BALAJI RATANLAL MITAI BHANDAR Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THIS appeal has been preferred by M/s. Balaji Ratanlal Mitai Bhandar, Hyderabad, aggrieved by the orders passed by the Appellate Deputy Commissioner (CT), Secunderabad, dated 16.11.2000. The appellant deals in sweets and kara. They are assessees on the rolls of Commercial Tax Officer, Barkatpura Circle, Hyderabad. The C.T.O., after verifying the books of accounts issued show cause notice to the appellant and after hearing the Authorised Representative of the assessee levied tax U/s. 6A(1) of the APGST Act, 1957 on the turnover of the milk purchased by the appellant from M/s. Pancharatan Dugothalaya. The following is the final assessment of the appellant.

(2.) AGGRIEVED by the above orders, the present appeal has been preferred before this Tribunal. In the grounds of appeal, it has been briefly contended as follows. The C.T.O., erred in levying tax on the purchase of milk. These purchases were made by local registered dealers. As the selling dealers enjoy the benefit of sales tax exemption under G.O. Ms. No. 1091, dated 10.6.1957, consequently, the appellant who purchased milk from them is also entitled to such exemption since the appellant is converting the said milk into curd which has been sold to the local consumers. It is further contented that milk and curd are one and the same. Milk, curd, milk products and even Kulfi are exempted items from tax as held by the Hon'ble High Court of Andhra Pradesh reported in, 43 STC 374. As the appellant used the milk for preparation of curd, the provision of Sec. 6A does not apply. The appellant has effected the purchases of milk from local registered dealer and utilized the same for manufacturing finished products i.e., sweets which are being assessed to tax at different rates for different periods. The appellant is liable to pay tax only on the sweets manufactured out of such milk which has been purchased from local registered dealers and so it is liable to tax if the milk is purchased from unregistered dealer and used the same for manufacture of sweets. Hence, the appeal is liable to be allowed.

(3.) ON the other hand, the learned State Representative contended that only the seller of the fresh milk is exempted from the purview of taxation under G.O. Ms. No. 1091, but not the subsequent dealers who converts the same into other products.