Sambasiva Rao, J.
1. Whether 'atukulu' (parched rice) and 'muramaralu' (puffed rice) are 'rice' within the meaning of entry 66(b) of Schedule I to the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as the Act), is the common question in all these three matters and hence we are disposing them of under a common judgment.
2. W.A. No. 1 of 1975 is preferred by the assessee against the order of Chinnappa Reddy, J., dismissing Writ Petition No. 7249 of 1974 in limine. In the petition, the petitioners claimed that sales of parched rice cannot be subjected to the levy of sales tax at rates higher than one per cent. The learned Judge dismissed the petition observing that it was open to the petitioners to raise this question in the assessment proceedings and if aggrieved by any orders of assessment, they can agitate the matter again in revision. In that view, the learned Judge dismissed the writ petition, without expressing any opinion on the claim made by the petitioners.
3. W.A. No. 61 of 1976 is against the order of Chennakesava Reddy, J., in W.P. No. 7516 of 1973 Alladi Venkateswarlu and Ors. v. Government of A.P. and Anr. [1976] 37 S.T.C. 375. The petitioners sought a mandamus interdicting the appellants, viz., the sales tax authorities and the Government of Andhra Pradesh, from collecting any sales tax from their sales of powa, muramura and pelalu. The learned Judge gave a mandamus directing the respondent-appellants that they should tax these items in accordance with entry 66(a) or (b), as the case may be, of Schedule I depending on the condition that tax at the purchase point of paddy has already been paid or not under Section 5(2)(b) of the Act. The reasoning of the learned Judge in coming to this conclusion is that these commodities are products of paddy obtained without undergoing any chemical processes. Therefore, no tax could be levied under Section 5(1) of the Act thereby permitting multipoint tax. In the opinion of the learned Judge, these articles are products of paddy and so fall under entry 66(b). If the paddy, out of which they were extracted had not been subjected to tax, they will come under entry 66(a). The State, aggrieved by this decision, has preferred W.A. No. 61 of 1976.
4. In W.P. No. 6909 of 1974, the commodity which is sought to be taxed is parched rice. It is claimed that it is a variety of rice which comes within the ambit of entry 66(b) and the Government's claim to tax the petitioner's parched rice under Section 5(1) of the Act is illegal.
5. Thus, the question which we have posed even at the threshold of our judgment, arises in all these three matters. It is common case that the paddy, out of which these commodities have been made in all the three cases, has been subjected to tax. On the basis of that common ground, the learned counsel for the petitioners contend that these commodities can be taxed only under entry 66(b) of the First Schedule. On the other hand, the learned Government Pleader maintains that they are taxable directly under Section 5(1) of the Act.
6. We may first take note of the contentions raised by Sri Lakshminarayana, who has appeared for the appellants in W.A. No. 1 of 1975. His arguments for the respondents in W.A. No. 61 of 1976 are identical. The learned counsel's first contention is that levy of sales tax on these commodities is unauthorised as it has no legislative sanction and the levy of sales tax on them is violative of the provisions of the Sales Tax Act and Article 265 of the Constitution. Article 265 says that no tax shall be levied or collected except by authority of law. The learned counsel takes the stand that there is no authority of law for imposing any tax on these varieties of goods, as they are not included in any of the schedules of the Act. According to him, tax is now sought to be levied by the sales tax authorities on these articles because of the cancellation of the earlier G.O.Ms. No. 2197 dated 19th December, 1961, by G.O.Ms. No. 208 dated 21st March, 1973. In G.O.Ms. No. 2197 dated 19th December, 1961, the Governor of Andhra Pradesh, in exercise of the powers conferred on him under Section 9(1) of the Act, exempted from the tax payable under Section 5(1) of the Act, the sales of parched rice, muramura, putnalu and pelalu (parched rice). However, by G.O.Ms. No. 208 dated 21st March, 1973, the Government of Andhra Pradesh, once again in exercise of the powers conferred by Sub-section (1) of Section 9 of the Act, cancelled the notification issued in G.O.Ms. No. 2197. Thus, the exemption from tax that had been given under G.O.Ms. No. 2197 to parched rice, muramaralu, etc., was withdrawn with effect from 21st March, 1973. This latter G.O., issued under the order of the Government in G.O.Ms. No. 208 dated 21st March, 1973, is in response to the recommendation of the Board of Revenue. The argument of Sri Lakshminarayana in regard to the lack of power to impose tax on these commodities is twofold. The first of them is that almost all the foodstuffs are included in the schedules, but nowhere in any one of the