S M PALANIAPPA DEVAR AND SONS TIRUPATHI Vs. COMMERCIAL TAX OFFICER TIRUPATHI
LAWS(APH)-1972-3-13
HIGH COURT OF ANDHRA PRADESH
Decided on March 06,1972

S M PALANIAPPA DEVAR AND SONS TIRUPATHI Appellant
VERSUS
COMMERCIAL TAX OFFICER TIRUPATHI Respondents

JUDGEMENT

SRIRAMULU,J. - (1.) FOR the assessment year 1965-66, the Commercial Tax Officer, Tirupathi, determined the net taxable turnover of the petitioner at Rs. 4,79,136. 26, of which Rs. 4,66,181. 21 represented the turnover of watery coconuts and, on that turnover, levied the tax in accordance with the rates specified in the Andhra Pradesh General Sales Tax Act (hereinafter called the "principal Act" ). Against the said order, the petitioner filed Writ Petition No. 2159 of 1966 in this court on 28th December, 1966, contending that watery coconuts being "declared goods" were not exigible to tax as they were not included in the Third Schedule to the principal Act. Accepting that contention, this court, by its order dated 19th December, 1970, set aside the assessment on watery coconuts and re-fixed the net taxable turnover at Rs. 12,955. 05 and the tax payable thereon at Rs. 411. 47 as against the tax of Rs. 9,731. 82 already paid by the petitioner. The amount of excess tax of Rs. 9,320. 35, which was already paid by the petitioner, was directed to be refunded and, accordingly, it was refunded to the petitioner.
(2.) THE controversy whether watery coconuts were "oil-seeds" or not, has been set at rest by the order of this court in Writ Petition No. 1196 of 1965, since reported in 28 S. T. C. 110 (Tagoob Mohammad of Kanchili v. The Commercial Tax Officer, Srikakulam ). Following that decision this court in Writ Petition No. 337 of 1967 held that watery coconuts were not liable to be taxed for the assessment year 1964-65, since watery coconuts were not included in Schedule III containing the list of "declared goods" exigible to tax. Following the said decision, the contention of the petitioner in regard to the assessment year 1965-66 was accepted by this court in Writ Petition No. 2159 of 1966, and in pursuance of the order of this court, the Commercial Tax Officer refunded the amount of excess tax already paid by the petitioner. In order to get over the above decisions, the State Government amended the principal Act by enacting the Andhra Pradesh General Sales Tax (Amendment) Act, 1971 (hereinafter referred to as the "amending Act" ). The Amending Act received the Governor's assent on 17th April, 1971, and has come into force on 19th April, 1971. The Commercial Tax Officer, applying the provisions of the Amending Act, issued notice dated 20th July, 1971, to the petitioner purporting to reopen the assessment for the assessment year 1965-66 by levying tax on the turnover of watery coconuts of Rs. 4,66,181. 21. The petitioner then approached this court by this writ petition filed under article 226 of the Constitution of India, seeking the issue of a writ of prohibition, prohibiting or restraining the Commercial Tax Officer from revising the assessment as proposed in the said notice. Meanwhile, the Commercial Tax Officer, by his order dated 1st September, 1971, revised the assessment as proposed in the notice, by including the turnover of watery coconuts of Rs. 4,66,181. 21, which was excluded by the order of the High Court dated 19th December, 1970, passed in Writ Petition No. 2159 of 1966. The petitioner then filed W. P. M. P. No. 737 of 1972 for amendment of the writ petition by seeking a writ of certiorari for quashing the re-assessment order passed by the Commercial Tax Officer on 1st September, 1971. We have, by our order of even date, allowed the amendment. The learned counsel, Sri S. Dasaratharama Reddy, appearing for the writ petitioner, challenged the legality and validity of the revised assessment on the following three grounds : (1) since the Amending Act derogates the powers of the High Court and endangers its position, which it is designed to fill under the Constitution, it should not have been assented to by the Governor of Andhra Pradesh, but should have been reserved for the consideration of the President of India. Having not done so, the Amending Act is ultra vires of the Constitution and void; (2) since section 6 of the Amending Act has not been made retrospective even after the passing of the said Act, the Legislature cannot be said to have achieved the purpose of making the assessment or reassessment for an anterior period. Although the Legislature may have had the intention to validate the assessments previously made and to make assessments or reassessments, that object has not been achieved by the Amending Act, in view of the language used in sections 6 and 7 of the said Act. Sections 7 and 8 of the Amending Act are, therefore, bad in law and a reassessment under section 8 cannot, effectively, be made; and (3) section 8 (1) of the Amending Act does not enable the Commercial Tax Officer to revise the assessment when it is merged into the order of the High Court. Mr. Sastri, the learned Advocate appearing for the Government, on the other hand, contended that the Amending Act has not encroached upon the judicial powers of the High Court. On the other hand, it has followed the law settled by the High Court. The Legislature is competent to authorise the revision of assessments which were set aside in appeals or writ petitions, in view of the clear language of section 7, which starts with a non obstante clause. The proviso to article 200 of the Constitution is not attracted at all in this case and, therefore, the Bill did not require to be reserved for the President's assent. It is now well-settled that the Legislature is competent to re-enact with retrospective effect the provisions held ultra vires by the High Court after removing the defect. The powers to validate the assessments or orders which, though initially invalid, are valid in the light of the provisions of the Amending Act is also conceded to the Legislature. The contention of the petitioner that, in the absence of retrospective effect given to section 6 of the Amending Act, no reassessment for an anterior period can be made, is misconceived. The section, read with the schedule, expressly and clearly gives retrospectivity extending to a particular period in regard to the levy of tax on watery coconuts.
(3.) THE general scheme of taxation envisaged under the Sales Tax Act is to levy multiple tax on each transaction of sale and purchase of goods. But this general scheme is subject to certain exceptions, one to be found in section 5 (2) and the other in section 6 of the principal Act. Section 5 (2) (a) of the principal Act lays down the rates of tax and only at the point of sale effected in the State by a dealer, on his turnover of sales of goods mentioned in Schedule I, irrespective of the quantum of turnover. Similarly, section 5 (2) (b) of the principal Act lays down the rates of tax at the point of purchase effected in the State of the goods mentioned in Schedule II, on his turnover of purchase of such goods, irrespective of the quantum of turnover. Section 6 of the principal Act is the- charging section in respect of "declared goods", in respect of which a single point tax is levied, either at the point of sale or purchase, as mentioned against each of the items of goods mentioned in Schedule III. Watery coconuts were included as item 10 in Schedule II and were taxed at the rates and at the points specified therein.;


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