TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether sales tax was payable on the royalty and extraction charges payable under the agreement for supply of bamboo and hardwood. (ii) Whether the petitioner was entitled to refund of sales tax already collected for the earlier period.
Issue (i): Whether sales tax was payable on the royalty and extraction charges payable under the agreement for supply of bamboo and hardwood.
Analysis: The levy could be sustained only if the transaction constituted a sale attracting tax under the Andhra Pradesh General Sales Tax Act, whether under section 6-A or under section 5(2) read with the First Schedule. The agreement between the parties was in the same terms as the agreement earlier considered in the paper mills case, and the principle applied there, following the Supreme Court, was that where the contractual arrangement does not amount to a sale, sales tax cannot be levied on the amount described as royalty or extraction charges. The same reasoning was held applicable to bamboo as well as hardwood.
Conclusion: Sales tax was not payable on the royalty and extraction charges, and the State was restrained from demanding or collecting such tax prospectively.
Issue (ii): Whether the petitioner was entitled to refund of sales tax already collected for the earlier period.
Analysis: The petitioner did not plead or prove that the tax burden had not been passed on to consumers. In the absence of such an averment, the Court applied the presumption that the burden had been passed on, and held that refund would result in unjust enrichment. Section 33-BB of the Andhra Pradesh General Sales Tax Act was treated as reflecting the same principle, namely that tax already collected need not be refunded unless the dealer proves that it was not recovered from purchasers.
Conclusion: Refund of the sales tax already collected was refused.
Final Conclusion: The challenge to future collection succeeded, but the claim for refund of the tax already realised failed, so the writ petition was disposed of with partial relief.
Ratio Decidendi: Sales tax cannot be levied where the underlying agreement does not amount to a sale, but refund of tax already collected is barred where the burden has been passed on and the claimant cannot show that retention by the State would be inequitable.
TaxTMI 