schedules, these commodities are mentioned. Therefore, according to the Act they are not taxable. Consequently, to impose sales tax on these commodities there is no authority of law as required under Article 265 of the Constitution. This argument ignores Section 5 of the Act. According to it, every dealer (other than a casual trader and an agent of a non-resident dealer), whose total turnover for a year is not less than Rs. 25,000 and every agent of a non-resident dealer, whatever be his turnover for the year, shall pay a tax for each year, at the rate of five paise on every rupee of his turnover. Therefore, there is a general power to impose tax on any dealer whose turnover for a year is not less than Rs. 25,000 on any goods he sells and the rate of taxation is five paise on every rupee of his turnover. Sub-section (2) says that notwithstanding anything contained in Sub-section (1), the tax under this Act shall be levied (a) in the case of goods mentioned in the First Schedule at the rates and only at the point of the sale specified therein and under Clause (b) in the case of the goods mentioned in the Second Schedule at the rates and only at the point of the purchase specified as applicable thereto. If these commodities are not included in Schedules I and II, that does not mean that the Act has not empowered the State to impose the tax on them. There is the general power under Section 5(1) of the Act to impose sales tax of five paise on every rupee of turnover, if the turnover is not less than Rs. 25,000 per year. The learned Government Pleader submits that it is in exercise of this power, the State is seeking to impose tax. Simply because these commodities are not mentioned in Schedules I and II, it does not mean that there is no authority in the State to levy tax on them. The general provision contained in Section 5(1) is the necessary authority.
7. The second contention on the same point advanced by the learned counsel for the appellants is that by cancelling the exemption given under G.O.Ms. No. 2197, under G.O.Ms. No. 208 the Government practically added these items to the list contained in Schedule I. In other words, it is the executive that had added these commodities to the list of items in the schedules. Law-making is essentially a legislative power and the executive cannot arrogate to itself that legislating power and add more items to the list of taxable items. This argument is misconceived in our opinion. Under G.O.Ms. No. 2197, the Government granted exemption from taxation for these articles. That means that when it issued the G.O., it was clearly under the impression that these commodities were taxable under the Act. Now, by withdrawing that exemption by virtue of G.O. Ms. No. 208, they are not adding new items to the list of taxable commodities; they are only withdrawing the previously existing exemption of these goods from taxation. By no stretch of imagination it can be said that new items are added either to the First Schedule or to the Second Schedule. Reliance is placed on State of Kerala v. P.J. Joseph A.I.R. 1958 S.C. 296, to contend that through executive power, a new law cannot be made and tax cannot be made assessable on new items. In the case before the Supreme Court, the Government made an endorsement on the reference made to it by the Board of Revenue that it accorded sanction for extra quota of foreign liquor being allowed to wholesale licensees in Cochin on payment by them of a commission at 20 per cent of the price of liquor. The Supreme Court found that this endorsement was not an order made by the State in exercise of the powers conferred on it by Section 17 of the Cochin Abkari Act. Further, this order was not published in the Gazette nor was it communicated to the licensee from whom the excise authorities demanded the commission of 20 per cent on excess sales. In these circumstances, the court held that the endorsement was not a statutory order passed by the State in exercise of the power conferred on it by Section 17. Therefore, the endorsement had no statutory status and, consequently, the collection of commission of 20 per cent was considered to be unauthorised and illegal. Such is not the case here. A regular notification withdrawing the exemption, which had already been given, has been published in the Gazette. This notification was purported to have been made in exercise of the powers under Section 9(1) of the Act. It is a statutory notification which has got the force of law. Further, G.O.Ms. No. 208 does not purport to impose any new tax nor does it propose to include new items in the list of taxable goods. What all it does is to withdraw the exemption which was in force in regard to certain commodities, from taxation. Therefore, it is only a withdrawal of an exemption and not an imposition, of any tax. As we have stated, the same has been done through a statutory notification, which was published in the official Gazette and made in exercise of the powers under Section 9(1) of the Act. So, there is no lacuna or defect in this order.
8. Then reference is made to Section 40 of the Act, whereunder power is given to the Government to alter, add to or cancel, by notification, any of the schedules to the Act. If a power is sought to be exercised under this provision, the proviso to Section 40 says that no such notification shall be made unless a draft thereof has been approved by the Legislative Assembly. Sri Lakshminarayana asserts that notification in G.O.Ms. No. 208 had not received the approval of the Legislative Assembly and, therefore, it has no force of law. This argument is misconceived in our opinion. Section 40 deals with the power of Government to alter, add to or cancel any of the schedules to the Act by a notification. G.O. Ms. No. 208 does not purport to alter, add to or cancel any of the schedules to the Act. As we have pointed out, it only withdraws the exemption which had already been made in respect of some commodities. By no stretch of imagination can it be said that it would be tantamount to adding these commodities to any of the schedules to the Act. Therefore, the contention that the attempt of the sales tax authorities to collect tax on these commodities is without the authority of law, is untenable and must be rejected.
9. The next contention of Sri Lakshminarayana is that even if these commodities are taxable, they come within the ambit of entry 66(b) of Schedule I. We may usefully read the entire entry 66. It is in the following terms:
___________________________________________________Description Point of levy Rate of taxof the goods____________________________________________________66. Rice-(a) Rice not At the point of 6 paise in thecovered by sub sale by the first rupee.item (b) below. wholesale dealer inthe State effectingthe sale.Provided that a rebate of two paise in the rupee shall be allowed on the rice sold and consumed in the State in accordance with such rules as may be prescribed.b) Rice obtained At the point of 1 paisa in thefrom paddy that sale by the first rupee.'has met tax under wholesale dealer inthis Act. the State effectingthe sale.
10. Reading entry 66, it is clear that it deals with only rice. While sub-item (a) deals with rice, which is not covered by sub-item (b), sub-item (b) deals with rice obtained from paddy that has met tax under this Act. If the paddy out of which rice is obtained has not been subjected to tax, then the rice itself is subjected to tax at the rate of six paise in the rupee at the point of sale by the first wholesale dealer in the State. If, on the other hand, the paddy, out of which the rice has been obtained, was subjected to tax, then tax on such rice is leviable at the rate of one paisa in the rupee at the point of sale by the first wholesale dealer in the State. It is on this basis, our learned brother Chennakesava Reddy, J., came to the conclusion, that even these commodities like parched rice and puffed rice are obtained from paddy and, therefore, they come either under sub-item (a) or (b) of entry 66. Obviously, the learned Judge was under the impression that since these commodities are also obtained from paddy, they are of the same category and nature as 'rice' mentioned in entry 66. That is why he gave a direction that tax should be levied either under sub-item (a) or (b) according to the circumstances of the case. Sri Lakshminarayana does not say that these commodities like parched rice or puffed rice are the same as rice mentioned in entry 66. What he says is that they are of the same category and there is no reason why they should be placed in a more disadvantageous position than actual rice. The learned counsel admits that parched or puffed rice are not rice simpliciter and are different in nature. But he maintains that there is no reason why these commodities, which are also obtained from paddy, should be placed in a more disadvantageous position than actual rice. This argument is patently based on Article 14 of the Constitution, though the learned counsel does not admit that he is relying on the equality right guaranteed to the citizen under Article 14 of the Constitution. The hesitation or reluctance of the learned counsel to press Article 14 into service is obviously for the reason that the said article is now suspended on account of the emergency.
11. Even supposing that the argument based on Article 14 is now available to the petitioners, it is not in dispute that taxation laws must also pass the test of Article 14. It has been so accepted right from Moopil Nair's case, i.e., K.T. Moopil Nair v. State of Kerala A.I.R. 1961 S.C. 552. As laid down by the Supreme Court in East India Tobacco Company v. State of Andhra Pradesh [1962] 13 S.T.C. 529 (S.C.), in deciding whether a taxation law is discriminatory or not, it is necessary to bear in mind that the State has a wide discretion in selecting the persons or objects it will tax and that a statute is not open to attack on the ground that it taxes some persons or objects and not others. It is only when within the range of its selection, the law operates unequally and that cannot be justified on the basis of any valid classification, that it would be violative of Article 14. The following passage from Willis on 'Constitutional Law', page 587, may also be noticed :
A State does not have to tax everything in order to tax something. It is allowed to pick and choose districts, objects, persons, methods and even rates for taxation if it does so reasonably.... The Supreme Court has been practical and has permitted a very wide latitude in classification for taxation.
