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1970 Supreme(AP) 255
Andhra Pradesh High Court
Judges : A.SAMBASIVA RAO, GOPALRAO EKBOLE, N.KUMARAYYA
State Of A.P., represented by the State Represeptative before the State, Hyderabad, A.P. - Appellant
Versus
Murali Cafe, Main Road, Vijayanagaram - Respondent
Decided On : 11-19-70
The main legal point established in the judgment is the interpretation and application of the amended proviso to Section 5(1) of the Andhra Pradesh General Sales Tax Act, and the distinction between old and new rates for the assessment of turnover for the year.
Headnote:
Sales Tax - Amendment to Section 5(1) of Andhra Pradesh General Sales Tax Act - Section 5(1) - Summary of Acts and Sections: The court discussed the amendment to the proviso to Section 5(1) of the Andhra Pradesh General Sales Tax Act, introduced by section 5 of the Amendment Act No. 16 of 1963 with effect from 1-8-63, and its application to the assessment of tax rates for different periods. The court highlighted the interpretation of the proviso, the distinction between old and new rates, and the implications of the amendment on the assessment of turnover for the year.
Fact of the Case:
The case involved the assessment of M/s. Murali Cafe, Vizianagaram, for the year 1963-64, with a net turnover of Rs. 2,77,618.21. The Deputy Commercial Tax Officer assessed the turnover of meals and coffee at different rates, leading to an appeal to the Sales Tax Appellate Tribunal. The Tribunal held that the amended provisions of section 5(1) of the Andhra Pradesh General Sales Tax Act, which came into force from 1-8-1963, should be applied, and the respondents were entitled to be assessed at a lower rate for a turnover of Rs. 39,999. The State filed a revision case against this order.
Finding of the Court:
The court found that the assessing authority had rightly assessed the turnover in its revised assessment, and the Tribunal erred in interfering with that assessment. The court held that the amended proviso to Section 5(1) of the Act should govern transactions concluded after it came into force, and the quantum of tax should be determined accordingly to the rates prevailing after the amendment. The court also rejected the contention that the first Rs. 39,999 should be taxed at a lower rate for the second period, as it would amount to giving retrospective effect to a provision that was not made retrospective.
Issues: The principal issue raised was whether the amendment of the proviso to section 5(1) of the Act, which came into force on 1-8-1963, entitled the assessing authority to levy tax at different rates for different periods within the same assessment year.
Ratio Decidendi: The court held that the assessing authority had rightly assessed the turnover in its revised assessment, applying the old rates to transactions completed prior to the amendment and the new rates to transactions completed after the amendment. The court emphasized the distinction between old and new rates, the interpretation of the proviso, and the implications of the amendment on the assessment of turnover for the year.
Final Decision: The court allowed the tax revision case, set aside the order of the Tribunal, and restored that of the assessing authority as confirmed by the Assistant Commissioner. The petitioner was awarded costs and advocate's fee.
( 1 ) (JUDGMENT of the Court was delivered by Obul ) this revision preferred by the State against the order of the sales Tax Appellate Tribunal In T. A, No. 376 of 1966, raises an important question whether the amendment to the proviso to Section 5 (1) of the Aadhra Pradesh General Sales Tax Act, Introduced by section 5 of the Amendment Act No. 16 of 1963 with effect from 1-8-63 empowers the assessing authority to levy tax at one rate upto the period 31-7-63 in accordance with the proviso as it stood prior to its amendment and In respect of the period subsequent to 31-7-63 at a different rate as provided for in the substituted proviso.
( 2 ) TO appreciate the question involved, we may set out the relevant facts of this case in brief. M/s. Murali Cafe, Vizianagaram (hereinafter referred to as the assessee) was assessed to tax by the deputy Commercial Tax Officer, Vizianagaram, for the year 1963-64 on 30-6-1964 on a net turnover of Rs. 2,77. 618. 21 p. out of which the turnover of meals and coffee worked oat to Rs. 2,73,996. 96 p. The Deputy Commercial) Tax Officer assessed the turnover of meals and coffee splitting it up into two parts (1) Rs. 93,113. 23 p. upto 31-7-63 at 3% applying the old provision; and (2) upto the limit of rs. 39,999/- at 2% and the balance of Rs. 1,40,884, 73 at 3% from 1-8-63 to 31-3-64 applying the substituted provision, Against the order splitting up toe turnover into two parts and applying two different rates of tax in respect of the total turnover, the assessee preferred an appeal unsuccessfully to the Assistant Commissioner of commercial Taxes. Kakinada. Thereafter, a further appeal was preferred to the Sales Tax Appellate Tribunal and the Tribunal, holding that the amendment, which came into effect on 1-8-63, is prospective, gave relief in accordance with the rates prescribed in the amended proviso. It is this order that is assailed before us by the revision petitioner, the Slate of Andhra Pradesh.
( 3 ) IN order to Judge whether the assessing authority can invoke the old proviso upto 31-7-63 and the substituted proviso thereafter, it is necessary to notice both the provisions. Section 5 (1) of the andhra Pradesh General Sales Tax Act with its proviso prior to the amendment is in the following terms : "5. Levy of tax on sales Or purchases of goods :- (1) Every dealer (other than a casual trader and an agent of a nonresident dealers whose total turnover for a year is not less than Rs. 10,000/- and every agent of a non-resident dealer, whatever be his turnover for the year, shall pay a tax for each year, at the rate of two naya paise on every rupee of his turnover, provided that if and to the extent to which, such turnover relates to articles of food or drink or both sold at a hotel, boarding house, restaurant, stall or any other place, the tax shall be calculated at the rate of three naya paise in the rupee, if the total turnover relating to those articles is not less than Rs. 25,000/-" and after the amendment by Act 16 of 1963, whicb came into effect 1-8-1963 It reads :- "5. Levy of tax on sales or purchases of goods :- (1) Every dealer (other than a casual trader) whose total turnover for a year is not less than Rs, 10,000/-and every agent of a nonresident dealer, whatever be bis turnover for the year, shall pay a tax for each year, at the rate of two naya paise on every rupee on his turnover.
( 4 ) PROVIDED that if and to the extent to which such turnover relates to articles of food and drink or both sold in a hotel, boarding bouse, restaurant, stall or any other place for consumption on the premises and if the total turnover relating to those articles is not less than Rs 40 000 - for the year the tax shall be calculated at the rate of two naya paise in the rupee on the first Rs. 39,999/- and at the rate of three nayapaise in the rupee on the balance of the turnover". (There was a further amendment of the rates with effect from 1-4-1966 by the Amendment Act VII of 1966 ).
( 5 ) THE lea
