1998 (1) TMI 499

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....ase of abnus leaves plucked and collected from the forest areas in Andhra Pradesh during 1997 season. Beedi leaves are taxable at the point of sale by Corporation at 9 per cent. The petitioners have undertaken to pay the tax as per the provisions of the APGST Act. Accordingly, the Corporation has been demanding the payment of sales tax by the petitioners at 9 per cent by way of reimbursement of the tax payable by the Corporation to the department. The Corporation relied upon the circular issued by the Commissioner of Commercial Taxes in reference No. A1(3)/2312/96, dated October 18, 1996. The impugned portion of the circular issued by the Commissioner is as follows: "Regarding point No. 5, I am to inform that 'G' form cannot be accepted ....

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....arification of the Commissioner is based on a presumption that there is scope for misuse of the concession by the buying dealers. Such misuse will obviously arise in case the buying dealers (petitioners) do not utilise the abnus leaves purchased from the Corporation in the manufacture of beedies. 5.. While the possibility of said misuse cannot be ruled out, there cannot be blanket ban on the acceptance of G forms from the petitioners which facilitated the Corporation and the petitioners in their turn to avail of concessional rate of tax. An omnibus mandate not to accept G forms cannot be countenanced in the light of the specific provision embodied in section 5-B of the APGST Act.   The clarificatory letter of the Commissioner in ....