The consumption of goods by a dealer in the manufacture of other goods for sale or otherwise, within the meaning of clause (a) of section 6-A of the A. P. General Sales Tax Act, does not include the use of material in the construction of a building or other structure.

B. P. JEEVAN REDDY, J.

( 1 ) THREE identical contentions are raised in these two writ petitions, viz. , (i) that section 6-A of the A. P. General Sales Tax Act is unconstitutional and void; (ii) that the petitioners cannot be treated as "dealers" for the purpose of section 6-A; and (iii) even if the petitioners are not right in their first two contentions, still they are not liable to pay any sales tax on the material purchased by them, inasmuch as the material purchased by them is not consumed by them in the manufacture of other goods for sale, or otherwise, within the meaning of clause (a) in section 6-A. Learned counsel stated that all the three points are concluded by the decisions of this Court - the first two against the petitioners, and the third one in their favour. He brought to our notice that the constitutionality of section 6-A has been upheld by a Bench of this Court in Hindustan Milkfood Manufacturers Ltd. v. State of Andhra Pradesh [1982] 51 STC 1, followed in Nandanam Construction Company v. Assistant Commissioner [1983] 53 STC 42. On the second question, the learned counsel submitted, the decision of the Bench in Nandanam Construction Company v. Assistant Commissioner [1983] 53 STC 42 (AP) is against the petitioners, and that according to the said decision, the petitioners must be held to be "dealers" for the purpose of section 6-A. On the third question, however, the learned counsel submitted that the very same decision in Nandanam Construction Companys case [1983] 53 STC 42 (AP) concludes the issue in favour of the petitioners. This aspect needs a little elaboration.

( 2 ) THE petitioners are contractors executing works contracts for the Government of Andhra Pradesh. They construct buildings or other structures, for which purpose they purchase, inter alia, sand gravel, stone, etc. , from persons other than registered dealers. According to section 6-A of the Act, every dealer who, in the course of his business, purchases any goods (the sale or purchase of which is liable to tax under the Act) from a person other than a registered dealer, is liable to pay tax on the turnover relating to his purchase at the same rate at which tax would have been leviable on such goods, had they been sold by a registered dealer. There is, however, a further condition imposed in such a case, viz. , that such purchaser " (a) consumes such goods in the manufacture of other goods for sale, or otherwise", or " (b) disposes of such goods in any manner other than by way of sale in the State", or" (C) despatches them to a place outside the State except as a direct result of sale of purchase in the course of inter-State trade or commerce". One of the three conditions mentioned in clauses (a), (b) and (c) must be satisfied before a purchaser can be made liable under the said provision. In this case, clauses (b) and (c) have no application. (The learned Government Pleader, however, contended that clause (b) is attracted, which argument we shall deal with later ). It is only clause (a) which is said to be attracted.

( 3 ) CLAUSE (a) - read without being oppressed by any decision - contemplates the purchaser consuming the goods purchased by him either in the manufacture of other goods for sale, or consuming them otherwise. In this sense, the petitioners would be liable to pay the tax, inasmuch as they consume such goods otherwise than in the manufacture of other goods for sale. Counsel for the petitioners, however, argues that clause (a) should not be read in the above manner. According to him, clause (a) contemplates a situation where the goods purchased by a dealer from an unregistered dealer are consumed by him in the manufacture of other goods, whether for sale or otherwise. In other words, according to the learned counsel, the words "or otherwise" relate to, and must be read only along with the words "for sale" immediately preceding, and cannot be read as an alternative to the words "in the manufacture of other goods for sale".

( 4 ) IN

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