Sales tax exemption for cotton fabrics held to continue despite later schedule entry and tax demand

Turnover from transmission beltings was treated as cotton fabrics under the Andhra Pradesh General Sales Tax Act, 1957, and the payment of additional duty of excise under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 brought the goods within the statutory exemption. The later inclusion of the goods in the First Schedule did not override that exemption, because the charging and exemption provisions had to be read together and the exemption remained operative on the facts. The petitioner was therefore not liable to the tax demanded, and the revision cases were allowed.

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Issues: Whether the petitioner was liable to pay tax on the turnover relating to transmission beltings for the relevant assessment year, or whether the turnover was exempt under the Andhra Pradesh General Sales Tax Act, 1957.

Analysis: The dispute turned on the interaction between the charging and exemption provisions of the Andhra Pradesh General Sales Tax Act, 1957 and the schedule entries governing cotton fabrics. The relevant goods were treated as cotton fabrics, and the Court accepted that additional duty of excise had been paid under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. In that setting, Section 8 of the Andhra Pradesh General Sales Tax Act, 1957 operated to grant exemption. The later placement of the goods in the first schedule did not displace the exemption, and the reasoning in the Supreme Court decision concerning the same statutory scheme was applied.

Conclusion: The petitioner was not liable to pay the tax demanded and was entitled to exemption; the revision cases were allowed.

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