SYED SHAH MOHAMMED QUADRI, J.

( 1 ) THIS tax revision case is filed under section 22 (1) of the Andhra Pradesh General Sales Tax Act, 1957 (for short, the Act) by the State.

( 2 ) THE respondent-Union of India, hereinafter referred to as "m. E. S. ", entered into a contract for construction of buildings with a building contractor. It appears, the terms of the contract provide that for the purpose of the construction, cement and steel will be supplied by M. E. S. to the contractor and the price thereof will be deducted from the amount payable to the contractor for the work done by him. For the assessment year 1985-86, the Commercial Tax Officer, assessing authority, called for the particulars of the supplies of goods made by M. E. S. to the contractor. The M. E. S. , however, did not furnish the particulars, so the assessing authority estimated the net turnover at Rs. 12,50,00,000 and assessed it to sales tax. Aggrieved by the assessment orders passed by the assessing authority, M. E. S. filed an appeal before the Appellate Authority - Deputy Commissioner (C. T), Kakinada. It was pleaded before the appellate authority that in view of the provisions of article 285 (1) of the Constitution of India, no tax can be collected from the Union Government; further M. E. S. is not a dealer within the meaning of the Act, as it is not carrying on business, therefore, no sales tax can be levied on it. It was also pleaded that no reasonable opportunity was given to M. E. S. The above said pleas were not accepted by the appellate authority and the appeal was dismissed on 31/07/1992; the matter was remanded to the assessing authority to verify the actual turnover and assess the tax according to law. Aggrieved by the order of the appellate authority, M. E. S. filed an appeal before the Sales Tax Appellate Tribunal. The Tribunal held that M. E. S. could not be said to be a dealer under the A. P. General Sales Tax Act; the Tribunal thus allowed the appeal, setting aside the order of the appellate authority on 21/09/1995. It is the validity of that order of the Tribunal that is the subject-matter of this tax revision case before us.

( 3 ) THE learned Special Government Pleader for Taxes submits that the Central Government as well as the State Government fall within the meaning of "dealer" in section 2 (e) of the Act read with explanation III, therefore the Tribunal has erred in holding that the Central Government is not a dealer. He contends that article 285 of the Constitution of India does not exempt the Government from payment of tax, therefore the M. E. S. was rightly assessed the sales tax. With regard to the merits of the case, it is submitted that under the contract, admittedly, M. E. S. has supplied cement and steel to the contractor for use in the construction of the building which was entrusted to the contractor, therefore, the turnover for the supply of goods to the contractor is liable to be assessed to sales tax.

( 4 ) WE shall take up the first contention of the learned Government Pleader. Section 2 (e) of the Act, in so far as it is relevant for our purpose, reads as under :" dealer means any person who carries on the business of buying, selling, supplying or distributing goods (or delivering goods on hire purchase or on any system of payment by instalments, or carries on or executes any works contract involving supply or use of material directly or otherwise, whether for cash, or for deferred payment, or for commission, remuneration or other valuable consideration and includes - (i) to (iv ). . . . . . . . . . Explanations I and II. . . . . . . . . . Explanation III.- The Central Government or the State Government which, whether or not in the course of business, buys, sells, supplies or distributes goods, directly or otherwise, for cash or for deferred payment or for commission, remuneration or other valuable consideration shall be deemed to be dealer for the purposes of this Act. "

( 5 ) FROM the perusal of the definition of "deale

Click Here to Read the rest of this document