LAXMIGANAPATHI ENTERPRISES Vs. COMMERCIAL TAX OFFICER NALGONDA

JUDGEMENT

(1.) In these writ petitions, the petitioners who are rice millers question the legality of the assessment orders passed by the first respondent for the year 1997-98 on the ground that the deduction of tax to the extent permissible under Rule 6(1)(l) of the Andhra Pradesh General Sales Tax Rules has not been given based on the Circular issued by the Commissioner of Commercial Taxes, the 2nd respondent herein in Roc. No. AII (1)/1950/98, dated 24-2-1998.

(2.) Paddy and rice are declared goods. Declared goods are specified in Section 14 of Central Sales Tax Act to be goods of special importance in inter-State Trade and Commerce. The declared goods are chargeable to tax under Section 6 of APGST Act read with III Schedule at single point and at a rate not exceeding 4%. Paddy is taxable at 4% at the first purchase point whereas rice is taxable at the point of first sale at 4%. In order to avoid the contingency of both paddy and corresponding rice being subjected to tax, the Legislature introduced Explanation (III) Schedule in tune with Section 15(c) of the Central Sales Tax Act. The said Explanation reads as follows:

(3.) To illustrate the application of the Explanation if the sale value of rice is Rs.5,000.00 and the purchase value of paddy from which rice is derived is Rs.4,000.00, the actual rate of tax payable would be Rs.40.00 i.e., 0.8%. This is the net amount of tax payable, though if the general rate of 4% is applied, the tax would have been Rs.200.00.