VST INDUSTRIES LIMITED Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The petitioner in Writ Petition No. 19360 of 1993 is a registered company, engaged in manufacture and sale of cigarettes. It is a registered dealer under the State and Central Sales Tax Acts. For the assessment year 1989-90 while assessing the turnover, the first respondent estimated the sale value of the containers at Rs. 16,18,38,000 and subjected to levy of tax at 3 per cent. following G.O. Ms. No. 693, Revenue dated 18/05/1965, and accordingly called upon the petitioner to pay Rs. 48,55,140. Although the petitioner preferred an appeal to the second respondent against the said assessment order and sought for stay of collection of tax pending appeal, the same could not be heard as the post of Appellate Deputy Commissioner, Secunderabad was vacant, and therefore, the writ petition was filed seeking for stay of collection of the said tax, pending disposal of the appeal, and also to declare that G. O. Ms. No. 693, Revenue dated 18/05/1965 is violative of section 8(2A) of the Central Sales Tax Act.

(2.) M/s. Hallmark Tobacco Company Limited, Parklane, Secunderabad, is a registered company, engaged in sale of cigarettes. It is also seeking the same relief as the writ petitioner in the other writ petition. For the assessment year 1990-91, the first respondent estimated the sale value of the containers at Rs. 4,68,53,310 and subjected the same to tax at 3 per cent. under the G.O. referred to above, and accordingly, the petitioner was called upon to pay a tax of Rs. 14,05,659. The petitioner preferred an appeal before the second respondent and asked for stay. As the post of Appellate Deputy Commissioner, Secunderabad is kept vacant, no orders of stay are passed. Hence this writ petition seeking for stay of collection of the said tax, pending disposal of the appeal before the second respondent, and also to declare that G.O. Ms. No. 693, Revenue dated 18/05/1965 is violative of section 8(2A) of the Central Sales Tax Act.

(3.) In the counter-affidavit filed by the Commercial Tax Officer in both the writ petitions, it is stated that the disputed G.O. Ms. No. 693, contemplates levy of tax on containers Involved in inter-State sales of the exempted goods at 3 per cent. irrespective of whether they are covered by declarations in form C or not. The petitioners were given show cause notices before levying tax at the rate of 3 per cent. on the containers of cigarettes sold in inter-State sales and after considering the objections, net turnover was determined and on the said turnover three per cent. tax was levied. Under the Central Excise Tariff Act, 1975, tobacco does not include the containers of cigarettes. Section 8 enumerates containers as separate category of goods for purposes of taxation. Hence, the exemption given to any goods will not automatically exempt the containers of those goods. In any event, the non obstante clause in section 8(5) of the Central Sales Tax Act, would hold the field and override section 8(2A) of the said Act.