- (1.) THIS Special Appeal is preferred, under Section 23(1) of the APGST Act, by the appellant -dealer aggrieved by the order of the Commissioner of Commercial Taxes dated 26.02.2002 revising the order of the Deputy Commissioner (CT), Hyderabad dated 17.01.1999, and the order of the Commercial Tax Officer, Mancherial dated 20.03.1998.
(2.) FACTS , to the extent necessary, are that the appellant herein manufactures cement, and is a registered dealer under the APGST Act. They are assessees on the rolls of Commercial Tax Officer, Mancherial who finally assessed them to tax, for the assessment year 1994 -1995 under the APGST Act, exempting the turnover of Rs.3,59,25,700, relating to the corresponding sale value of HDPE bags, from tax holding that it was not the first sale within the State, as the HDPE bags had earlier suffered tax in the State of Andhra Pradesh. The said assessment order was revised by the Deputy Commissioner (CT), Hyderabad on 07.01.1999 levying tax on the self consumption of cement and steel, subjecting them to tax at 4%. The Deputy Commissioner (CT), however, did not revise the order of the Commercial Tax Officer granting the appellant exemption on the turnover relating to the sale of packing material i.e HDPE bags. After the Deputy Commissioner (CT) passed the revision order dated 07.01.1999, a revised assessment order, along with the demand notice, was served on the appellant on 27.01.1999.
(3.) THE Commissioner, Commercial Taxes found the orders of the Commercial Tax Officer and the Deputy Commissioner (CT) to be incorrect and prejudicial to the interests of the revenue. On the ground that the Commercial Tax Officer had not correctly analysed the facts, before granting exemption on the turnover of HDPE/Gunny bags as secondary sale of packing material, the Commissioner, Commercial Taxes exercised the powers vested in him under Section 20(1) of the APGST Act, and issued a show cause notice to the appellant proposing to assess the turnover of HDPE/Gunny bags to tax at 13.80%. The show cause notice dated 30.11.2001 records the tentative opinion of the Commissioner that the appellant had sold cement packed either in gunny bags or HDPE bags; cement was a product which was not sold naked or in a loose manner in the market; the price of cement as understood by the consumer, and for which payment was made by them, is for a bag of cement, and not exclusively for cement or for the gunny bag; the transaction of sale of cement, and the sale of its container, were integral components of a single transaction; HDPE bags were primary packing material for sale of cement; sale of cement could not be visualised without the HDPE bag; the property in the HDPE bag, along with its contents i.e cement, was passed on to the consumer, and not separately; there was no agreement, either implied or express, between the seller and buyer for sale of the HDPE bag independent of the sale of cement; and these facts showed that the transaction was a composite and integrated transaction of sale of cement and the HDPE bag. A copy of show cause notice was served on the appellant on 05.12.2001.;