STATE OF ANDHRA PRADESH Vs. HINDUSTAN CABLES LIMITED

JUDGEMENT

(1.) These revision cases are filed by the State challenging the correctness of the common order of the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad, in T.A. Nos. 654, 655 and 483 of 1980 dated 10/10/1985. T.R.C. No. 104 of 1986 relates to the assessment year 1975-76, T.R.C. No. 110 of 1986 relates to the assessment year 1976-77 and T.R.C. No. 107 of 1986 relates to the assessment year 1977-78. These three revision cases arise under the Andhra Pradesh General Sales Tax Act, 1957. T.R.C. No. 108 of 1986 relates to the assessment year 1977-78 and arises under the Central Sales Tax Act, 1956. The T.R.Cs. relate to the same assessee, viz., Hindustan Cables Limited, a company wholly owned by the Government of India. The assessee is a manufacturer of cables among other goods. It supplies cables mainly to the Posts and Telegraphs Department of the Union of India. Under agreements which are contained in the correspondence between the assessee and the Posts and Telegraphs Department, the copper which is used in the manufacture of the cables, was being supplied by the Posts and Telegraphs Department to the assessee. The assessee was manufacturing the cables from out of the said copper and selling the cables to the Posts and Telegraphs Department. The assessee was also making use of the said copper supplied by the Posts and Telegraphs Department for manufacturing the cables for other customers also. In such cases, the assessee was reimbursing the cost of the copper to the Posts and Telegraphs Department. The turnover of the cables supplied by the assessee to the Posts and Telegraphs Department was assessed under the Andhra Pradesh General Sales Tax Act on the basis of the total amounts set out in the bills issued by the assessee. It appears that during the assessment year 1977-78, both under the Andhra Pradesh General Sales Tax Act as well as Central Sales Tax Act, the assessing authority noticed that in the provisional bill, the cost of the copper was included but in the final bills, the same was not included. The assessing authority issued notice under section 14(4) of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as "the APGST Act"), to reopen the assessment for the assessment years 1975-76 and 1976-77. The assessee filed objections on various grounds including the ground that it was barred by limitation and was merely based on change of opinion and as such, the assessment could not be reopened. Overruling the objections, the assessing authority assessed the turnover including the cost of the copper supplied by the Posts and Telegraphs Department to the assessee-company. The appellate authority confirmed the assessments. The Sales Tax Appellate Tribunal, on appeal by the assessee, held that the reopening of the assessment for the years 1975-76 and 1976-77 under section 14(4) of the APGST Act was valid. It further held that the cost of the copper could not have been included in the turnover as the assessee was not the owner of the copper. In that view of the matter, the Tribunal partly allowed the two appeals by a common order dated 10/10/1985. It is this order that gave rise to the above tax revision cases.

(2.) The learned Government Pleader contends that against the finding of the Tribunal that the reopening of the assessment was valid under section 14(4) of the APGST Act, no revision was filed, as the assessee was dealing with the copper supplied by the Posts and Telegraphs Department by making use of the same to manufacture cables for other customers, it was pledging the cables for raising loans and that in the provisional bills the cost of the copper supplied by the Posts and Telegraphs Department was included so the Tribunal ought to have held that the cost of the copper supplied by the said Posts and Telegraphs Department forms part of the turnover. Sri Srinivasa Reddy, the learned counsel for the assessee, on the other hand, contends that having regard to the unamended definition of the "turnover" in section 2(s) of the APGST Act, the Tribunal was right in holding that the cost of the copper does not form part of the turnover. He further contends that the Tribunal erred in holding that the reopening of, the assessment for the years 1975-76 and 1976-77 was valid under section 14(4) of the APGST Act.

(3.) On the above contentions two questions arise in these revision cases :