CIVIL APPEAL 1149 of 7999 on 15 November 2001

HIGH COURT FOR TT.IE S]'A'I'E OF TELANGANA AT FIYDERABAD

]\,TONDAY, Tt{E THIRTY FIRST DAY OF OCTOBERTWO THOUSAND AND TWENTY TWO

PRESENT

THE HONOURABLE SRIIUSTICE T.VINOD KUMARANDTHE HONOURABLE SRIIUSTICE PULLA KARTHIK

Tax Revision Case Nos. 23,33,66 and 106 of2003

'I'.i{.C.No.23 of 2fi)3

Tax revision under Section 22(7) of A.P.G.S.T. Act, 1957 aggrievedbv the orcler datetl 15.11 2001 made in T.A.No.1149 of 7999 on the file ofthe Sales Tax Appellate Tribunal, Hyderabad, against order dated05.11.1998 in Procs. No.R1/802/95 on the file of the DeputvCommissioner (CT) Secunderabad DivisiorU preferred against the orderda&d tf .ff .f [g94 ]in r\ssessment No._/1993-94/ APGST on the file ofthe Commercial Tax Officer. Ashok Nagar, Hyderabad.

Between:Tl're State of Andhra Pradesh, rep. by the State Representative beforeSales Tax Appellate Tribunal D.No.54-404 to 408, Nampally,Hyderabad.

...Petitioner-

Al'iD

\,j/s. Sree Durga Traders, 1-2-2U/30/40, Aravindanagar, Domalguda,Flvderabad.

...Respondent.

Counsel for the Petitioner: Sri K.Raji Reddy, Special Standing counselfor Commercial Taxes Counsel for the Respondent: Sri P. Karthik Ramana, representing Sri S.Dwarakanath, Advocate T.R.C.No.33 of 2fi)3

Tax revision uncler Section 22(1) of A.P.G.S.T. Act, 7957 aggrrevedbv the ordel dated 15.11.2001 made in T.A.No.1488 of 1999 on the file oftire Sales Tax Appellate Tribunaf Hvderabad, against order dated ,/'

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c,l/--

10.09.1999 irr Plot s.No.l'11/324/96 on the file o [t:re ][l)eputy]Comnissic rtt'r- [' ]- l ) Stlctr [rri ]lclabad [l)ivisiory ][prefrrrrtltl ][aIainst ][the ][order]clatecl 15.{)!r.l'j() irr itsst'ssrtrerrt GLNo.- /94-9!;/t\I'{'!'l [c'n ][thc ][file ][of]the Comrnt,r'cia f ,rx L)ff itte'r, [,'\shok Nagar, ][Hvder ][abacl.]

Betra,er-:n:Jht Stalo ol [-\n]lirra l)radesh, repby the State Reprrts,:ut,ttive [before]Sakts I ar [11..],t, la te l ribtrnal,D.No.5-404 to 4r [)8, ]Narnpall,v,Ilr'derah.rd.Petitioner.

ANI)

NI/s. Srcc I [)tu-p,a ]I ['arlt'ts]| -).-)31 / 30 / 40, Aravindaaag; [r' ][I)cmalguda,]Hr.tlerairatl...F espondent Counsei lor tht' [L ][r'titi,-)1r01: ][Sri ][K.lLaji ][Reddy, ][Specitrl ][Stturcling ][cotmsel]

lor Ck,n rr e rcial Taxes

Counsel lor tlu' li [r'spttndertt: ][Sri ][P. ][Karthik ][Ramar ][r, ][rep'er;enlilg]Sri S.I)n,ala karrall-r. .'\dvoca [k'.]

