VIJAYALAKSHMI METAL MART Vs. STATE OF A.P.
SALES TAX TRIBUNAL
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R. Bayapu Reddy, Chairman -
(1.) THIS appeal is filed questioning the orders of the Appellate Deputy Commissioner (CT) Kakinada in Appeal No. VZM. 132/90 -91, dated 3 -9 -1991 by which the re -assessment orders of the assessing authority (Deputy Commercial Tax Officer M.G. Road (East) Vizianagaram) in G.I. No. 7032/88 -88, dated 9 -11 -1990 refusing to grant set off of the tax were confirmed. The appellant is a dealer carrying on business in aluminum goods. During the assessment year 1987 -88 he had purchased aluminum scrap and got manufactured the finished products by engaging the rolling mill of another person and sold the finished products within the State and claimed the set off of the tax paid on the purchase of the old aluminum scrap from the tax leviable on the sale of the finished products under G.O.Ms. No. 173, Revenue dated 13 -2 -1986. The assessing authority by his original assessment orders dated 15 -3 -1989 agreed with the contention of the appellant and granted set off of tax to a tune of Rs. 9,858/ - under the above said G.O. Subsequently the assessing authority however passed re -assessment orders dated 9 -11 -1990 under Sec. 14(4) by revising the original assessment orders and withdrew the set off of tax on the ground that the appellant is not the owner of rolling mill which had manufactured the finished products from out of the aluminum scrap and as such, he is not entitled to claim set off of tax under the above said G.O. The appellant preferred appeal before the Appellate Deputy Commissioner questioning the said orders of the assessing authority and the said appeal was dismissed. As such the present appeal is filed before this Tribunal contending that he is entitled for such set off and that the re -assessment orders are without jurisdiction and are not valid.
(2.) THE point for consideration is whether the appellant is entitled to claim set off of the tax due on the turnover of Rs. 1,37,875/ - relating to purchase of aluminum scrap from the tax leviable on the sale of the finished products and whether the re -assessment orders passed by the assessing authority are not valid and legal? The appellant had purchased aluminum scrap worth Rs. 1,37,875/ - and engaged rolling mill situated within the State for manufacturing finished products and sold such finished products within the State. The appellant claims set off of the tax paid on the purchase of aluminum ware from out of the tax payable on the sale of the finished products under G.O.Ms. No. 173 (Revenue) dated 13 -2 -1986 which was later on substituted by G.O.Ms. No. 575 (Revenue) (C -T -II) dated 9 -6 -1989 with effect from 15 -6 -1989. Under Notification -I of G.O.Ms. No. 173 Revenue dated 13 -2 -1986 the Government directed that where tax has been levied and collected under the A.P.G.S.T. Act in respect of sale or purchase inside the State of raw materials such as scrap of aluminum etc., referred in item 150 of the First Schedule of the Act, the tax leviable under the said Act on the circles and sheets or utensils manufactured from out of such scrap and old utensils by the composite rolling mills situated within the State and Sold inside the State shall be produced by the amount of tax levied and collected on such scrap and old utensils with effect from 1 -7 -1985. Notification -II issued under G.O.Ms. No. 173 dated 13 -2 -1986 is also to the same effect and applies to the manufacture and sale of utensils out of circles and sheets of aluminum etc., purchased within the State. The subsequent G.O.Ms. No. 575 Revenue dated 9 -6 -1989 which cams into effect from 15 -6 -1989 (the present assessment year in this case is 1987 -88) also contemplates similar reduction of tax regarding purchase of raw materials and sale of circles, sheets or utensils. The view of the lower authorities in this regard is that in order to claim such set off of the tax paid on the purchase of aluminum scrap, it is necessary that the manufacture and sale of the finished products shall be by the composite rolling mills situated within the State, in the present case the appellant is not owning any such composite rolling mill, and as such he cannot be said to have manufactured and sold the finished products and as such he is not entitled to claim the set off of the tax. On the other hand the contention of the appellant is that the above said G.O. contemplate only manufacture of finished products by the composite tolling mills; that the safe of such finished products need not be by such composite rolling mills, that the appellant engaged the services of such composite mills for manufacturing the finished products and sold such finished products within the State and that in view of such sale of the finished products by him within the State, he is entitled to claim set off. But such contention of the appellant cannot be accepted in view of the contents of the above said G.Os. As already stated above, the above said G.Os. contemplate manufacture of the finished products by the composite rolling mills and sale of such finished products by such mills. From a reading of the above said G.Os. it cannot be said for a moment that the sale of the products can be by a person not owning any composite rolling mill within the State and it cannot also be said that it is sufficient to comply with the provisions of the abovesaid G.Os. if a person engages the services of a composite rolling mill for hire for the purpose of manufacturing the finished products and later on himself sells the finished products within the State. It is clear from a perusal of the provisions of the said G.Os. that the manufacture as well as the sale of the finished products must be by the composite rolling mill situated within the State, and the set off can be granted only when such finished products are manufactured and sold by the composite rolling mills from out of the raw material purchased by such mills. Therefore, the lower authorities rightly refused to grant reduction of tax under the abovesaid G.Os. as claimed by the appellant.
(3.) THE appellant has also tried to contend in this appeal that the re -assessment orders passed by the assessing authority under Sec. 14(4) are without jurisdiction and are not valid and legal as such revision amounts to change of opinion as it is based only on the material available on record. He has also tried to rely upon the decision reported in M/s. Fatechand and Sons Vs. Commercial Tax Officer ( : 1983 -54 STC 166) in support of his contention in this regard. But such contention cannot be accepted in view of the facts of the present case. It is to be seen from the facts of this case that the original assessing authority granted set off of the tax due on the purchase of aluminum scrap from out of the tax payable on the sale of the finished goods by applying G.O.Ms. No. 173 Revenue dated 13 -2 -1986 without considering the question whether such G.O. in fact applied to the present facts. The present case is one in which the appellant did not own any re -rolling mill and hired such mill for manufacturing finished products. As such the said G.O. is not applicable to the present case. The assessing authority therefore subsequently chose to revise such orders by passing re -assessment orders under Sec. 14(4) and withdrew the set off granted earlier. Under such circumstances the assessing authority can be said to have jurisdiction to pass re -assessment order under Sec. 14(4). Therefore the contention of the appellant in this regard cannot be accepted and the re -assessment orders cannot be said to be invalid, illegal and without jurisdiction. In the result the appeal is dismissed.
Dictated to the Stenographer, transcribed by him and pronounced in the Open Court on this the 28th day of July, 1993.;
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