BLUE STAR LIMITED Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) The petitioners M/s. Blue Star Limited, are manufacturers of water coolers and air-conditioners. They are taxable for the purpose of local sales tax under entry 2 of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957, at the basic rate of 10 per cent. By a notification issued by the Government of Andhra Pradesh in G.O. Ms. No. 172, Revenue (S) Department, dated 13/02/1986, the rate of local sales tax is reduced to 4 paise in the rupee for such goods manufactured or produced in the dealers own manufacturing unit which is located in the State of Andhra Pradesh and the goods are supplied to (1) the Departments of Government of India or Government of Andhra Pradesh; (2) public sector undertakings including corporations owned by the Government of India or Government of Andhra Pradesh; (3) Government companies as defined under section 617 of the Companies Act, 1956; and (4) local authorities mentioned therein.

(2.) The case of the writ petitioner is that this notification by which the sales tax has been reduced on locally manufactured units supplying goods to the aforesaid specified undertakings is violative of article 304(a) of the Constitution. Reliance on behalf of the writ petitioner for his submission that this notification is violative of article 304(a) of the Constitution, is placed on the recent decision of the Supreme Court reported in Indian Cement Ltd. v. State of A.P. [1988] 69 STC 305; AIR 1988 SC 567 and the decisions reported in Weston Electroniks v. State of Gujarat [1988] 70 STC 52 (SC); AIR 1988 SC 2038 and these two decisions were followed by the Supreme Court in Hi-Beam Electronics Pvt. Ltd. v. State of A.P. [1988] 71 STC 305 and two other decisions reported in the same volume, namely, Video Electronics Pvt. Ltd. v. State of Rajasthan [1988] 71 STC 304 (SC) and Besta Electronics Pvt. Ltd. v. State of M.P. [1988] 71 STC 307 (SC).

(3.) In Indian Cement Ltd. v. State of A.P. [1988] 69 STC 305 (SC); AIR 1988 SC 567, the notification which was challenged as violative of article 304(a) of the Constitution was in the following terms :