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of <h1>Court Upholds Sales Tax Act Provision, Directs Proper Procedure for Appeal</h1> The court dismissed the challenge to the provisional assessment order, upheld the constitutional validity of clause (c) of Section 6-A of the A.P. General ... - Issues Involved:1. Challenge to the provisional assessment order.2. Constitutional validity of clause (c) of section 6-A of the A.P. General Sales Tax Act, 1957.3. Applicability of section 6-A in relation to article 286 of the Constitution.4. Interpretation of the Supreme Court's decision in State of Karnataka v. B.M. Ashraf & Co.5. Proper procedural recourse for the petitioner.Detailed Analysis:1. Challenge to the Provisional Assessment Order:The petitioner, a dealer in chillies, contested the provisional assessment order dated May 22, 1999, for the month of March 1999. The petitioner initially disclosed a net turnover of Rs. 2,70,46,276 but later filed a revised return claiming exemption on Rs. 2,72,09,812, asserting these purchases were made in the course of export under section 5(3) of the Central Sales Tax Act, 1956. The assessing authority found deficiencies in the documents provided and concluded that the petitioner did not conclusively prove his claim as a buying agent on behalf of non-resident principals. The authority also noted that there was no provision for filing a revised return under the Act and that the petitioner should have paid tax according to the original returns. The petitioner bypassed the appeal process and directly filed a writ petition.2. Constitutional Validity of Clause (c) of Section 6-A:The petitioner argued that clause (c) of section 6-A violated article 286 of the Constitution, claiming that the tax under section 6-A applied to goods dispatched out of the state in the course of export, which should be exempt. The court found no constitutional infirmity in clause (c) of section 6-A. The omission to make an exception for out-of-state dispatches in the course of export does not invalidate the exception for inter-State sales. The court emphasized that section 6-A is subject to article 286 and section 5 of the Central Sales Tax Act, 1956, and that section 38 of the A.P. General Sales Tax Act, 1957, reiterates that sales or purchases in the course of export cannot be taxed.3. Applicability of Section 6-A in Relation to Article 286:The court clarified that section 6-A operates in respect of a taxable event anterior to the sale or purchase in the course of export. Therefore, any tax liability under section 6-A does not infringe article 286, as it does not apply to sales or purchases in the course of export. The court stated that if any sale or purchase in the course of export becomes liable to tax under section 6-A, the entire section would be invalid, but there is no provision in section 6-A that sanctions such a tax.4. Interpretation of Supreme Court's Decision in State of Karnataka v. B.M. Ashraf & Co.:The petitioner contended that the assessing authority misapplied the Supreme Court's decision in B.M. Ashraf & Co., which conflicts with State of Tamil Nadu v. M.K. Kandaswami. The court found no real conflict between the two decisions. The decision in Ashraf's case does not suggest that purchases in the course of export attract purchase tax. The court clarified that the local purchase preceding the export sale was liable to tax, not the purchases in the course of export. The court emphasized that if the petitioner substantiates that his purchase was in the course of export, section 6-A would not apply, and Ashraf's case would not impede immunity from tax.5. Proper Procedural Recourse for the Petitioner:The court noted that the petitioner should have filed an appeal instead of directly approaching the court. The petitioner was directed to file an appeal within 15 days, which the appellate authority must entertain and dispose of on merits without raising any objection as to limitation. The court also directed that no steps should be taken for recovery of the disputed tax for six weeks to allow the petitioner to seek a stay pending the appeal.Conclusion:The writ petition was disposed of with directions for the petitioner to file an appeal, and the prayer for declaring clause (c) of section 6-A unconstitutional was rejected. The court made no order as to costs and directed the office to return the original impugned order.
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