BEG - (1.)THE question before us in these appeals by special leave was framed as follows :-
"Whether 'Atukulu', (Parched rice) and 'Muramaralu' (puffed rice) are 'rice' within the meaning of Entry 66 (b) of Sch. I to the Andhra Pradesh General Sales Tax Act, 1957" ?

(2.)THIS question arose before the Andhra Pradesh High Court in appeals from single Judge decisions of the High Court, out of provisions of Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as 'the Act').
Section 5 (1) of the Act provides :

"5. Levy of Tax on Sales or Purchases of Goods : (1) Every dealer (other than a casual trader and an agent of a non-resident dealer) whose total turnover for a year is not less than Rs. 25,000.00 and every agent of a non-resident dealer whatever be his turnover for the year, shall pay a tax for each year, at the rate of four paise on every rupee of his turnover."

Section 5 (2) enacts :

"Notwithstanding anything contained in sub-s. (1) the tax under this Act shall be levied -

(a) in the case of the goods mentioned in the First Schedule, at the rates and only at the point of the sale specified as applicable thereof effected in the State by the dealer selling them, on his turnover of sales in each year relating to such goods irrespective of the quantum of turnover,

(b) in the case of the goods mentioned in the Second Schedule, at the rates and only at the point of the purchase specified as applicable thereto, effected in the State by the dealer purchasing them, on his turnover of the purchase in each year relating to such goods irrespective of the quantum of turnover."

The First Schedule to the Act dealing with matters provided by S. 5 (2) (a) contains the Entry 66 which runs as follows : JUDGEMENT_552_2_1978Html1.htm

It seems that tax on paddy which was converted into 'Atukulu' (parched rice) and 'Muramaralu' (puffed rice) had already been levied in the form in which it comes to the market as a crop. The Division Bench of the High Court in the judgment under appeal before us stated :

"It is common case that the paddy out of which these commodities have been made in all the three cases has been subjected to tax."

On this assumption, the only question before us is whether the parched rice and the puffed rice are covered by item 66 (b) which reads : "rice obtained from paddy that has met tax under the Act." 'Paddy' is defined in the dictionary as "rice in the husk". The question is : Does it cease to be even "rice" when it is converted into parched rice and puffed rice? It is true that it is no longer rice grain as it emerges from the husk. To make it edible as parched rice and puffed rice it has to go through further processes. These are only products obtained by converting rice grain into a different form of it by heating or parching. If such rice is still rice, even if we confine the term "rice" to grain, is it by going through these processes of heating or parching converted into separate items for the purposes of Entry 66 in the First Schedule of the Act ?

(3.)WE find that considerable argument was advanced in the High Court on the question whether if parched rice and puffed rice are not covered at all by Entry 66 of the First Schedule it would still be taxable. WE find that the answer given by the High Court was that, in any case, such rice would be taxable under S. 5. sub-s. (1) of the Act set out above.
It was also pointed out before us that paddy out of which the products in question become available, had already been taxed, as admitted by both sides, under item 8 of the 2nd Schedule which imposes a tax of 5 paise in the rupee on paddy at the point of first purchase in the State. The entry also says :

"Provided that a rebate of 2 paise in the rupee shall be allowed on the paddy purchased and consumed in the State in accordance with such rules as may be prescribed."

The 2nd Schedule is meant for goods in respect of which a single point tax is leviable under S. 5 (2) (b) of the Act. The difference between taxation under the First Schedule under S. 5 (2) (a) and under the 2nd Schedule under S. 5 (2) (b) appears to be that whereas the first is a tax at the point of sale the second is a tax at the point of purchase. The dealer's turnover may include purchases as well as sales. Therefore, as is assumed in the instant case, the dealer had paid a tax at the time of purchase of rice under item 8 of the 2nd Schedule, when it was "paddy", could it be contemplated that he must pay a tax again on the same item as "rice" not covered by item 66 (b), that is to say, as "rice" falling under item 66 (a) ? It is impossible to accept the view that, if paddy has been taxed in the hands of the purchaser, who is a dealer, the same individual was made to pay tax on it again as rice falling within item 66 (a) and not as "rice" falling under item 66 (b) because such a view would run counter to the express provisions of item 66 (b). If what is taxed is 'rice', it would obviously fall under item 66 (b) because it has already been taxed in the form of paddy. It could certainly not fall under item 66 (a) which is for "rice" not so taxed. To urge that it falls under item 66 (a) is to concede that it is "rice".