Single-point sales tax on cashewnut covers kernel too; ambiguous taxing entries are construed in favour of the assessee.

Cashewnut and cashew kernel under item 12 of the Second Schedule to the Andhra Pradesh General Sales Tax Act were treated in common and commercial parlance as one commodity for single-point levy at the first purchase in the State. The word "and" in the entry was read as an exhaustive description of that category, not as creating two separately taxable goods. Applying the common parlance test, and alternatively the rule that ambiguity in a taxing entry must be construed in favour of the assessee, kernel could not be taxed again once the cashewnut had already suffered tax at the first purchase.

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Issues: Whether cashewnut and cashew kernel under item 12 of the Second Schedule to the Andhra Pradesh General Sales Tax Act, 1957 are the same commodity and whether kernel is separately taxable after cashewnut has already suffered tax at the point of first purchase in the State.

Analysis: Section 5(2)(b) of the Andhra Pradesh General Sales Tax Act, 1957 provides for single point levy on goods in the Second Schedule at the point of first purchase in the State. Item 12 of the Second Schedule, introduced by section 14 of the Andhra Pradesh General Sales Tax (Second Amendment) Act, 1974, refers to "cashewnut and kernel" and fixes tax at that single point. The expressions were held to be used in their common and commercial sense, without treating cashewnut and kernel as distinct taxable commodities. The word "and" was read as an exhaustive description of the same category of goods rather than as creating two separately taxable articles. Applying the common parlance test and, alternatively, the rule that an ambiguity in a taxing entry must be construed in favour of the assessee, the kernel could not be taxed again after the cashewnut from which it was taken had already been taxed.

Conclusion: Cashewnut and cashew kernel are not separately taxable under item 12 where tax has already been levied on the cashewnut at first purchase; the levy on kernel is not sustainable and the assessee succeeds.

Ratio Decidendi: Where a taxing entry uses composite language for goods understood in common and commercial parlance as one commodity, the entry must be applied as a single-point levy and any ambiguity must be resolved in favour of the assessee.

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