Case: Shri Siddhvi Vinayaka Coconut and Co Vs. State of Andhra Pradesh

from the defect pointed out by this Court in Bhawani Cotton Mills case, 20 STC 290 = (AIR 1967 SC 1616 ) that a provision for taxation which would not be justifiable cannot be upheld merely on the ground that it provides also for a refund. The various periods mentioned in item 5-A are there because of historical reasons and they are only reproductions of provisions of earlier law. The decision in the Bhawani Cotton Mills case on which the petitioners relied cannot apply in this case because in the Act there under consideration there was no provision indicating the state at which the tax was to be levied. The very same levy was upheld in Rattan Lal and Co. v. Assessing Authority, 25 STC 136 = (AIR 1970 SC 1742 ) after the Act was amended by specifying the stage as the last purchase or sale of declared goods by a dealer liable to pay the tax and making the stage quite clear, and by giving the dealer an option not to include other transactions in his returns and thus saving him from the liability to pay the tax till he was the dealer liable to pay the tax. This Court then pointed out that the information whether his was the last purchase or sale was always possessed by a dealer and by providing that he need not include in his turnover any transaction except when he was the last dealer the position was made clear. It is this decision that will be applicable to the facts of this case.8. In this connection we may point our that the provisions of Rule 45 of the Andhra Pradesh General Sales Tax Rules are similar. It provides that every dealer has to maintain a true and correct account showing the value of the goods produced, manufactured, bought and sold by him, the names and addresses of the persons from whom goods were purchased, supported by a bill or delivery note issued by the seller. Every dealer carrying on business in the goods specified in the First, Second and Third Schedules whose total turnover exceeds Rs. 10,000 a year and every other dealer whose turnover exceeds Rs. 20,000 a year shall issue a bill or cash memorandum in respect of every sale involving an amount of Rs. 5 or more. Every such bill or cash memorandum shall be duly signed and dated and a counter-foil shall be kept by the dealer. The bills or cash memoranda issued by a dealer shall be serially numbered for each year and in each of the bills or cash memoranda issued the dealer shall specify the full name and style of his business, the number of his registration certificate, the particulars of goods sold and the price thereof and in the case of sales to a dealer the full name and address and the number of the registration certificate of the purchaser. The bills or cash memoranda issued in the case of sales of goods liable to a single point tax shall contain the following certificate... Certified that in respect of the turnover of the goods mentioned in item (s) of this bill the tax has been paid or/is payable by me or is payable by Sri/Ms...being the dealer who has purchased them from me. These make it amply clear that there can be no question of either a dealer in watery coconuts or in dry coconuts having to pay a tax over again hereafter. They can include in their return only goods which are liable to tax and need not include those which have already suffered tax.9. Another aspect of the 1971 Act that as a result of it there are two entries, 5 and 5-A in Schedule III, namely coconuts of all varieties and watery coconuts there is no possibility of watery coconuts suffering tax after they become dried coconuts, if they have already suffered tax as watery coconuts. Rule 45 provides sufficient safeguards for this purpose.10. We also accept the contention put forward on behalf of the State of Andhra Pradesh that watery coconuts and dried coconuts are two distinct commodities commercially speaking. Watery coconuts are put to a variety of uses e.g., for cooking purpose, for religious and social functions whereas dried coconuts are used mainly for extracting oil. This Court has in a number of cases held that the same commodity at different stages could be treated and taxed as commercially different articles. In A. Hajee Abdul Shakoor and Co. v. State of Madras, 1964-8 SCR 217 = (AIR 1964 SC 1729 ) this Court held that hides and skins in the untanned condition are undoubtedly different as articles of merchandise than tanned hides and skins and pointed out that the fact that certain articles are mentioned under the same heading in a statute or the constitution, does not mean that they all constitute one commodity. We may also refer to the decisions in Jagannath v. Union of India, 1962-2 SCR 118 = (AIR 1962 SC 148 ) where tobacco in the whole leaf and tobacco in the broken leaf were treated as two different commodities, East India Tobacco Co. v. State of Andhra Pradesh, 1963-1 SCR 404 = (AIR 1962 SC 1733 ) where Virginia tobacco and country tobacco were treated as two different commodities, and Venkataraman v. State of Madras, 1970-1 SCR 615 = (AIR 1970 508) where cane jaggery and plam jaggery were treated as two different commodities.11. We do not think that the Act can be said to contravene Section 15 of the Central Sales Tax Act. Under the Act though watery coconuts and dried coconuts are treated separately there is a provision for refund when the same watery coconuts, which have suffered tax, become dry coconuts, which have suffered tax, become dry coconuts later. It is for this contingency that, as we have pointed out earlier, provision for refund is made. In any case in the future no difficulty would arise as we pointed out earlier.