S.L.S. TEXTILES LIMITED Vs. THE STATE OF ANDHRA PRADESH
LAWS(ST)-1993-11-4
SALES TAX TRIBUNAL
Decided on November 17,1993

S.L.S. Textiles Limited Appellant
VERSUS
The State Of Andhra Pradesh Respondents

JUDGEMENT

R. Bayapu Reddy, Chairman - (1.) THESE two appeals are filed by the same appellant questioning the orders of the revisional authority (Deputy Commissioner of Commercial Taxes, Chittoor) who revised the respective orders 'of the assessing authority and subjected the disputed turnovers relating to inter -State sales of 'Hank Yarn' to tax under the CST Act. The particulars of the present appeals are as follows:
(2.) THE appellant who is the same in both the appeals is M/s. S.L.S. Textiles Limited who are dealers in cotton yarn. The disputed turnovers in both the cases relate to inter -State sales of 'hank yarn in plain reels'. The assessing authority granted exemption on the said turnovers in view of the provisions of Notification No. II issued in G.O.Ms. No. 1067, Revenue (S) Department dated 19 -9 -1985 read with Sec. 8(2 -A) of the C.S.T. Act. The Deputy Commissioner, however revised the said assessment orders and withdrew the exemption granted on the disputed turnovers observing that the exemption available under the above said G.O. for local sales is not applicable to inter -State sales as the exemption given under the said G.O. is not general exemption but only conditional exemption. The appellant has therefore filed the present appeals questioning such orders of the revisional authority contending that the exemption contemplated in the above said G.O. is general exemption and not conditional exemption and that inter -State sales of hank yarn made by him are also eligible for exemption in view of the provisions of Sec. 8(2 -A) of C.S.T. Act. As both the Appeals are filed by the same appellant and as common point is involved for consideration, they are heard together and are being disposed of by a common order. The point for consideration in the present appeals is whether the exemption contemplated in G.O.Ms. No. 1067, Revenue (S) Department dated 19 -9 -1985 is general exemption and whether the disputed turnovers relating to inter -State sales of 'hank yarn in plain reels' are eligible for exemption?
(3.) THE appellant is a dealer in cotton yarn and during the assessment years 1989 -90 and 1990 -91 he effected inter -State sales of 'hank yarn in plain reels' and the disputed turnovers relate to such inter -State sales. The appellant claims exemption on such inter -State sales in view of the Notification No. II issued under G.O.Ms. No. 1067, Revenue (S) Department dated 19 -9 -1985 read with Sac. 8(2 -A) of the C.S.T. Act. Notification No. II issued under the said G.O. is as follows: NOTIFICATION -II "In exercise of the powers conferred by sub -section (1) of section 9 of the Andhra Pradesh General Sales Tax Act 1857 (Andhra Pradesh Act VI of 1957) the Governor of Andhra Pradesh hereby exempts with effect from the 13th September, 1985 from the tax payable under section 6 of the said Act the sales of hank yarn in plain reels to the registered dealers in the State or to the weavers, master weavers, cooperative societies or other recognised Associations of weavers for consumption in their industry in the State." Local sales of hank yarn in plain reels effected by the appellant in favour of the persons mentioned in the said Notification during the present assessment years are admittedly eligible for exemption under the said G.O. The appellant claims exemption on the inter -State sales of such hank yarn also under the same G.O. in view of the provisions of Sec. 8(2 -A) of the C.S.T. Act Sec. 8(2 -A) of the C.S.T. Act is has follows: Sec. 8(2 -A): - "Notwithstanding anything contained in sub -section (1A) of section 6 or sub -section (2) or clause (b) of sub -section (2) of this section, the tax payable under this Act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is, under the sales tax law of the appropriate State, exempt from tax generally or subject to tax generally at a rate which is lower than four per cent whether called a tax or fee or by any other name, shall be nil, or, as the case may be, shall be calculated at the lower rate. Explanation: - For the purpose of this sub -section a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at the specified stages or otherwise than with reference to the turnover of the goods." It is now admitted by both sides that if the exemption contemplated in the above said G.O. regarding sales of hank yarn in plain reels is to be considered as 'general exemption' as mentioned in explanation to Sec. 8(2A), the appellant will be eligible for exemption regarding the disputed turnover relating to inter -State sales of such hank yarn also. But while the appellant contends that such exemption contemplated in the above cited G.O. is general exemption, the contention of the Department is that it is a conditional exemption and as such the provisions of Sec. 8(2A) of C.S.T. Act are not applicable to the present case. Even in this regard the question whether the exemption contemplated under the above said G.O. is general exemption or conditional exemption pertains in this case only to sales effected to "registered dealers in the State" in as much as the exemption pertaining to sales to "weavers; master weavers, cooperative societies or other recognised associations of weavers for consumption in their industry in the State" can clearly be said to be conditional exemption. It is clear from a perusal of the orders of the Deputy Commissioner that he chose to treat the exemption contemplated in the above said G.O. as conditional exemption on the ground that the sales of hank yarn are specified to be only in favour of "registered dealers in the State" and as such the exemption cannot be treated as general exemption. During the course of arguments, the State Representative appearing for the Department has also submitted that the G.O. specifically contemplated sale of hank yarn to registered dealers in the State, that by so specifying the G.O. evidently does not contemplate granting of exemption to sales effected in favour of dealers other than registered dealers in the State (apart of course from the weavers, master weavers etc., as mentioned in the same G.O.) and that therefore the exemption contemplated in the above said G.O. is only conditional G.O. On the other hand, the contention of the appellant in this regard is that 'registered dealers in the State' mentioned in the G.O. refer to all registered dealers in the State, that the question of granting exemption for sales in favour of unregistered dealers does not arise and that in view of such circumstances the exemption contemplated in the said G.O. is to be treated as general exemption and not conditional exemption. Therefore, under these circumstances, it is to be seen whether the exemption contemplated in Notification -II under G.O.Ms. No. 1067, Revenue (S) Department dated 19 -9 -1985 regarding sales effected in favour of registered dealers in the State is to be considered as general exemption as contended by the appellant or is conditional exemption as contended by the Department. The learned Counsel for the appellant has tried to rely upon some decisions, which are to be discussed below, in support of his contention that the exemption contemplated in the above said G.O. with regard to sales of hank yarn in favour of registered dealers in the State is general exemption. But a perusal of the said decisions and the relevant provisions of the APGST Act and CST Act coupled with the circumstances of the present case clearly show that the exemption contemplated under the above said G.O. cannot be considered as general exemption.;


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