Ramesh Ranganathan, J.

1. In this batch of writ petitions, the validity of the assessment orders are put in issue on the ground that the assessing authority has levied purchase tax contrary to Section 4(4) of the A.P. VAT Act, 2005 (for short “the Act”) and Sections 14 and 15 of the Central Sales Tax Act, 1956 (“CST Act” for short). The petitioner-assessees are either (1) rice millers, or (2) dhal millers, or (3) soyabean oil millers, or (4) cotton millers. The first category of petitioners purchase paddy from agriculturists, mill it to produce rice, sell rice either to FCI or in the open market, and pay value added tax (VAT) on the said sales. The husk obtained, after milling rice, is either sold or consumed by the dealer. In such cases, the assessing authorities have levied 5% purchase tax on the purchase price of paddy which was used as input for “husk” which is exempt from tax under the first Schedule to the Act. The second category of petitioners purchased raw dhal from agriculturists, milled it to produce dhal, and paid value added tax (VAT) on the sale of finished (dehusked) dhal. The husk obtained, after milling dhal, is either sold or consumed by them. In these cases the assessing authorities have levied 5% purchase tax on the purchase price of raw dhal which was used as input for “husk”. The third category of petitioners purchased soyabean seed, and crushed it to produce soyabean oil. The residue was used to make soyabean deoiled cake which was sold by them as cattle/poultry feed. The assessing authorities have levied 5% purchase tax on the purchase price of soyabean seed which was used as input for “soyabean deoiled cake” which is exempt from tax under the Act. The fourth category of petitioners purchased raw cotton (Kapas) from agriculturists, and ginned it. Cotton seeds were separated in the process. The ginned cotton i.e., cotton lint was sold. The cotton seeds were crushed, and cotton seed oil was extracted and sold. Cotton deoiled cake, obtained after crushing cotton seed, was sent outside the State otherwise than by way of sale. The assessing authorities have levied purchase tax at 4%/5% on the proportionate value of cotton kapas used in the manufacture of cotton deoiled cake which was sent outside the State otherwise than by way of sale. In a few cases cotton seeds were despatched outside the State otherwise than by way of sale. Purchase tax, under Section 4(4) of the Act was levied at 4%/5% on the proportionate purchase price of raw cotton used as input for “cotton seed”.

2. Elaborate oral submissions have been put forth by Dr. S.R.R. Viswanath, Sri V. Bhaskar Reddy, Sri Shaikh Jilani Basha and Sri M.V.J.K. Kumar, Learned Counsel for the petitioners and Sri D. Srinivas, Sri M. Govind Reddy and Sri J. Anil Kumar, Learned Special Standing Counsel for Commercial Taxes. Written submissions have also been filed by Dr. S.R.R. Viswanath and Sri M.V.J.K. Kumar, Learned Counsel for the petitioners and Sri D. Srinivas, Sri M. Govind Reddy and Sri J. Anil Kumar, Learned Special Standing Counsel for Commercial Taxes.

I. THE RULE OF PRESUMPTION, IN FAVOUR OF CONSTITUTIONALITY, AS A PRINCIPLE OF STATUTORY CONSTRUCTION:

3. Before considering the rival submissions of Learned Counsel on either side, it is useful to examine the scope of Section 4(4) of the Act and its proviso. In order to arrest tax avoidance, a provision for levy of “contingent purchase tax” was introduced in almost all State enactments. This tax was called “contingent purchase tax” as the levy of tax on “purchases” is contingent upon the happening of certain events subsequent to the purchase viz., (1) consumption in the manufacture/production of other goods for sale; (2) consumption otherwise; (3) disposal of those goods within the State otherwise than by way of sale; and (4) dispatch of goods outside the State. Purchase tax, levied under Section 4(4) of the Act, is similar to Section 6-A of the A.P. General Sales Tax Act, 1957 (for short the “APGST Act