P.Venkatarama Reddi, J. - (1.) Adventures and innovations are the ways of some affluent tax payers. Revenue does not lag behind to combat and outwit them if possible. In this on-going race, who would be the ultimate loser or winner, it is often difficult to predict. The Courts would act as umpires and give their verdict. There would be further efforts on either side to find ways and means of getting over the adverse effects of such verdict. There will be resistance by the other side. That is how it goes on. Legislation is the potent weapon in the hands of Revenue and naturally, the Revenue would like to surge forward to draw out that potent weapon in its arsenal. Perhaps, the case on hand is a case of that kind and typical of that running feud.
(2.) The petitioner is a manufacturer and dealer in cement. It is common knowledge that the cement, barring some bulk supplies is ordinarily sold in packed condition. Either gunny bags or HDPE bags are used for packing the cement. Going by ordinary business practice and common sense, one does not think of purchasing the cement and bag separately. The agreement and the bargain would be for sale and purchase of cement in packed condition, that is to say, together with the container. Nevertheless, the petitioner wants to contend that cement and the bags used for packing were sold and billed for separately as the law does not prohibit it. The petitioner further contends that the factum of separate sale of packing material should not influence the tax rate on cement and that is the premise on which the entry 18 to the I Schedule is sought to be challenged by the petitioner. This move is considered to be an artificial tax avoidance measure and the respondents maintain that the Legislature wanted to resist such move by tightening the provisions of law in the A.P. General Sales Tax Act. By A.P.G.S.T. Amendment (Act No. 27 of 1996), the following Entry was substituted in the place of the then existing entry 'Cement'. 18. Cement: (a) where the sale price of Cement includes the value of packing material - At the point of first sale in the State -16 Ps. in rupee (b) Where the packing material and cement are sold separately and/or the sale price of cement does not include the value of packing material - At the point of first sale in the State - 20 Ps. in rupee.
(3.) The amendment to the said entry came into force with effect from 1-8-1996 i.e., the date on which the Ordinance No. 19 of 1996 was promulgated. Originally, the prayer in the writ petition was to restrain the respondents from enforcing the A.P. Ordinance No. 19 of 1996 "to the extent of additional rate of sales tax for cement wherein the bills are prepared for the packing material and cement sold in loose condition." After the Ordinance was replaced by the Act passed by the Legislature, the petitioner sought amendment of the prayer and it was allowed.;