SYED SHAH MOHAMMED QUADRI, J.

( 1 ) THE Division Bench which dealt with this case, having regard to the contentions raised before it about the competence of the State Legislature to impose sales tax : (a) upon "pan masala" and "gutka"; and (b) at the rate exceeding 4 per cent, referred the case to a Full Bench. Accordingly the matter has come up before us.

( 2 ) THE petitioner, a company registered under the Indian Companies Act, is engaged in the business of products, "pan masala" and "gutka" under the brand name "pan parag". The distinction between the two appears to be that when tobacco is added to "pan masala" it is called "gutka". Till 1996 there was no impost on the said products in this State. By Andhra Pradesh Ordinance No. 19 of 1996, which later became Andhra Pradesh General Sales Tax (Amendment) Act, 1996 (Act No. 27 of 1996), entry No. 194 was inserted in the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957 (for short "the APGST Act") and they were taxed at the point of first sale in the State at the rate of 10 paise in a rupee with effect from 8/02/1996. By Andhra Pradesh Ordinance No. 3 of 1997 that entry was amended by increasing the rate of tax to 50

Click Here to Read the rest of this document