The provisions of section 6-A of the Andhra Pradesh General Sales Tax Act are valid and constitutional.

SEETHARAM REDDY, J.

( 1 ) THE petitioners, 39 in number, are dealers in milk, mining-materials, butter, gold, silver and so forth. They assail the validity of the amended section 6-A of the Andhra Pradesh General Sales Tax Act (hereinafter referred to as "the Act") which seeks to impose tax on purchase point, hitherto not exigible on various grounds.

( 2 ) THE petitioners, admittedly dealers, purchase goods such as milk, butter and so forth and then covert into a product like Horlicks and ghee and dispose of the same thereafter. Admittedly the by-product later, on its disposal, is subjected to tax. By Amendment Act No. 49 of 1976 dated 19/08/1976, to be effective from 1/09/1976, the new section 6-A was brought in by which any dealer, who purchases goods either from a registered dealer or from a person other than a registered dealer, will pay tax on the turnover, though the tax hitherto was not payable under section 5 or under section 6 of the Act.

( 3 ) IT is common ground that in all these cases we are solely concerned with the adjudication on questions of law, and therefore, we confine ourselves with the same without dwelling on the factual side of each petition.

( 4 ) THE contentious grounds raised by the counsel may now be enumerated : (1) Section 6-A seeks to make a distinction while imposing tax on the purchaser, who purchases goods from registered dealers on one hand and from persons other than registered dealers on the other and so discriminatory as it has no rational nexus with the object and therefore offends article 14 of the Constitution of India. (2) Section 6-A in substance is a levy on the act of user or consumption and so cannot reasonably be construed as tax on sale or purchase. Hence, it is ultra vires the powers of the State Legislature. (3) Sale of commodity, say milk, by the agriculturist vendors is exempt from tax under section 9 of the Act. Therefore, the milk purchased by the petitioners cannot be subjected to tax. (4) The liability to pay tax under section 6-A is on the turnover of purchase and since it has no turnover base, the tax cannot be levied on purchase. (5) Section 6-A on construction seeks to impose multi-point tax and so contravenes section 15 (a) of the Central Sales Tax Act, that the omission of the words "in circumstances in which tax is payable under section 5 or under section 6 as the case may be" in clause (ii) of section 6-A is significant, that the legislature if intended to bring within the taxing reach the purchases from persons other than registered dealers, it would not have chosen to omit those words especially so when they are found in clause (i) of section 6-A and that the words "aforementioned circumstances" employed in the concluding portion of section 6-A are only referable to the circumstances stated in section 6-A (i) and therefore, section 6-A (ii) becomes redundant. (6) Since section 5-A applies only to dealers liable to pay tax under section 5 alone, there is no warrant for levying tax under section 5-A on the transactions covered under section 6-A.

( 5 ) BEFORE analysing the arguments for and against, section 6-A, which is chiefly concerned in this case, may be read. "6-A. Levy of tax on turnover relating to purchase of certain goods.- Every dealer, who in the course of business - (i) purchases any goods (the sale or purchase of which is liable to tax under this Act) from a registered dealer in circumstances in which no tax is payable under section 5 or under section 6, as the case may be, or (ii) purchases any goods (the sale or purchase of which is liable to tax under this Act) from a person other than a registered dealer, and (a) either 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 from to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce. shall pay tax on the turnov

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