ITC LIMITED SECUNDERABAD Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) These writ petitions are filed challenging the validity of the Andhra Pradesh Tax on Luxuries Act, 1987 as amended by Act No.28 of 1996 (hereinafter referred to as the impugned Act) on the ground that it is ultra vires Articles 14, 245, 246, 265, 269, 286, 301 and 304 of the Constitution of India and, therefore, unconstitutional and void as the purported levy of the tax is in effect and substance a tax on sales and, therefore, void, and ultra vires the Section 15 of the Central Sales Tax Act, 1956, and consequently the 1st respondent has forfeited its entitlement to its proportionate share of additional excise duty collected by the 2nd respondent under the provisions of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. WPNo.16909 of 1996 is filed by M/s. ITC Limited, WP No.16913 of 1996 is filed by M/s. VSR Industries Limited.

(2.) WP No.16914 of 1996 is filed by M/s. Godfrey Philip Limited and others and WP Nos.1560 of 1997 and 25071 of 1997 are filed by M/s. Purandas Ranchodas and Sons and others. The 1st respondent is the State of Andhra Pradesh and the 2nd respondent is the Union of India, the 3rd respondent is the Chairman, Central Board of Excise and Customs and the 4th respondent is the Commissioner of Commercial Taxes. By WP No. 16909 of 1996, tie petitioner is challenging the levy of luxury tax on cigarettes and tobacco products at a rate of 5% on manufacturers and importers of all forms of manufactured tobacco including cigarettes. Originally an ordinance was promulgated on 1-8-1996 amending the AP Tax on Luxuries Act 1987 (State Act 24 of 1987). The said ordinance later on became an Act (Act No.28 of 1996). The petitioners in other writ petitions also challenged the validity of the Act No.9 of 1997.The Facts in Brief are as follows:

(3.) The Counsel submitted that the levy of tax on luxuries is in pith and substance a tax on sale for the following reasons: