SREE MANASA ENTERPRISES Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) AS common questions arise for consideration in these writ petitions, they were heard together and are now being disposed of by this common order. While the proceedings originally under challenge, in W.P. Nos. 12684, 12696, 12702 and 12725 of 2009, were orders rejecting stay pending disposal of the appeals before the Appellate Deputy Commissioner, in the other writ petitions the challenge is to the validity of the assessment, orders levying tax on sale of empty bottles. Sri N. Venkataraman, Learned Senior Counsel appearing for the petitioners in W.P. Nos. 12684, 12696, 12702 and 12725 of 2009, would submit that the petitioners therein have already withdrawn the appeals filed before the Appellate Deputy Commissioner and have sought amendment of the prayer, in the aforesaid four writ petitions, to include a challenge to the assessment order. As the validity of the assessment orders are under challenge in the other writ petitions in this batch, the amendment petitions are, accordingly, ordered.

(2.) LEARNED Counsel appearing for either side would agree that the facts in W.P. No. 6022 of 2009 are illustrative of the facts in all these writ petitions. The petitioner, a registered dealer on the rolls of the Commercial Tax Officer, Saroornagar, claims that its business relates exclusively to the purchase of empty used beer and liquor bottles from hawkers and other unregistered dealers and, after cleaning, its sale to breweries and distilleries. These beer and liquor bottles are stated to have been sold, thereafter, to manufacturers who, in turn, are said to have filled them up with beer/liquor for sale to the A.P. Beverages Corporation Ltd/Canteen Stores department. The petitioner would contend that these used empty bottles cannot, in the normal course of business, be used by anyone other than breweries and distilleries. The 2nd respondent issued a notice proposing to levy tax, for the period April, 2008 to December, 2008, on such sale of used beer and liquor bottles and, thereafter, passed orders of assessment determining the turnover, relating to the sale of empty used bottles, as liable to tax under Section 4(3) read with Item 90 of the IV Schedule to the A.P. VAT Act (hereinafter referred to the Act).

(3.) ACCORDING to the Learned Senior Counsel, the Act provides for minimizing the cascading effect of the incidence of tax and for allowability of availment of credit of taxes paid earlier through a mechanism evolved in the form of input tax credit, and its utilization in off -setting the output tax liability, that, in respect of goods specified in Schedule VI, the legislature sought to deny input tax credit as liquor and its containers are made liable to tax at a single point as opposed to the Scheme of VAT where goods are taxed at every stage of sale, that Section 4(3) read with Section 13 and Rule 20(2) manifested the intention of the legislature that, when tax was levied under Schedule IV, input tax credit was available, but where tax was levied on goods under Schedule VI, no input tax credit could be claimed, that, as there was an inseparable link between liquor and its bottles, and as no input tax credit is available for the sale of goods which fall under Schedule VI, the legislative intent is to tax such goods i.e., empty liquor bottles only once and that the turnover relating to second sale of used bottles cannot again be subjected to tax under the IV Schedule as it would amount to double taxation which is not authorized by law.