2026:APHC:14963 APHC011354212007 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI [3529]

(Special Original Jurisdiction)

MONDAY, THE TWENTY THIRD DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR TAX REVISION CASE Nos.: 111/2008 & 26/2009 TAX REVISION CASE NO: 111/2008 Between:

1. THE STATE OF ANDHRAPRADESH, AP ...PETITIONER AND

1. KUSUMANCHI RAMESHWARA RAO TRADERS, AP ...RESPONDENT Counsel for the Petitioner:

1. GP FOR COMMERCIAL TAX Counsel for the Respondent:

1. S R R VISWANATH The Court made the following Common Order:

(per Hon’ble Sri Justice R. Raghunandan Rao)

Both these Revision Cases arise out of a common order of the Sales Tax Appellate Tribunal, Visakhapatnam Bench, dated 27.09.2007. They are being disposed of by way of this common order, as the issues raised in both these cases are common.

2. In both these cases, the respondent dealers, being processing agents, were purchasers of raw cashew nuts from cashew nut farmers in the State of Andhra Pradesh and had dispatched these cashew nuts to their non- resident principals, out of the State, for the relevant assessment years. The respondent dealers had contended that the said purchase by them and the subsequent transport of raw cashew nuts to their non-resident principals cannot be taxed under the A.P. General Sales Tax (GST) Act, 1957 and can be treated only as sales under the Central Sales Tax (CST) Act, 1956. The Assessing Authority rejected this contention and subjected the said turnover to tax under Section 5 and 5 (A) of the A.P. GST Act. Aggrieved by the same, the respondent dealers had moved appeals, which came to be dismissed by the Appellate Deputy Commissioner. Aggrieved by the said orders of dismissal, the respondent dealers had approached the Sales Tax Appellate Tribunal.

3. It appears that various other dealers had also approached the Tribunal, by way of separate appeals. The Sales Tax Appellate Tribunal took up all these matters together and disposed of the same, by way of a common order, dated 27.09.2007.

4. The Tribunal framed the following three issues, which require to be determined:

1) Whether the purchases of cashew nuts by the appellants from the various sellers of AP amount to purchases in the course of inter-state trade and commerce for the purpose of Section 3 (a) of the Central Sales Tax Act, 1957? If so, whether they are taxable under Section 5/5A of the APGST Act, 1957 in the light of the provisions contained in Section 38 of the Act?

2) Whether the purchases of the gunnies made by Sri Kusumanchi Ramalingeswara Rao Traders, Narsipatnam, from certain un-registered dealers of A.P., which are dispatched to other states subsequently, containing therein the cashew nuts, are exigible to contingency purchase tax under Section 6 A of the APGST Act, 1957 in the light of the bar created in Section 38 of the Act?

3) Whether the lower authorities are justified in the addition of certain turnovers towards probable suppressions to that of the returned turnovers in the facts of the cases?

5. The Tribunal held that the transactions took place in the course of inter-state sales falling under the CST Act and cannot be brought to tax under the AP GST Act. One of the reasons for which the Tribunal had come to this conclusion was the Judgment of the Tribunal in the case of Sri Ganesh Traders, Tuni and another vs. State of A.P., 29 APSTJ 59, which was confirmed by the erstwhile High Court of Judicature of A.P in the case of State of A.P. Vs. Sri Ganesh Traders, 29 APSTJ 58. In that view of the matter, the appeals came to be allowed by the Tribunal.

6. Aggrieved by the said order, the State is in revision before this Court.

7. A preliminary issue is raised by Sri Suribabu Samudrala, learned counsel appearing for Sri S.R.R. Viswanath, learned counsel for the respondent dealers. Sri Suribabu Samudrala, learned counsel contends that the common order passed by the STAT was in relation to various ta