P.VENKATARAMA REDDI, J. -
(1.)THE constitutional validity of explanations (a) and (b) to the Sixth Schedule of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as "the APGST Act"), introduced by section 15 of the A. P. Act 25 of 1988 with effect from July 8, 1983, is under challenge in this batch of writ petitions filed by the dealers in liquor. A. P. Act 25 of 1988 came into force from September 6, 1988. In some of the writ petitions, the orders passed by the Joint Commissioner of Commercial Taxes (Legal) revising the order of the Appellate Deputy Commissioner relating to assessment year 1983-84 as a sequel to A. P. Act 25 of 1988 have also been assailed.
(2.)THE undisputed facts are that the petitioners held at the relevant point of time two licences under the A. P. Excise Act, 1968, read with A. P. Foreign Liquor and Indian Liquor Rules, 1970 - one was wholesale licence known as FL 15 licence and the other was retail licence known as FL 24 licence. The wholesale licence-holder was authorised to import liquor and beer from outside the State on which the licensee pays the prescribed countervailing duty. The holder of licence in form FL 15 is permitted to sell liquor in quantities of not less than 9 litres in sealed or capsuled bottles at any time and in any single transaction to licensees holding the licences in form FL 24 (retail licence), FL 17 (bar licence), etc. He is not permitted to carry on retail sale or allow consumption of liquor in the licensed premises (vide rule 23 of the A. P. Foreign Liquor and Indian Liquor Rules, 1970 ). The retail licence holder in form FL 24 is permitted to sell liquor obtained only from the wholesale licensees. Prior to July 8, 1983, beer and liquor were exigible to tax under items 25 and 26 of the A. P. General Sales Tax Act at the point of first sale in the State. By A. P. Ordinance 19 of 1983, items 25 and 26 were removed from the First Schedule. By the said Ordinance, the taxation of liquor and country liquor (which includes beer as per the definition) was dealt with by the newly introduced provision, viz. , section 5 (2) (d) read with the Sixth Schedule to the Act. Section 5 (2) (d) lays down that in the case of the goods mentioned in the Sixth Schedule, tax under the APGST Act shall be levied at the rates and at the points specified as applicable thereto in the Sixth Schedule. Sub-section (2) of section 5 was in force up to March 29, 1989, on which date the said sub-section was merged into sub-section (1) which is the charging provision for all the goods mentioned in the Schedule. The Sixth Schedule as introduced by A. P. Ordinance 19 of 1983 together with the explanations thereto is extracted hereunder :
" SIXTH SCHEDULe Goods in respect of which tax is leviable under section 5 (2) (d) : ------------------------------------------------------------------------ Description of Point of levy Rate of tax the goods ------------------------------------------------------------------------ (1) (2) (3) ------------------------------------------------------------------------ 1. Country (a) At every point of sale 10 paise in the liquor. other than at the point rupee. of last sale in the State. (b) At the point of last 5 paise in the sale in the State rupee. 2. All liquors (a) At every point of sale 25 paise in the other than other than at the point rupee. country of last sale in the State. liquors. (b) At the point of last 5 paise in the sale in the State. rupee.
Provided that at any point of sale other than the first point of sale and the last point of sale, the turnover of the goods liable to tax shall be arrived at by deducting the turnover of such goods on which tax has been levied at the immediately preceding point of sale.
Explanation I.- In this Schedule 'country liquor' means 'liquor' manufactured in India, other than liquor manufactured and compounded in India and coloured and flavoured to resemble gin, brandy, whisky, vodka, wine or rum imported from outside the territory of India.
Explanation II.- The point of last sale mentioned in this Schedule shall be the sale by a dealer holding a licence other than a wholesale licence under rule 23 of the Andhra Pradesh (Foreign Liquor and Indian Liquor) Rules, 1970. In the case of a dealer holding a wholesale-cum-retail licence, it shall be his sale to individual consumer as specified in the said rule. "
The Ordinance was replaced by A. P. Act 11 of 1984 which came into force from July 8, 1983. Sub-section (1) of section 40 confers power on the State Government to alter, add to or cancel any of the Schedules by means of a notification. In exercise of the said power, the State Government issued G. O. Ms. No. 376, Revenue (CT) Department, dated April 25, 1987 amending, inter alia, the Sixth Schedule to the APGST Act with effect from May 1, 1987. The amendments are to the following effect :
In the Sixth Schedule to the APGST Act, for items 1 and 2, the following item and entries relating to rates are substituted :
" All liquors (a) At every point of sale 25 paise in the other than other than at the point rupee. toddy and of last sale in the State. arrack. (b) At the point of last 5 paise in the sale in the State. rupee. "
Explanation I was omitted.
As a result of omission of explanation I, explanation II became the only "explanation" to the Schedule. In the explanation, the second sentence, namely, "in the case of a dealer holding a wholesale-cum-retail licence, it shall be his sale to individual consumer as specified in the said rule" was omitted. The gist of the amendment brought about by G. O. Ms. No. 376 was to place all liquors including beer in one entry which attracts tax at 5 per cent or 25 per cent depending upon whether it is a last point sale or a sale at other points. The rate of tax on beer which was hitherto levied at 10 per cent was stepped up to 25 per cent. Toddy and arrack were excluded from the Sixth Schedule. In the explanation, the term "last point sale" underwent slight change by deletion of the second sentence. This deletion was necessitated by reason of the discontinuance of wholesale-cum-retail licence by the rules framed under the A. P. Excise Act with effect from October 1, 1983. This change is not material for the purpose of this case because the petitioners did not at any time hold wholesale-cum-retail licence.
(3.)THE next development in the legislative history which is to be mentioned in G. O. Ms. No. 100 dated February 5, 1988. This G. O. was again issued by the Government in exercise of the Powers conferred by sub-section (1) of section 40 of the APGST Act. The reason for issuing this G. O. invoking once again the power under section 40 (1) of the APGST Act is to provide for continuity of levy and collection of tax on the commodities concerned, in terms of the amendments brought about by G. O. Ms. No. 376, Revenue (CT) Dept. dated April 25, 1987 and certain other G. Os. amending the Schedules. It appears, a Bill, APGST (Fourth Amendment) Bill, 1987 (L. A. Bill 46 of 1987) incorporating the amendments made by G. O. Ms. No. 376, etc. , was introduced in the Legislative Assembly on August 10, 1987, but it was not passed by the Legislature and hence it did not become the Act. As a result of this situation, the earlier notification issued under section 40 (1) (G. O. Ms. No. 376) and the Bill introduced on August 10, 1987, ceased to have effect by virtue of sub-section (2) of section 40 and the provisos thereto. Hence G. O. Ms. No. 100 was issued to maintain continuity in levy. The said G. O. did not bring about any material change vis-a-vis the Sixth Schedule to the APGST Act. The Schedule as amended by G. O. Ms. No. 376 therefore held the field even after the issuance of G. O. Ms. No. 100 dated February 5, 1988.