STATE OF ANDHRA PRADESH Vs. FAMOUS ENTERPRISES

JUDGEMENT

(1.) The question in this revision is whether from 15/02/1989 the tax is leviable on plastic containers - manufactured out of raw plastic which has already suffered tax - under item 19 of the First Schedule to the A.P. General Sales Tax Act, 1957 (the APGST Act) at the rate of 5 per cent or the manufactured articles are entitled for tax exemption on their sale, in view of G.O. Ms. No. 574, Revenue, dated 9/06/1987 Notification (1) issued by the Government under the provisions of section 9(1) of the APGST Act. The Tribunal in appeal having agreed with the contention of the respondent-assessee, the State has preferred this revision. Entry No. 186 in the First Schedule of the Act subjected plastics to tax at 5 paise in the rupee at the relevant time and under entry No. 187 the tax on articles of plastics was at 6 paise in the rupee. G.O. Ms. No. 574 was issued directing that where tax has been levied and collected under the Act in respect of the sale or purchase inside the State of plastics referred to in item No. 186 of the First Schedule to the said Act, the tax leviable under the said Act on the sale of articles of plastics referred to in item No. 187 of the First Schedule to the said Act manufactured from out of such plastics hat suffered tax be reduced by the amount of tax levied and collected on such plastics. There is no dispute that the respondent claimed exemption of the tax paid by it on the plastics purchased by it. It is, however, the contention of the petitioner that since entry No. 19 of the First Schedule was substituted by a new entry with effect from 15/02/1989 permitting tax of 5 paise in the rupee on all containers other than gunnies, bottles and plastic containers, it must be taken as the legislative intention to levy tax on containers and to take it out of the benefit of exemption as allowed in the G.O.

(2.) The submission is wholly misconceived. In the first placed G.O. Ms. No. 574 is specific that exemption is to be allowed on all purchases of plastics which are used for manufacture. It is the admitted case that the respondent purchased plastics and used it for the manufacture of polythene bags. The G.O. hence squarely applies to such a case. It is the case of the department that the situation changed only from 15/02/1989 when entry No. 19 was substituted. Entry No. 19 is one for the purpose of taxing containers, but excludes plastic containers. It is the submission of the learned Government Pleader that polythene bags are not plastic containers but that they would be containers. The submission is non-comprehensible as unless the polythene bags are plastic containers, they cannot be containers at all, in which event they would not be taxable under entry No. 19 at all. The argument is self-defeating. As a matter of fact, polythene bags and plastic bags have now been included, with effect from 1/08/1996, by amendment Act 27 of 1996 in entry No. 187 which would show that plastic bags and polythene bags have been separately considered for the purpose of taxation and the Legislature has now made it clear that while plain plastic is leviable to tax at 5 per cent, polythene bags and plastic bags are chargeable with tax of 10 per cent with effect from 1/04/1995. Read with the G.O. that would mean that exemption of tax to the extent the tax is levied on the purchase of plastic is available on polythene/plastic bags. In that view of the matter, we are in agreement with the judgment of the Tribunal and the revision is dismissed as having no merit.

(3.) Petition dismissed.