Rajendra Babu, J. - (1.) The respondents are engaged in building of flats and houses for which purpose they buy materials such as sand, bricks and granite from persons other than registered dealers. These items have not suffered any sales tax.
(2.) The Assistant Commissioner of Commercial Taxes, Enforcement, called upon the respondents by a notice dated January 19, 1982 to appear before him with their accounts relating to purchase of raw materials effected by them commencing from April 1, 1977. The respondents sent a reply to him stating that they do not trade in any goods; that they construct and sell flats; that they are not registered dealers; that said purchases do not attract tax under S. 6-A of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as 'the Act'). Not being satisfied with the reply filed by the respondents, the Assistant Commissioner of Commercial Taxes issued a notice on March 22, 1982 under S. 28 of the Act calling upon the respondents to produce books of accounts and purchase bills and to file the details relating to the purchase of raw materials effected by them for the period commencing from April 1, 1977. Aggrieved by the said notice the respondents filed writ petitions under Art. 226 of the Constitution of India questioning the jurisdiction of the appellants to assess them under the Act.
(3.) Several contentions had been raised before the High Court such as discrimination between registered and unregistered dealers and that the respondents are not dealers and that in order to attract S. 6-A a dealer must have purchased goods from unregistered dealers and consumed such goods in the manufacture of other goods for sale or disposed of such goods either within or outside the State. The first two contentions stood rejected and that part of the order is not challenged before us. Therefore, we have to confine ourselves to the question whether the respondents who purchased goods from persons other than registered dealers fall within the scope of S. 6-A of the Act. Section 6-A of the Act reads as follows:- "6-A. Levy of tax on turnover relating to purchase of certain goods. Every dealers, who in the course of business - (1) purchases any goods (the sale or purchase of which is liable to tax under this Act) from a registered dealer in circumstances in which no tax is payable under S. 5 or under S. 6, as the case may be, or (ii) purchases any goods (the sale or purchase of which is liable to tax under this Act) from a person other than a registered dealer, and (a) either consumes such goods in the manufacture of other goods for sale or otherwise, or (b) disposes of such goods in any manner other than by way of sale in the State, or (c) despatches them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce, shall pay tax on the turnover relating to purchase aforesaid at the same rate at which but for the existence of the aforementioned circumstances, the tax would have been leviable on such goods under S. 5 or S. 6." ;