing the formula is that the relief should be confined to avoid tax on the tax component. But it is equally clear that the deduction allowed under Section 8 -A(1) of the Central Act would be available to the dealer, only if the tax forms a part the sale price. The burden of showing that the turnover includes the Central Sales Tax for purpose of application of the formula under Section 8 -A(1) of the Central Act, is on the dealer. In Rallies India Ltd., Vs. State of A.P. ( : 53 STC 267) a division bench of this Court held as under: