CIVIL APPELLATE JURISDICTION: C.A. Nos. 323-332, 1312 & 1174 of 1969. Appeals by certificate from the judgment and a decree dated September 27, 1968 of the Andhra Pradesh High Court of Judicature at Hyderabad in Writ Petitions Nos. 2956, 1798, 1931, 2313, 3372, 3740, 3964, 3956 and 4088 of 1968 and Civil Appeal No. 1518 of 1970. On appeal by certificate from the judgment and order dated March 31, 1970, of the Andhra Pradesh High Court in Writ Petition No. 3501 of 1968 and Appeal by certificate against the judgment and order dated August 25, 1970 of the Andhra Pradesh High Court of Judicature at Hyderabad in Writ Petition No. 4034 of 1970. B. V. Subramanyam and G. Narayana Rao for the appellants (in CA Nos. 323/69 and 1312/69). G. Narayana Rao, for the appellants (in all the appeals). P. Basi Reddy and B. Parthasarathy, for the respondents (in C. As Nos. 323, 332, 1312, 1174/69.) P. Basi Reddy and A. V. V. Nair, for the respondent, (In C.A. No. 1518/70). P. Basi Reddy and P. Parameshwara Rao, for the respondent (In C.A. Nos. 2117/70). The Judgment of the Court was delivered Beg, J. In these appeals by Certificate only one question of law has been argued. It may be formulated as follows : "Is any part of the provision of Item 6 of Schedule III of the Andhra Pradesh General Sales Tax Act (6 of 1957) (hereinafter referred to as ’the Act’) relating to the ’point of levy’ void for contravening Section 15 (a) of the Central Sales Tax Act, 1956 ?" Each of the appellants before us is a miller and one of a large number of such millers who had applied to the High Court of Andhra Pradesh, under Article 226 of the Constitution, for a Writ of Prohibition against proceedings for assessment of Sales-Tax taken on the strength of an allegedly void provision of law. The validity of item 6 of Schedule III of the Act was challenged on a number of grounds in the High Court which need not be mentioned here as the only ground which has been argued before us is covered by the question formulated above. It may be mentioned that none of the appellants set out facts showing the nature of the demand in the proceedings under the Act aganist them, or, the extent, if any, to which each petitioner, who is a miller, registered also as a dealer under the Act as well as under the Central Act, sells groundnuts, or, whether groundnuts were purchased specifically only for purposes of crushing them and converting them into oil or into any other product or for the purpose of sale as well. They have merely questioned the validity of item 6 of Schedule III of the Act by reason of alleged conflict with Section 15 of the Central Act so that all we need do is to set out the two provisions and give our reasons for our conclusions. We have already dismissed the appeals after hearing them. We now proceed to record our reasons. Item 6 of Schedule III reads as follows Description of goods-- Point of levy Rate of tax Groundnuts 3 naya paise
in the rupee
When purchased by a miller
other than a decorticating
miller in the State at the point
of purchase by such miller,
and, in all other cases at the
point of purchase by the last.
