Tax reduction for rice from paddy allows only set-off, not refund, and a deleted proviso does not survive amendment.

The statutory reduction of tax for rice procured from paddy allowed only the prescribed set-off of tax already levied on paddy and did not create any right to refund or reimbursement when the sale price of rice fell below the cost of paddy. The Andhra Pradesh HC held that the word "reduced" in the sales tax scheme could not be read as "reimbursed" or as authorising repayment of tax on paddy. It also held that once the amending Act deleted the earlier schedule entry and substituted a new one, the proviso attached to the deleted entry could not survive independently. The assessees therefore failed.

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Issues: Whether the expression "reduced" in section 15(c) of the Central Sales Tax Act, 1956 and the corresponding explanation in the Andhra Pradesh General Sales Tax Act, 1957 entitled rice-millers to refund or reimbursement of tax where the sale price of rice was lower than the purchase price of paddy; and whether the deleted proviso in the earlier schedule entry continued to operate after amendment.

Issue (i): Whether the expression "reduced" entitled the assessees to refund or reimbursement of tax on the difference amount.

Analysis: Paddy and rice are distinct declared goods and the statutory scheme levies tax on them at different points, while providing a limited set-off so that tax already levied on paddy is reduced from the tax payable on rice procured from that paddy. The word "reduced" is used on the premise that the price of rice normally exceeds the price of paddy. A temporary market situation in which levy-rice fetches less than the cost of paddy and milling charges does not convert the statutory reduction into a right to refund. The expression cannot be equated with "reimbursed" or read as authorising repayment of tax paid on paddy when the rice sale price is lower.

Conclusion: The assessees were not entitled to refund or reimbursement on the difference amount.

Issue (ii): Whether the deleted proviso in the earlier entry of the Third Schedule survived the amendment.

Analysis: The amending Act deleted the earlier entry in column (2) and substituted a new entry in its place. The proviso attached to the deleted entry could not survive independently after the substitution. The contention rested on reading the judgment as if it were statutory text, which was impermissible.

Conclusion: The deleted proviso did not continue to operate after the amendment.

Final Conclusion: The statutory scheme allowed only a reduction of tax in the manner prescribed and did not permit a refund merely because the sale price of rice fell below the cost of paddy. The revisions therefore failed.

Ratio Decidendi: Where a taxing statute provides that tax on rice shall be reduced by the tax already levied on the paddy from which it is procured, the provision authorises only the prescribed set-off and does not create a right to refund or reimbursement when the rice realisation is less than the cost of paddy.

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