I.R.C.No.66 o{ [20( ]l

'fax rt'r'i:,io t :rttclt't Scction 22(l) of A.P.G.S.". Act ['-937'aggrieved]by the ortler datt: I l5 1l.20tl [t ][made ][in ][T'A.No'148r7 ][ol ][l-()qt) ][on ][the ][file ][of]the Sales 1ax .\PPellate [Tribunal, ][Hyderabad, ][agairsr order ][dated]10.09.1999 in I o.s No.Iil,/324/96 on the 'ile [t,f ][the ][Deputy]Comnissiorer ((-. ) St:cunrlrlabad [Division, ][prefelrett ][a4ainst the ][order]riated 1c.09. [9(,:-r n .\sst'sstuottt [G.1.No.15455/799'l-9-.t ][on ][the ][file ][of ][the]Cormnert ial ['f ]ax [( )l ][.it:er, ][\shok \agar, ][Hvderabad.]by the ortler datt: I l5 1l.20tl [t ][made ][in ][T'A.No'148r7 ][ol ][l-()qt) ][on ][the ][file ][of]the Sales 1ax .\PPellate [Tribunal, ][Hyderabad, ][agairsr order ][dated]10.09.1999 in I o.s No.Iil,/324/96 on the 'ile [t,f ][the ][Deputy]Comnissiorer ((-. ) St:cunrlrlabad [Division, ][prefelrett ][a4ainst the ][order]riated 1c.09. [9(,:-r n .\sst'sstuottt [G.1.No.15455/799'l-9-.t ][on ][the ][file ][of ][the]Cormnert ial ['f ]ax [( )l ][.it:er, ][\shok \agar, ][Hvderabad.]

LJe tu.'t err

The Statc ol -'\ntl rra Pratlcsh, [tep]bv the State Ilepresentative [before]Sales Tax .\1,pr [l,rte [Tribturaf]D.No.5-4-404 to 4)t\, [\amPalIY,]I Ir'der.rb.rc1.

... Petitioner.

r\ND

\,{/ s. Sree Drrltl a I [rr ][Iustrir:s, I ][-2-234 ]/ [30 ]/ [40. ][Aravindal;r1;ar',]Dotnalguda, I Ir tlr ri [bacl.]

...Respondent.Counserl for thr' ['. [rtiont'i: ][Sri ][K.Raji ][Reddy, ][Special ][Staltling ][t ][oul.sel]for [(lcu ]nr ner:ial ['l'trxes]

Counsel [f ]or tht' li,- [;l ][cxtcierlt: ][Sri ][P. ][Karthik ][Ramana, ][repr('s"nting]Sri S. T [)rt,.rra ]k,utaLtl [. ][\dvo(,lr(']

,-- 3

T.R.C.No.106 of [2003]

Tax revision under [Section ][22(1,) ][of ][A.P.C.S.T. ][Act, ][1957 ][aggrieved]bv the order dated 15.11.2001 [made ][in ][T.A.No,894 ]of [2000 ]on the file ofthe Sales Tax Appellate [Tribunal, ][Hyderabad, ]against order dated72.09.2000 in R.C.No.R1/325l99 on the file of the DeputyCommissioner [(C'I) ]Secunclerabad Division, preferred against the orderdated 14.09.1996 in Assessment G.I.No.15455/1995-96/APGST on thefile of the Commercial Tax Officet Ashok Nagar, Hyderabad.

Between:The State o{ Andhra Pradesh, rep. by the State Representative beforeSales Tax Appellate Tribunal [D.No.5-4-404 ]to 408, Nampally,Hvderal-rad.

...Petitioner-

r\i{D

M,/ s. Sree Durga Industries, l-2-234 / 30/ 40, Aravind atagar,Domalguda, Hyderabad.

...Respondent.

C,ru.rs"t for the Petitioner: Sri K.Raji Reddy, Special Standing cor.urselfor Commercial Taxes Counsel for the Respondent: [Sri ][P. ][Karthik ]Ramana, representingSri S.Dwarakanath, Advocate.

The Court made the following: COMMON ORDER

TH]) I{ON'BLE SRI JUSTICE T. VINOD IiI]MI.RANDTH } :[{ON'BLE SRI JUSTICE PULL,A KAIT'I'HIK

TAX RE t/lSION CASE Nos,23 33 66 AND ltXi of 2OO3

COMMON C RDER(per Hon'ble Sri Justice T.\,inori (r. mar)

'l'hest: b,rtch of Tax Revision Cases (TIlCs) z r, hl--d bl. theState beine. a 3grieved by thc order passec by I. _- Stales TaxAppellate ['L' ]brrnal (for short'the STAT,) in T.A. No;.'71)6 of 1999,1487 ol l9(. 9 tl94 of 2000 in the case oi IVI I s. Srr,c DurgaIndu.strie s :i :cl T.A. No.1488 of 1999 in the ciLse o[ IV /s. SreeDurga 1'rarlc s.

