TaxTMI 
TaxTMI 
1996 (12) TMI 328
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....No. 14547 of 1992. 2.. Appellant No. 1 is a registered dealer under the Andhra Pradesh General Sales Tax Act, 1957. The appellant is a dealer in iron and steel. It purchases iron and steel scrap and ingots in the State of Andhra Pradesh. Iron and steel scrap and ingots are sent by the first appellant to its re-rolling mill which is situated in the State of Karnataka. The raw material is re-rolled into rounds and flats in the re-rolling mills of the appellant. The re-rolled products are brought back to Andhra Pradesh and are sold in Andhra Pradesh. 3. The iron and steel scrap and ingots which are purchased by the appellants are subject to tax in the State of Andhra Pradesh under the Andhra Pradesh General Sales Tax Act, 1957. Under an ....
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....within the Andhra Pradesh State". 5.. The result was that exemption under G.O. Ms. No. 88 became available only to those re-rolled finished products of steel re-rollers which were situated in the State of Andhra Pradesh. Since the appellants' re-roller mills were situated outside Andhra Pradesh the re-rolled products of the appellants became ineligible for this exemption which was made available to local products. 6.. The amended G.O. Ms. No. 88 was cancelled with effect from February 4, 1982. Thereafter, another notification bearing G.O. Ms. No. 498, Revenue, dated March 20, 1984 has been issued under which once again exemption from tax leviable under section 6 of the Andhra Pradesh General Sales Tax Act, 1957, on ingots or billets o....
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.... article came up for consideration before this Court in the case of Firm A.T.B. Mehtab Majid & Co. v. State of Madras [1963] 14 STC 355; [1963] Supp. 2 SCR 435. The court said that sales tax which has the effect of discriminating between goods of one State and goods of another, may affect the free-flow of trade and it will then offend against article 301 and will be valid only if it comes within the terms of article 304(a). In the above case by virtue of rule 16 which had been framed under the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, tanned hides and skins imported from outside the State and sold within the State were subject to a higher rate of tax than hides or skins tanned and sold within the State. This Court uphe....
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....d products from the re-rolled mills which are sold in Andhra Pradesh should be subjected to discrimination on the ground that these products have been manufactured outside the State and not inside the State. There is clear violation of article 304(a) in the present case. 11.. It was, however, contended before us by the department that the exemption notification must be read as a whole and, therefore, if we find the exemption notification to be violative of article 304(a) the entire exemption notification will have to be struck down and not just a portion of it which is discriminatory as contended by the appellants. This question in relation to a taxing statute has been considered by this Court as far back as in 1953 in the case of State ....