E.S.P.I. INDUSTRIES AND CHEMICALS PRIVATE LIMITED Vs. STATE OF ANDHRA PRADESH
SALES TAX TRIBUNAL
E.S.P.I. Industries And Chemicals Private Limited
STATE OF ANDHRA PRADESH
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M.Ramakrishna, Chairman -
(1.) THIS appeal is preferred against the orders passed by the Appellate Deputy Commissioner (CT) Secunderabad Division, Hyderabad in Appeal No. 53/91 -92, Dated 20.3.1995 whereby he dismissed the appeal confirming the orders passed by the Commercial Tax Officer, Tarnaka Circle, Secunderabad in Asst. No -/88 -89(APGST), dated 28.11.1990. The assessment relates to 1988 -89. The appellant M/s. E.S.P.I. Industries and Chemicals (Private) Limited is the manufacturer of fine chemicals and branded pharmaceutical products. The disputed turnover is Rs. 85,086/ - and tax due on the disputed turnover is Rs. 6,082/ -. It relates to purchase of water from Hyderabad Water Works Department for use in manufacture of fine chemicals. Relying upon the decision of the Tribunal reported in, 6 APSTJ 264 in the case of the Andhra Pradesh Paper Mills Limited and Sirpur Paper Mills limited v. The State of Andhra Pradesh, it is contended by the learned authorised representative that the said turnover is entitled for exemption because the appellant purchased the water in the process of manufacturing, it is entitled for exemption as it purchased the water from Hyderabad Water Works Department. The Government is also a registered dealer and therefore the levy of tax under Section 6A of the APGST Act is not correct. On the other hand, the learned State Representative has relied on the orders passed by the lower authorities. The point for consideration is whether the purchase of water is not at all liable to tax under Section 6A of APGST Act.
(2.) AS regards the decision relied upon by the learned authorised representative of the Sales Tax Appellate Tribunal in T.A. No. 798/92, dated 5.7.1993 by the then Chairman Sri R. Bayapu Reddy, as he then was, wherein while considering the contention of the assessee in that appeal relating to Rs. 24,652/ - as regards water purchased from Hyderabad Water Works Department which is not liable for tax under Section 6A. In that case the Tribunal observed that it is no doubt true that the purchase of water from M/s. Hyderabad Water Works Department but such purchase cannot be said to have been consumed in the manufacture of any goods as contemplated under section 6A of the APGST Act. The appellant is a hotel having lodging as well as boarding facilities and most of the water purchased by it will be used by the customers for bath etc. As such, the water purchased by the appellant cannot be said to have been consumed in the manufacture of any goods and as such Sec. 6A cannot be attracted for subjecting the turnover to purchase tax. In, 19 APSTJ 194 in Hindusthan Zinc Limited, Visakhapatnam v. The State of Andhra Pradesh, this Tribunal considered the question as to whether the purchase of water by the appellant from Municipal Corporation of Visakhapatnam is exigible to tax under Section 6A of the APGST Act. Held, that the provisions of clause (a) of Section 6A were amended w.e.f. 1.7.1985 introducing the words "or consumed them otherwise" which were not there prior to such amendment. Water purchased by the appellant from the Municipal Corporation for purpose of cooling its manufacturing equipment and as such it can be said to have been "consumed otherwise". As regards the other contention, the Tribunal held that Section 2(1)(e) as emended w.e.f. 1.7.1985 defines "dealer" as meaning any person who carries on the business of buying, selling etc., Clause (i) of Section 2(e) provides that local authority is also included in such definition of "dealer". The Municipal Corporation is a local authority and as such it is to be considered as a dealer. But its main activity is not doing any business as its purpose and activities are only to serve the public. Therefore, in as much as the Municipal Corporation is not exigible to tax on the sale of water, the appellant, who has purchased the water from the Municipal Corporation is exigible to tax under Section 6A.
(3.) IN the instant case, the appellant has purchased, water from M/s. Hyderabad Water Works Department. That being so, the ratio laid down in the said Tribunal decision squarely applies to the facts of the present case also in as much as the appellants herein has purchased water to the tune of Rs. 85,056 and the said water was being used by it in the process of manufacturing. Therefore, we do not find any merits in the contention of the appellant in that regard.;
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