Decided on March 15,1963



CHANDRA REDDY, C.J. - (1.) THE problem that is posed by this revision is whether an assessee falling under section 8(2) of the Central Sales Tax Act, 1956, is entitled to the benefit of the exemption granted under Notification No. 2328 dated 13th December, 1957, issued by the State Government in exercise of the powers conferred under section 9(1) of the Andhra Pradesh General Sales Tax Act, 1957.
(2.) THE question arises in the following circumstances. The assessee, a dealer in handloom cloth, submitted his return for the assessment year 1957-58 disclosing a turnover of Rs. 1,27,516-7-9 and claiming exemption from payment of tax in regard to the turnover for the period between 14th December, 1957 (when the abovementioned notification came into effect) and 31st March, 1958. The turnover involved in this period is a sum of Rs. 58,312-1-9. This turnover consists of inter-State sales and consequently, the transactions are governed by the provisions of section 8 of the Central Sales Tax Act, 1956. As the question to be answered by us depends on the construction to be put on section 8, it is useful to read it here. It reads : "(1) Every dealer who, in the course of inter-State trade or commerce sells to a registered dealer goods of the description referred to in sub-section (3) shall be liable to pay tax under this Act, which shall be one per cent. of his turnover." We are unconcerned with the proviso and, therefore, we will omit it here. "(2) The tax payable by any dealer in any case not falling within sub-section (1) in respect of the sale by him of any goods in the course of inter-State trade or commerce shall be calculated at the same rates and in the same manner as would have been done if the sale had, in fact, taken place inside the appropriate State, and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be so liable under that law." The other provisions of section 8 are unnecessary for the present enquiry and so we do not propose to extract them here. We are here concerned only with sub-section (2) as, admittedly, the petitioner in this case sold goods to unregistered dealers and as such he could not claim the advantage of sub-section (1). Hence, he is governed by sub-section (2).
(3.) THE argument raised by Sri Krishnamurthy, learned counsel for the petitioner, on the language of this sub-section is that from 14th December, 1957, handloom goods in which the assessee was dealing are exempt from payment of tax under the notification issued by the Government on 13th December, 1957, and that this exemption should be extended to him. Before we consider the content of the fiction created by sub-section (2), we have to turn our attention to the notification in question, which is the source of the claim for exemption. It reads : "In exercise of the powers conferred by sub-section (1) of section 9 of the Andhra Pradesh General Sales tax Act, 1957 (Andhra Pradesh Act VI of 1957) (hereinafter referred to as the said Act), the Governor of Andhra Pradesh hereby exempts from the tax payable under the said Act, with effect on and from the 14th December, 1957, the sale or purchase of any of the goods appended hereto * * * Appendix (1) All varieties of textiles, viz., cotton, woolen or silken including rayon art silk or nylon, whether manufactured by handloom, powerloom or otherwise; * * * * " ;

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