High Court affirms tax assessment on coriander turnover, rejects oil-seed classification

The High Court upheld the assessment of tax on the turnover of coriander at the point of first purchase under item 9 of the Second Schedule to the Andhra Pradesh General Sales Tax Act. The petition was dismissed, affirming the legality of the tax levy and rejecting the contention that coriander qualifies as an oil-seed under the relevant statutory provisions.

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Issues Involved:
1. Legality of levy of tax on the turnover of coriander at the point of first purchase under item 9 of the Second Schedule to the Andhra Pradesh General Sales Tax Act.
2. Whether coriander qualifies as an oil-seed under item 3 of the Third Schedule to the Andhra Pradesh General Sales Tax Act read with section 14(vi) of the Central Sales Tax Act, 1956.

Detailed Analysis:

Issue 1: Legality of Levy of Tax on Coriander at the Point of First Purchase

The petitioner, a dealer in coriander, was assessed to tax at the rate of four paise in the rupee under item 9 of the Second Schedule to the Andhra Pradesh General Sales Tax Act by the Commercial Tax Officer, Guntakal, on a turnover of Rs. 12,74,997 for the assessment year 1975-76. This assessment was confirmed by the Assistant Commissioner (CT), Appeals, Kurnool, and subsequently by the Sales Tax Appellate Tribunal.

Issue 2: Whether Coriander Qualifies as an Oil-Seed

The petitioner initially contended that coriander was an oil-seed within the meaning of item 3 of the Third Schedule to the Andhra Pradesh General Sales Tax Act read with section 14(vi) of the Central Sales Tax Act, 1956, and thus should be considered one of the declared goods. However, this contention was given up before the High Court.

The relevant provisions of the Andhra Pradesh General Sales Tax Act and the Central Sales Tax Act were examined. Under section 5(1) of the Andhra Pradesh General Sales Tax Act, a dealer is liable to tax at the rate of four paise on every rupee of turnover, levied at the point of sale or purchase as set out in the schedules. Section 5(2)(b) specifies that tax on goods mentioned in the Second Schedule is levied at the point of first purchase. Coriander is included as item 9 of the Second Schedule, thus taxed at the point of first purchase.

Section 6 of the Act deals with declared goods, taxed at the rate and point specified in the Third Schedule. Declared goods are defined under section 2(f) of the Act and section 2(c) of the Central Sales Tax Act as goods of special importance in inter-State trade or commerce, enumerated in section 14 of the Central Sales Tax Act. Coriander is not listed as a declared good under section 14(vi) of the Central Sales Tax Act or item 3 of the Third Schedule to the Andhra Pradesh General Sales Tax Act.

The Supreme Court's decision in State of Orissa v. Dinabandhu Sahu and Sons [1976] 37 S.T.C. 583 (S.C.) was considered. The Supreme Court, while construing section 14(vi) of the Central Sales Tax Act as it stood prior to the amendment by Act No. 61 of 1972, did not definitively classify coriander as an oil-seed. Instead, it upheld the Sales Tax Tribunal's decision based on the evidence presented, without making a firm declaration on coriander's status as an oil-seed.

Given that the amended section 14(vi) of the Central Sales Tax Act, which governs the assessment in question, does not include coriander in the exhaustive list of oil-seeds, the petitioner's argument that item 9 of the Second Schedule should be deemed non est was dismissed. The Supreme Court's decision did not invalidate the entry for coriander in the Second Schedule, and thus, the turnover of coriander was rightly assessed to tax at the point of first purchase.

The High Court also noted that previous decisions, such as those in Darapureddi Venkanna v. Commercial Tax Officer, Amalapuram (W.P. No. 366 of 1967, Andhra Pradesh High Court) and Tagoob Mohammad of Kanchili v. Commercial Tax Officer, Srikakulam [1971] 28 S.T.C. 110, were not applicable as they dealt with different contexts and commodities.

Conclusion:

The High Court upheld the assessment of tax on the turnover of coriander at the point of first purchase under item 9 of the Second Schedule to the Andhra Pradesh General Sales Tax Act. The petition was dismissed with costs, affirming the legality of the tax levy and rejecting the contention that coriander qualifies as an oil-seed under the relevant statutory provisions.

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