THE HON’BLE SRI JUSTICE T. VINOD KUMAR

AND

THE HON’BLE SMT JUSTICE P.SREE SUDHA

Special Appeal No. 20 of 2002

JUDGMENT:(per the Hon’ble Sri Justice T.Vinod Kumar)

This Special Appeal is directed against the order of the

Commissioner of Commercial Taxes, A.P., Hyderabad, dt.21.102002 in Ref.L.III(1)/2050/99-2 for the assessment year 1995-96 under the provisions of CST Act, 1956 (for short ‘the

Act’).

2. Heard learned counsel for the appellant, learned Special Standing Counsel appearing on behalf of respondent-State and

perused the record.

3. The appellant is an apex level cooperative society established under the administrative control of Ministry of Tribal Affairs, Government of India, with its head office at New

Delhi, having branch offices all over the Country.

4. The appellant undertakes the activities inter alia including upliftment of tribals by purchasing minor forest and agricultural produce, stocking and disposing of by way of sales and exports so as to ensure a reasonable return to the tribal farmers located

in different parts of the Country.

5. The appellant was initially assessed to tax for the assessment year 1995-96 by the Commercial Tax Officer, Nampally Circle on the gross turnover of Rs.2,46,60,087/- and net turnover of Rs.1,58,72,097/-, vide order dt.28.03.1998.

6. The Commercial Tax Officer by issuing revised proceedings, dt.22.10.2002, assessed the appellant to tax by subjecting the turnover of Rs.9,07,63,436/- to tax under Section 3(a) of the Act, by noting that the appellant had dispatched raw cashew nuts to the State of Kerala by obtaining railway receipts in its own name and delivering the said goods to M/s CAPEX, Quilon, Kerala and received the consideration for such sales.

7. The Assessing Authority by taking note of the fact that though the appellant had claimed the said sale is pursuant to the contract entered into by it with M/s B.P. Exporters, Hyderabad, however, such contract has resulted in movement of goods from the State of Andhra Pradesh to Quilon at Kerala, had disallowed the claim of the appellant of such sales not being exigible to tax under the provisions of Section 3(a) of the Act, 8. Aggrieved by the aforesaid order of assessing authority, the appellant had filed an appeal vide No.A/69/98-99, before the First Appellate Authority, who by its order dt.24.10.1998, had allowed the said appeal by setting aside the order of the Assessing Authority in bringing the turnover relating to supply of raw cashew nuts in the name of M/s B.P. Exporters to M/s CAPEX, Quilon, Kerala.

9. The Commissioner, Commercial Taxes, having found the order of the Appellate Authority to be prejudicial to the interest of Revenue, exercising powers under Section 20(1) of the APGST Act, 1957 r/w Section 9(2) of CST Act, had issued a show-cause notice, dt.29.08.2001, calling upon the appellant, to show cause as to why the order of the Appellate Authority should not be set aside and the order of the Assessing Authority be restored, whereby the Assessing Authority had brought the turnover regarding supply of raw cashew effected to M/s CAPEX, Quilon, Kerala, to the tune of Rs.9,88,86,419/- to tax based on provisional assessment order made by the Assistant Commissioner(Int.), dt.29.01.1996.

10. On being issued with show-cause notice, the appellant filed objections to the said notice vide it’s letters, dt.28.02.2022 and dt.06.05.2002, and claimed that they had purchased total raw cashew nuts to the tune of Rs.21,20,93,612/- to an extent of 6529.07 MT (i.e., Rs.12,73,10,699/- for and on behalf of M/s.MVR Industries, Madras to an extent of 3662.80 MT, and Rs.8,47,82,912/- for and on behalf of M/s B.P.Exporters, Hyderabad, to an extent of 2866.273 MT); that they had made the entire extent of raw cashew nuts through an agent by name M/s Sri Krishna Traders, Kothur; and that the stock of goods purchased by them through their agent was kept in the premises of Santhosh Oil Refinery and New Vijayalakshmi Oil Extractions, Kothur, Mahaboobnagar.

11. App