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2024 Supreme(AP) 972
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
RAVI NATH TILHARI, HARINATH N., JJ.
The Sales Tax Appellate Tribunal – Petitioner
Versus
M/s Pulpnpack (P) Limited – Respondent
Tax Revision Case No. 83 of 2008
Decided On : 08-05-2024
Important Points
Subject
Taxation - Sales Tax Exemption
Act Referred
Headnote
(B) Taxation - Interpretation of exemptions - Exemptions must be strictly interpreted, and the burden lies on the assessee to establish entitlement under tax laws - The ambiguity in exemption clauses favors the Revenue and cannot benefit the taxpayer. (Paras 25, 54)
Advocate Appeared:
For the Petitioner: Dantu Srinivas.
For the Respondent: S.R.R. Viswanath.
| Table of Content |
|---|
| 1. overview of sales tax controversy and exemptions. (Para 2 , 3 , 4) |
| 2. assessment of exemption applicability and context. (Para 5 , 6 , 7) |
| 3. arguments regarding interpretation of tax exemptions. (Para 8 , 9 , 10 , 11 , 12) |
| 4. analysis of statutory interpretation principles. (Para 14 , 15 , 16 , 17 , 18) |
| 5. court elaborates on the interpretation of taxation laws. (Para 30) |
| 6. court's final view on exemption's nature and conditions. (Para 76) |
| 7. conclusion of the case and dismissal of tax revisions. (Para 78 , 79) |
JUDGMENT :
RAVI NATH TILHARI, J.
1. Heard Sri T.C.D. Sekhar, learned Government Pleader for Commercial Tax for petitioners and Sri S. Suribabu, learned counsel, representing Sri S.R.R. Viswanath, learned counsel for the respondent.
2. The petitioner the State of Andhra Pradesh in all the revisions is challenging the orders dated 18.02.2008, passed by the Sales Tax Appellate Tribunal, Andhra Pradesh, Visakhapatnam Bench (for short “the Appellate Tribunal”) of the same nature in different 4 appeals for the assessment years from 2001-2002 to 2004-2005 under A.P. General Sales Tax Act, 1957 (for short, “the APGST Act, 1957”) arising out of different assessment orders with respect to the same respondent on the same subject.
Facts of the Case:
3. The respondent Pulp-N-Pack (P) Limited, Tadimalla is a trader in Pulp Moulded Egg Trays, (the Commodity in short) manufactured by a Small Scale Industries (SSI) Units. The respondent was finally assessed by the Commercial Tax Officer (CTO) granting exemption on the sales turnover of Pulp Moulded Egg Trays from the levy of turnover tax pursuant to G.O.Ms. No. 1091 Revenue (CT-II) Department dated 31.10.1994, issued under Section 9 (1) read with Section 5 A(1)(vi) of the APGST Act. The Deputy Commissioner (CT) in suo motu revision, vide separate orders dated 23.05.2007 and 24.05.2007 levied the turnover tax under Section 5 -A, @ 10% holding that the respondent was liable to the turnover tax on the second sales of Pulp Moulded Egg Trays which fell under Item 19 of the First Schedule. The Appellate Tribunal allowed the respondent’s four appeals vide separate orders dated 18.02.2008 restoring the order of the Commercial Tax Officer, holding that the respondent was entitled for exemption.
4. The details of all such cases is being given in a Tabular Form as under:
| S. No. | TREVC No. | TA No. & Order of STAT | Particulars of the Orders of DC | Particulars of Orders of CTO | Years of Assessment under the Act | Disputed Turnover (Rs.) |
| 1 | 149 of 2008 | 57/2007 Dated 18.08.2008 | RF No. 7/2007-08 Dated 23-05-2007 | G.I. No. 7591/2001-02 APGST Dated 14-2-2003 | 2001-02 | 3,16,16,871 |
| 2 | 191 of 2008 | 59/2007 Dated 18.08.2008 | RF No. 1/2007 08 Dated 23-05-2007 | G.I. No. 7591/2003-04 APGST Dated 27-3-2006 | 2003-04 | 2,78,89,240 |
| 3 | 135 of 2008 | 60/2007 Dated 18.08.2008 | RF No. 3/2007-08 Dated 24-05-2007 | G.I. No. 7591/2004-05 APGST Dated 29-3-2006 | 2004-05 | 3,69,44,360 |
| 4 | 83 of 2008 | 61/2007 Dated 18.08.2008 | RF No. 8/2007-08/CST | ELR/03/1/1217/2001-02 | 2001-02 | 1,58,77,005 |
5. As Common Questions are involved and common submissions have been advanced in all the aforesaid revision we proceed to decide all the revisions by this common judgment.
6. The Deputy Commissioner (CT) took the view that the respondent was a small scale industry unit, but the commodity sold was not manufactured by the respondent unit. The Pulp Moulded Egg Trays were purchased by the respondent from the other registered dealers. The assesse unit not being a manufacturer, exemption on sales turnover vide G.O.Ms. No. 1091 dated 31.10.1994 was not applicable. The turnover was liable to tax under Section 5 - A of the APGST Act, 1957. It further observed that, allowing exemption by the CTO was prejudicial to the interest of the State revenue. The contention of the dealer respondent that the sale of Egg Trays are generally exempted under Section 9 (1