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]6. It is unnecessary to consider whether the Andhra Pradesh High Court was right in its decision that watery coconut is an oilseeds for the reasons given by them, especially after the amendment made by the Central Act which seems to proceed on the basis that only copra is an oilseeds as the Andhra Pradesh Act proceeds on the basis that watery coconut is also an oilseed. That amendment applies only to the period after 1 April, 1973 and these appeals and petitioners relate to the period before 17 April, 1971, Mr. Basi Reddy appearing for the State of Andhra Pradesh does not seek to question this finding either. Undoubtedly, it is the watery coconut that in due course becomes dry coconut or copra, Mr. Basi Reddy does not even seek to argue that the same watery coconut after having suffered tax should also be taxed as dry coconut.7. The first point to be noticed about the 1971 amendment is that in one of its aspects it deals with the period between August 1963 to April 1971 and validates taxes already levied and collected. Therefore, the proviso to entry 5-A of Schedule III which provides for refund does not really suffer from the defect pointed out by this Court in Bhawani Cotton Mills case, 20 STC 290   = (AIR 1967 SC 1616  ) that a provision for taxation which would not be justifiable cannot be upheld merely on the ground that it provides also for a refund. The various periods mentioned in item 5-A are there because of historical reasons and they are only reproductions of provisions of earlier law. The decision in the Bhawani Cotton Mills case on which the petitioners relied cannot apply in this case because in the Act there under consideration there was no provision indicating the state at which the tax was to be levied. The very same levy was upheld in Rattan Lal and Co. v. Assessing Authority, 25 STC 136   = (AIR 1970 SC 1742  ) after the Act was amended by specifying the stage as the last purchase or sale of declared goods by a dealer liable to pay the tax and making the stage quite clear, and by giving the dealer an option not to include other transactions in his returns and thus saving him from the liability to pay the tax till he was the dealer liable to pay the tax. This Court then pointed out that the information whether his was the last purchase or sale was always possessed by a dealer and by providing that he need not include in his turnover any transaction except when he was the last dealer the position was made clear. It is this decision that will be applicable to the facts of this case.8. In this connection we may point our that the provisions of Rule 45 of the Andhra Pradesh General Sales Tax Rules aremake it amply clear that there can be no question of either a dealer in watery coconuts or in dry coconuts having to pay a tax over again hereafter. They can include in their return only goods which are liable to tax and need not include those which have already suffered tax.9. Another aspect of the 1971 Act that as a result of it there are two entries, 5 and 5-A in Schedule III, namely coconuts of all varieties and watery coconuts there is no possibility of watery coconuts suffering tax after they become dried coconuts, if they have already suffered tax as watery coconuts. Rule 45 provides sufficient safeguards for this purpose.10. We also accept the contention put forward on behalf of the State of Andhra Pradesh that watery coconuts and dried coconuts are two distinct commodities commercially speaking. Watery coconuts are put to a variety of uses e.g., for cooking purpose, for religious and social functions whereas dried coconuts are used mainly for extracting oil. This Court has in a number of cases held that the same commodity at different stages could be treated and taxed as commercially different articles. In A. Hajee Abdul Shakoor and Co. v. State of Madras, 1964-8 SCR 217   = (AIR 1964 SC 1729  ) this Court held that hides and skins in the untanned condition are undoubtedly different as articles of merchandise than tanned hides and skins and pointed out that the fact that certain articles are mentioned under the same heading in a statute or the constitution, does not mean that they all constitute one commodity. We may also refer to the decisions in Jagannath v. Union of India, 1962-2 SCR 118   = (AIR 1962 SC 148  ) where tobacco in the whole leaf and tobacco in the broken leaf were treated as two different commodities, East India Tobacco Co. v. State of Andhra Pradesh, 1963-1 SCR 404   = (AIR 1962 SC 1733  ) where Virginia tobacco and country tobacco were treated as two different commodities, and Venkataraman v. State of Madras, 1970-1 SCR 615   = (AIR 1970 508) where cane jaggery and plam jaggery were treated as two different commodities.11. We do not think that the Act can be said to contravene Section 15 of the Central Sales Tax Act. Under the Act though watery coconuts and dried coconuts are treated separately there is a provision for refund when the same watery coconuts, which have suffered tax, become dry coconuts, which have suffered tax, become dry coconuts later. It is for this contingency that, as we have pointed out earlier, provision for refund is made. In any case in the future no difficulty would arise as we pointed out earlier.