Mrs. Sujata V. Manohar, J. - (1.) Leave granted in S. L. P. (C) No. 14547 of 1992.
(2.) Appellant No. 1 is a registered dealer under the Andhra Pradesh General Sales Tax Act, 1957. The appellant is a dealer in iron and steel. It purchases iron and steel scrap and ingots in the State of Andhra Pradesh. Iron and steel scrap and ingots are sent by the first appellant to its re-rolling mill which is situated in the State of Karnataka. The raw material is re-rolled into rounds and flats in the re-rolling mills of the appellant. The re-rolled products are brought back to Andhra Pradesh and are sold in Andhra Pradesh.
(3.) The iron and steel scrap and ingots which are purchased by the appellants are subject to tax in the State of Andhra Pradesh under the Andhra Pradesh General Sales Tax Act, 1957. Under an exemption notification issued under the Andhra Pradesh General Sales Tax Act, 1957 bearing G. O. Ms. No. 88 Revenue, dated 28-1-1977 which came into effect from 1st of April, 1976 re-rolled finished products of steel sold in Andhra Pradesh were made exempt from tax payable under the Andhra Pradesh General Sales Tax Act provided tax had already been levied under the said Act on the sale or purchase of any of the materials specified in Item 2 of Schedule III to the said Act which included the raw material purchased by the assessee. The relevant text of the exemption notification as amended by G.O. Ms. No. 2458 Revenue, dated 3-6-1980 and in force retrospectively from 1st of April, 1976 is as follows:- "In exercise of the powers conferred by sub-section (1) of Section 9 of A.P.G.S.T. Act, 1957 (Act VI of 1957) the Governor of Andhra Pradesh hereby makes an exemption with effect from 1st of April, 1976, the re-rolled finished products of steel re-rollers from the tax payable under the said Act, subject to the condition that the tax has been levied under the said Act on the sale or purchase of any of the material specified in Item 2 of Schedule III to the said Act,";