2 Sinctt r [itr' ]issue involved in all the Ta: Rr:r,i;irrn 3ases isone ancl tltr: srrnre, they are bcing disposec ol h1- a rtommonorder.

3. Thr: [r-e ]spondents arc registered dealers ,rncier theprovisiorrs o' lt P(]ST Act and were assess(.d to 1,rx for theassessmcnt [.;:ars ]1993,94, 1994_95 and 1!r95_()1i unler theAndhra I)rarft: rh General Sale s Tax Act, 1957 (for slor.t,the Act)by the Corn: re [-cial ]Tax Officer, who granted (r;i€ nplion inrespect cf thf l.urnover relating to hrst sale of filte - c oth asfalling under-J: r-rrry 5 of IV Schedule to the Act.

4. 'fh<: [)r: x. ty Commissioner, on exarrinatic, r of theasscssmbnt .'e r :l'd, in exercise ol powers unde. Sectic,n 2O(2) of ')

the Act, found [that ][the ][said order ][of ][assessrncnt ][grantlng]on [hrst ][saie ][of ][frlter cloth ][by the ][assessee ][to ][be]exemption to the [interests ][of ][revenue ][and ][revised ][the]prejudicial assessment [orders ][passed ][withdrawing ][the ][exemption ][granted]and brought [the turnover relating ][to first ][sale ][of ][filter ][cloth ][to]tax

5. The Revisional [Authority ][was ][of ][the ][view ][that ][the]industrial cloth [sold ][by ][thc ][petitioner ][does ][not ][confirm ][to ][be]called as a cotton [fabric ][inasmuch ][as ][the ][same ][is ][used ][as]industrial hlter [cloth and ][since ][the ][cotton ][fabric ][ald ][industriai]fabric are two [different commodities, the ][assessee ][is ][not ][entitled]for the benefit [of ][exernption ][under ][Schedule ][IV ][of ][the ][Act']

6. Aggrieved [by the ][said ][order of revision' the ][assessee ][had]preferred an appeal [before ][the ][Salcs ][Tax ][Appellate Tribunal](STAT). ['lhe ]STAT, [after considering the ][Entry ][5 ][as ][contained ][in]Schedule [IV ][of the Act ][at ][the relevant ][point ][of ][time ][and also ][on]examination [of ][the ][sample ][produced ][before ][it' ][had held ][that ][the]goods sold by the [assessee ][is ][nothing ][but ][fabric and ][it ][is ][being]sold from [running ][meters as ][per the ][requirement ][of ][customers]and thus the [same ][would ][squarely ][fall ][under the ][definition ][of]'fabric' [and the turnover ][representing ][such ][sale ][of fabric ][would]

lx:

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bc t ovr:rr ,1 bJ. Entry 5 of thc IV Schedul: of tlrc Act ancl wouldnot [}te ]ltit )l I to tax 7Age rir:ved by tl-re said order, the Sta e has ccm3 up by wayofprcsenr Revision to this Court

8. Hea cl Sri K. Raji Reddy, learn:d ll r(:cialStandingCoursel ; ltpezrring for the petitioner_Stat e anrl.)rlP. KarthikR:rm:rna, eitrned Counsel representing Sri lSDrvarakanath,learn,:d ,:o rr sel appearing lor the responde nt.9. The rroduct that is sold by the peiitionr:r zrs IndustrialFilter Clotf ir; made ol- cotton. The Entry S of Lht. lV Schedule ofman rnatie fabrics and tuoolen fabic_s" . E 1, w,ly of anexplar:atior in the said Schedule, it is state,l thzrt _ ..Theexpression. i;.t ir,em Nos.5,6 and 7 shali har.e the s,Lmt: meaningas assign,:cl t( tltem in the Additional Dutier; of Il:<r se (Goods ofSpecia, Intp rr -ance) Act, l9S7',. However, t hc saic cxplanzrtionunderu,ent r n arnendment with effect from ()g.Ol).I :)96 wherebyfurlher u.ot-c s reading as [,,but ]does not inchrde g(x),ls ..4rhere noadditiotral dr rties of t:xcise are levied ,ndcr thar S:l;cdrrlc" havcbeen aclde rl.

