P. VENKATARAMA REDDI, J.

( 1 ) THE conflicting decisions of the Supreme Court on the point at issue has given rise to this Full Bench reference. The primary question that has to be resolved by this Full Bench is whether the old and discarded newspapers sold from time to time by the appellant, who is a newspaper publisher, attract tax under the A. P. General Sales Tax Act (hereinafter referred to as the act ). Newspapers as such are not liable to be taxed under the Act in view of the exclusionary provision contained in Entry 54 of List II of the VII schedule. The controversy, however, is whether the old and accumulated newspapers which, when sold, are not utilised for reading purpose, but used for packing and other purposes could still be regarded as newspapers within the meaning of Entry 54 of List II. As against the direct authority of the Supreme Court in the case of Indian Express (P) Ltd. v. State of Tamilnadu, 67 STC 474 to the effect that old newspapers cannot be treated as newspapers to enjoy the immunity from tax, we have the later decision of the Supreme Court in Sait Rikhaji Furtarnal v. State of Andhra Pradesh, 85 STC 1 which merely followed the purported reasoning adopted in A. I. R. Karamchari Sangh v. A. I. R Ltd, 70 STC 349 though it determined an altogether different point concerning a labour welfare legislation. Faced with these divergent decisions, the Division Bench consisting of M. N. Rao, J. (as he then was) and Rangarajan, J. felt that it is a fit case to be decided by a larger Bench. That is how this appeal is before us.

( 2 ) BEFORE we take up the point for consideration, we would like to state a few relevant facts. This appeal under Section 23 of the A. P. G. S. T. Act arises out of the order of the Commissioner of Commercial Taxes passed in exercise of his revisional power under Section 20 (1) of the Act. For the assessment year 1989-90, the petitioner which is a Newspaper publisher and a registered dealer under the Act was subjected to tax on a turnover of Rs. 38,05,317. 00. This turnover represents sales of old and discarded newspapers and some other waste paper and waste materials. On appeal, the Appellate Deputy Commissioner set aside the assessment on the disputed turnover of Rs. 36,58,290. 00. The sales of old newspapers were held to be not liable to tax, following the decision of the Supreme Court in Salt Rikhaji case (supra ). As far as the sales of waste paper is concerned, the appellate authority held that by virtue of G. O. Ms. No. 130 (Revenue) dated 14-2-1989, the turnover was exempt from tax. The Commissioner of Commercial Taxes, by the impugned order bearing the date 20-11-1995. set aside the order passed by the appellate authority and restored the original assessment order passed by the Commercial Tax Officer. The Commissioner followed the decision of Supreme Court in Indian Express case (supra) which, according to him, was a more direct case. As regards the waste paper, the Commissioner held that the exemption G. O. had no application. It is this order of the Commissioner which is challenged in this Special Appeal.

( 3 ) IN Indian Express case (supra) an identical question arose for consideration before the Bench of Supreme Court consisting of R. S. Pathak and Sabyasachi Mukharji, J J. On the same day, another Division Bench of the Supreme Court comprising R. S. Pathak. C. J. and Venkatachalaiah, J. followed the said judgment and confirmed the Madras High Court s decision reported in 41 STC 105 (vide The Hindu v. State of Tamilnadu. 67 STC 477.

( 4 ) IN Indian Express case (supra) their Lordships observed :"in this appeal, learned Counsel for the appellant contends that when the surplus copies of the newspapers were sold they possessed the character of newspapers and were, therefore, exempt from sales tax. It seems to us clear that when newspapers are sold to the reading public they are sold as a medium containing information regarded as news. They are purchased by members of th

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