Full Judgment Text
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CASE NO.:
Appeal (civil) 6362 of 1998
PETITIONER:
I.T.C. AGRO TECH LTD.
RESPONDENT:
COMMERCIAL TAX OFFICER AND ORS.
DATE OF JUDGMENT: 25/07/2001
BENCH:
S.P. BHARUCHA & Y.K. SABHARWAL & BRIJESH KUMAR
JUDGMENT:
JUDGMENT
2001 Supp(1) SCR 18
WITH
C.A Nos. 6363-73/98, 1862, 3681, 4049-4052, 4615-4620, 4584-4586/ 99, 4664 and 4665 of 2001
The Judgment of the Court was delivered by
BHARUCHA, J. Leave granted in the special leave petitions.
These appeals call for the interpretation of Entry 24-B of the First
Schedule to the Andhra Pradesh General Sales Tax Act, 1957.
The controversy would be clearer if both Entries 24-A and 24-B are
reproduced. They read thus:
SI. Description of Goods Point of Rate of Effective
No. Levy Tax from
24-A Vegetable oils (non-refined) At the 2 Paise 16.8.95
including groundnut, palm oil, point of in rupee
sunflower oil, soya bean oil, first sale
mustard oil, kusum oil, tobacco in the
seed oil, castor oil, washed cotton State
seed oil other than rice bran oil
and coconut oil (1204)
24-B Vegetable oil (refined) obtained -do- -do- 16.8.95
from non-refined oil mentioned
in item 24-A other than rice bran
oil (1205)
The Government of Andhra Pradesh issued a circular on 16th September, 1997
in regard to Entry 24B. It said: "Since there is a specific mention of the
non refined oils which are linked to refined oils in item 24-B the only
interpretation that can be offered is that the concessional rate of 2% is
applicable only to those oils which are obtained from non refined oils
subject to tax under Entry 24-A of 1st Schedule. Imported refined oils are,
therefore, taxable at 10% under VII Schedule." The same interpretation was
reiterated on 10th November, 1997 by the office of the Commissioner of
Commercial Taxes.
The two circulars aforementioned and assessments on that basis were
impugned in writ petitions filed before the High Court of Andhra Pradesh.
The two circulars were struck down, and there is no challenge to that part
of the order. However, the High Court went on to interpret Entries 24-A and
24-B and said, "Item 24-B lays down that all refined vegetable oils
obtained from non-refined oil mentioned in item 24-A other than rice bran
oil are subject to tax at the rate of 2% So, there is a condition laid down
that only those refined vegetable oils are taxable at 2% which have
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suffered tax in the non refined capacity under item 24-A Those refined
vegetable oils which have not suffered tax under item 24-A have been
excluded from the application of 24-B." This interpretation of Entry 24-B
of the High Court is impugned in the appeals before us.
Learned counsel for the appellants stressed the word ’mentioned’ used in
Entry 24-B and submitted that it only signified that Entry 24-B applied to
all vegetable oil (refined) that were obtained from non-refined oil of the
kind described in Entry 24-A. The word ’mentioned’ could not be equated
with the words ’that has suffered tax’ under Entry 24-A. Our attention was
drawn to the fact that where the intention was to apply an entry in the
Schedule only to articles that had suffered tax under the Act, the entry so
stated: as for example. Entry 158, which read. "Betel-nut powder obtained
from arecanut that has met tax under this Act". It was also pointed out
that the very Entry 24, before it was amended, had used the words ’if it
had met tax under the Act’ and these words did not occur in the amended
Entries 24-A and 24-B.
Learned counsel for the State supported the decision of the High Court and
submitted that, given the words of Entry 24-B, only that vegetable oil
(refined) which was obtained from non-refined oil that had suffered tax
under Entry 24-A could be taxed at the rate of two per cent. Vegetable oil
(refined) obtained from non- retained oil which had not suffered tax under
Entry 24-A fell within the residuary entry of the Schedule and was liable
to tax at the rate of ten per cent.
In our view, the words used in Entry 24-B plainly indicate that it is
applicable to all vegetable oil (refined) that is obtained from the kinds
of non-refined oil that are described in Entry 24-A, that is, from non-
refined oil other than rice bran oil. The word ’mentioned’ only means"
described" or "set forth" and no more. There was. therefore, no
justification for the conclusion that only vegetable oil (refined) obtained
from non-refined oil that had been subjected to tax under Entry 24-A could
be taxed at the rate of 2 paise Further, where the Schedule intended to
refer to goods which were made from inputs that had suffered tax under the
Act the Schedule so stated. Yet again, the fact that before its amendment,
Entry 24 had used the words ’if it had met tax under the Act’ and these
words were omitted after the amendment shows that the construction that we
have placed upon Entry 24 B is correct. In this view of the matter, the
civil appeals are allowed. The judgments and orders under challenge are set
aside. The orders of assessment made on the basis of the interpretation
placed by the State on Entry 24-B are set aside."
Having regard to the relief so granted, the State shall refund to the
appellants the sums deposited by them as a condition of stay. This shall be
done within twelve weeks.
The respondents shall pay to the appellants the costs of the appeals.