10. TIte .?,: [,ir;ional ]Authority on initrating revision in order toascerlai.n zts tr ivhether the goods dealt b_r thr- 1tr:titroner as covered by the Additional Duties of Excise (Goods of SpecialImportance) Act, 1957, had referred the matter to Central ExciseAuthorities to ascertain as to whether the industrial hlter clothsold.by the petitioner would meet the description of [,cotton]fabrics'. In response to the reference made by the RevisionalAuthority, the said authority has clarified that the goods sold bythe petitioner would be falling under Central Excise TariffAuthorities to ascertain as to whether the industrial hlter clothsold.by the petitioner would meet the description of [,cotton]fabrics'. In response to the reference made by the RevisionalAuthority, the said authority has clarified that the goods sold bythe petitioner would be falling under Central Excise Tariffheading No.5406.1O of the Central Excise Tariff, however, theadditional duty chargeable is 'nii'. It is based on the saidclarification, the Revisional authority had rejected the claim ofthe assessee and subjected the turnover to tax.

I I . The Tribunal, by taking note of the wording in theexplanation as existing at the relevant point of time, held thatwhat was required to be seen is whether the goods mentioned atitem No.5 are specihed under the Additional Duties of Excisewhat was required to be seen is whether the goods mentioned atitem No.5 are specihed under the Additional Duties of Excise(Goods of Special Importance) Act, 1957 or not, as the basis forgranting exemption and it is not necessary that the exemptionwould be available only when the additional duty of excise isgranting exemption and it is not necessary that the exemptionwould be available only when the additional duty of excise islevied under that Schedule. The Tribunal had arrived at thesaid conclusion having regard to the amendment brought to theexplanation with effect from 08.02.1996 wherein the conditionof goods being subjected to additional duiy of excise has beenspecifrcally introduced. Thus, prior to the said amendment, the :{initi only rc(luii-ct 1( nt is to t he goods being incluCerl irr .hc relevanlHead and ;u > Hr:ads of the I Schedule to thr: Ad,lir_ :niLl Dutiesof Excise ((],, ;r, s of Sper:ial Importance) Act, 195,, zrrrcl ro otherconditiot't c ztr lte read thereinto. Since, the asse ;s -ne 1t ).carsinvolr,cd in t rr: prest:nt Revision relates to ,9<171. 1-\)94, 1gg4_1995 ancl 9,)5 1996 up to 07.02.1996, the -espondentauthoritie s c. njot insist" to apply the amenc ecl e>.1t anrltion todeny the bene Llt.

12. Th us, ir the view of this Court, the order ol. ,i e Tribunal in zrllowing a1-^ rr,als filed b1, the assessee is totalll. jrl;tified zrnddocs not call o:' iLny interference, much less gi,rinq rai se to aqucstion of ler,.' for this Court to reverse the said c.r nc,usionsarrived.

13. lrt vieu' ,,' ihc abr>ve, these Tax Revision Oase:s zL.e *.ithoutmerit zrnd an:, c:ordingly, clismissed.

14. As zr s,:c[ rel, the miscellaneous petitions if :Lr rv pe ncling,shall st:rntl cl.s :c s(l/-c.v.rvIAr-LtK,\Rr[. [N,.r ]' 'ARN'IAJ()Ilil [ItI ][CISI'RAR][[COPY ][/ ]][[/ ]]If.SI i(--' t-lr lN [-Orf ICER]

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1. fhc [St'L ][ret(I ][l ][the ][S,i1t's ][I ][ax ][Appellate ][lribtural' ][Ilr ][' ][k'r'rLr'rd'(r'n'ith]recottls, i: [,t ][tl ][)]),',' 1',,'1.,1,r [(]xlrtnissioner ][(C! ][Secr'rndel ][abarl ][I ][)il'lsion (with]il [,ll ][\ ][I]rer(\Id\ -il ii;. l,,' l-,,,rr.,, a - '; . 1 [rr ]ri [ial ]K R.rii [I,rx ]iit'tltlv,thc [( ][rlticer, ][.'\shok ]Sle-c-ra-l [Nagal', ]eovt [I ][{vrleral'ai1]Pleatle r fort'n,,,i, [,',,. ][i,t ][I,t'.es' ][I ][Iililr t'ortrlIOPUCl]

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Te1.Be_yt.l1e!_t ['4se ][Nos. ][23. ]33,.66 and 106 of [200_l]

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