THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE SUDDALA CHALAPATHI RAO Tax Revision Case No.244 of 2009 ORDER: (per Hon’ble Sri Justice P.SAM KOSHY The instant Tax Revision Case has been filed by the petitioner-

State under Section 22(1) read with Rule 10 of the Andhra Pradesh General Sales Tax Act, 1957 assailing the order dated 01.06.2009 in Tribunal Appeal No.177 of 2004, passed by the Sales Tax Appellate Tribunal, Andhra Pradesh, at Hyderabad (for short, ‘the impugned order’)

2. Heard Mr. T. Chaitanya Kiran, learned Assistant Government Pleader, appearing on behalf of Mr. Swaroop Oorilla, learned Special Government Pleader for State Tax, for the petitioner.

3. Vide the impugned order, the Tribunal allowed the appeal preferred by the respondent herein and set aside the order passed by the Appellate Deputy Commissioner (CT), Punjagutta Division, Hyderabad, for the Assessment Years 1997-98 (APGST).

4. The question of law which came up for consideration before the Tribunal was whether the food articles supplied by the respondent- Assessee to the Indian Airlines would be taxable under Section 5 of the Andhra Pradesh General Sales Tax Act, 1957 (for short, ‘the Act’)

or under Section 5C of the Act.

5. Section 5 of the Act for ready reference is being reproduced as under, viz., “Section 5 - Levy of tax on sales or purchases of goods (1) Save as otherwise provided in this Act every dealer shall pay tax under this Act for each year on every rupee of his turnover of sales or purchases of goods in each year irrespective of the quantum of his turnover at the rates of tax and at the points of levy specified in the Schedules.

(3) For the purpose of this section and the other provisions of this Act, the turnover which a dealer shall be liable to pay tax shall be determined after making such deductions from his total turnover, and in such manner as may be prescribed.

(4) The taxes under this section shall be assessed, levied and collected in such manner, as may be prescribed.

Provided that -

(i) in respect of the same transaction, the buyer or the seller but not both, as determined by such rules as may be prescribed, shall be taxed.

(ii) where a dealer has been taxed in respect of the purchase of any goods, in accordance with the rules referred to in clause (i) of this proviso, he shall not be taxed again in respect of any sale of such goods effected by him."

6. Further, Section 5C of the Act is also reproduced for ready reference, viz., “Section 5C - Tax in respect of supply of articles of food or drink in restaurants or catering houses or hotels Notwithstanding anything contained in Section 5 or Section 6, Every dealer running any restaurant or eating house or hotel (by whatever name called), who supplies, by way of or as part of any service or in any other manner whatsoever of goods, being food or any other article for human consumption or any drink (whether or not intoxicating) and whether or not such goods have suffered tax under the Act. where such supply or service is for cash, deferred payment or other valuable consideration shall on the total amount charged by the said dealer for such supply, pay a tax at the rate of eight paise on every rupee on the aggregate of such amount realised or realisable by him during the year.

Provided that no such tax shall be levied if the total turnover of the dealer including such aggregate during the year is less than Rs.2,00,000.”

7. The Entry under I Schedule which attracts Section 5 is Entry 129 which refers to articles of food and drinks, and which attracts 5%

up till 08.07.1983 and 9% from 01.04.1995.

8. A plain reading of Section 5 (referred supra) would go to show that the said section was there since inception of the Act and Section 5C has been subsequently enacted w.e.f. 02.02.1983 and which stood amended from 31.12.1999. A plain reading of Section 5C gives a clear intention of the law makers that the said Section had been inserted to provide certain incentives to the people runni