dealer who buys in the
State". Groundnuts have been declared as goods of special importance in inter-state trade or commerce under Section 14 of the Central Act. Section 15 of the Central Act lays down:
"15. Every sales tax law of a State shall, in
so far as it imposes or authorises the
imposition of a tax on the sale or purchase of
declared goods, be subject to the following
restrictions and conditions, namely :
(a) the tax payable under that law in
respect of any sale or purchase of such goods
inside the State shall not exceed three per
cent of the sale or purchase Price thereof,
and such tax shall not be levied at more than
one stage;
(b) where a tax has been levied under that
law in respect of the sale or purchase inside
the State of any declared goods and such goods
are sold in the course of inter-State trade or
commerce, the tax so levied shall be refunded
to such person in such manner and subject to
such conditions as may be provided in any law
in force in that State". It may be mentioned that, in so far as the rate of tax specified in item 6, Schedule III of the Act is concerned, the Andhra Pradesh High Court had itself given some relief to the appellants, on the ground that the definition of turn-over under the Act could include what is more than the sale price as defined by the Central Act, so that the rate may exceed the limit imposed by Section 15(a) of the Central Act. We are, therefore, no longer concerned with the question of rate but only with that part of item 6, Schedule III, which makes millers other than decorticating millers liable to pay the tax when they purchase groundnuts. It is contended that the groundnuts purchased by the appellants would be taxed at the point of purchase by them and also again in the hands of "last dealers" to whom they may sell. The short answer to this argument could be that the validity of the levy of a tax upon a purchase by a last dealer could be questioned by one of the appellants only if he was being taxed as a last dealer and not as a miller. It is apparent that they are, being taxed at the point of purchase by them as millers only. When they purchase groundnuts as millers they do so presumably in order to convert the groundnuts into another product altogether, and, they would, therefore, presumably be last purchasers of ground-nuts as "groundnuts". They may be selling their products in forms other than groundnuts. The appellants are, however, not questioning the validity of a tax upon any sales of these other products. They are questioning the validity of the tax on ground-nuts purchased by them. They submit that only one point of taxation can be provided for these sales by a State law. We will, therefore, consider this ground. It is clear to us that, in such cases, the liability to pay tax, which is a tax on purchase, falls only at one point. In fact, the question raised before us seems to us to be covered by a decision of this Court on item 6 of Schedule III in Sri Venkateswara Rice, Ginning & Groundnut Oil Mill Contractors Co. etc. v. The, State of A. P. & Ors. (1) where this Court said at page 5 3 :
"None of the assessees before us is a
decorticating miller. Hence we have to see
whether the purchases of’ groundnut made by,
them did not become taxable as soon as they
made those purchases. it is now well settled
that even under the Sales Tax laws, the charge
in respect of a sale or purchase becomes
effective as soon as the sale in the case of
purchase tax is made, though the liability of
the dealer can be computed only at the end of
the year. The incurring of the charge is one
thing and its computation is a totally
different
(1) A.I.R. 1972 S.C.51.
thing.. Hence the turnover relating to the
purchases with which we are concerned in these
appeals became charged with the liability to
pay tax as soon as those purchases were made
by the assessee-millers. To restate the
position, whenever a miller purchases ground-
nut, the turnover relating to that purchase
becomes exgible to tax subject to such
exemptions as may be given under the Act.
This means that as soon as a first miller
purchases groundnut, the turnover relating to
that purchase, the question of exemption
apart, becomes liable to tax. This is also
the view taken by the High Court". It may be mentioned here that, in the above mentioned case, the assessee had already been taxed and one of the arguments advanced there was that the part of the taxed turnover which was sold by the assessee miller to other millers should be excluded because it was not dealt with by him as a miller but as a dealer who was not the last purchaser. The Court said
"The next argument advanced on behalf of the
assessees is that in the case of some of the
assessees a part of the groundnut purchased
had, been sold to other millers; hence in
those cases, the assessees must be taxed only
in respect of that part of the turnover which
relates to groundnut which they had crushed
for extracting oil and in the case of
remaining part, it is the last dealer who
purchased the same should be taxed. This
contention again is unacceptable. As
mentioned earlier the event which attracted
tax is the act of the miller purchasing
groundnut and not his act of crushing the
groundnut purchased or dealing with that
groundnut in any other manner. We have
earlier mentioned that very act of purchase by
a miller attracts the liability to pay tax
under Section 5 read with Schedule 3 item 6.
His subsequent dealings in those goods become
irrelevant. In none of the cases before us it
was shown that any of. the assessees had pur-
chased groundnut with a view to sell them.
Hence we need not go into the question as to
what would be the position in law where a
miller purchases some ground-nut for milling
and the rest for sale’. In the cases before us also we need not consider the position of a miller who purchases some groundnuts for milling and the rest for sale. It is clear that each of the appellants becomes liable to the payment of tax as a purchasing miller just as a last dealer would be liable on the purchases made by him. Hence, the last dealer and the miller, who purchases presumably to convert the groundnuts into other products, are placed on an equal footing. We were not satisfied that there is a possibility of double taxation or of taxation of the same product at more than one point of purchase. These appeals were, therefore, dismissed by us on 1-5-1972. The respondents are entitled to their costs in this Court. G.C. Appeals dismissed. -L152 Sup CI/ 73