12. Applying this principle can it be said that there is a discrimination against these commodities as distinct from actual rice. It is not disputed and cannot be disputed that parched and puffed rice are different in several respects from rice as such, though all of them are made out of paddy. 'Rice' is extracted by merely eliminating the husk from the paddy, while parched and puffed rice are made through following other processes. Though both rice as well as these commodities are food materials, the occasions and the manners of their usage also differ. While rice is the staple food of the people of this State, parched rice and puffed rice are not. They are more sparingly used only for snacks and other things. Thus, they are different from actual rice in several material respects. In the exercise of its power to pick and choose objects for taxation, the State have chosen to impose tax at the rate of one per cent on rice which has been made out of paddy which had already been subjected to tax. If the paddy itself has not been subjected to tax, it has chosen to impose tax at the rate of six paise on every rupee of sale of rice. Obviously, the State does not want to bring parched and puffed rice within either category. When they are kept distinct and separate from rice or paddy, they come within the scope of Section 5(1) of the Act. Consequently, tax at the rate of five paise in the rupee is assessable on these commodities. It cannot be said that there is no valid classification between rice on one side and parched and puffed rice on the other. Therefore, even if the contention based on Article 14 is available to the petitioners, it has not been violated in this case.
13. The last contention of Sri Lakshminarayana is that the withdrawal of the exemption contained in G.O.Ms. No. 208 was also issued under Section 9 of the Act. Section 9 only empowers the State Government to make any exemptions or reductions in rate and does not confer power to withdraw these exemptions or reductions. It is also pointed out by the learned counsel that nowhere in the Act any such power to withdraw reductions and exemptions is conferred on the Government. Therefore, the argument is that G.O.Ms. No. 208 revoking the exemption is without jurisdiction and without power and, consequently, the exemption granted under G.O.Ms. No. 2197 continues to be operative. This argument of the learned counsel ignores the provisions of Section 15 of the Andhra Pradesh General Clauses Act. That section provides that where an Act confers a power to make any rules or bye-laws, or to issue orders, the power shall be construed as including a power exercisable in the like manner and subject to the like consent and conditions, if any, to rescind, revoke, amend or vary the rules, bye-laws or orders. Now, Section 9 confers on the State Government a power to grant exemption by notification. That power, according to Section 15 of the General Clauses Act of Andhra Pradesh, takes in also the power to rescind, revoke, amend or vary that order. Therefore, it bears no doubt that the State Government has got the power to revoke the earlier order of exemption granted under Section 9. It is also objected that only the provision of Section 9 is referred to in G.O.Ms. No. 208 and, therefore, the Government of Andhra Pradesh purported to act only under Section 9 of the Act, whereunder they had no power to cancel the exemption. It is true that Section 15 of the A.P. General Clauses Act has not been specifically referred to in G.O. Ms. No. 208. But it is there by necessary implication. When they purported to exercise their power under Section 9 in revoking the earlier order of exemption, the Government of Andhra Pradesh was clearly exercising its power under Section 9 read with Section 15 of the General Clauses Act.
14. However, another contention is advanced by Sri Lakshminarayana saying that even supposing that Section 15 confers power on the State Government to revoke the earlier order, the revocation must be done within the scope and ambit of the power under Section 9 read with Section 15 of the General Clauses Act. There is no doubt in this proposition. We fail to see how the revocation of the earlier exemption granted for these commodities from taxation is outside the scope of Section 9 read with Section 15. Earlier an exemption from taxation was given, which was clearly within the scope of Section 9. Now, that exemption is completely and wholly withdrawn. It is not as if this revocation is applicable only to some persons and not applicable to some other persons. Under G.O.Ms. No. 208, the exemption granted under G.O.Ms. No. 2197 was revoked. Therefore, the argument that this cancellation of the exemption is outside the scope of Section 9 read with Section 15 is unfounded. Reliance is placed on Gopi Chand v. Delhi Administration A.I.R. 1959 S.C. 609. There, the Supreme Court was dealing with an order passed under Section 21 of the Central General Clauses Act. The Supreme Court held that the State Government did not exercise the power to revoke or modify properly, because the power was exercised in an indiscriminate manner. The Supreme Court observed that the power to modify cannot obviously include the power to treat the same area as dangerously disturbed for persons accused of crimes committed in the past and not disturbed for others accused of the same or similar offences committed later. That clearly is a legislative function which is wholly outside the authority conferred on the delegate. It was because of this basic defect in the modification order the Supreme Court held that it was bad. It must be noted that the Supreme Court upheld the existence of the right to modify or revoke an order which had been earlier issued, by virtue of Section 21 of the General Clauses Act. Reference is also made to Nava Samaj Ltd. v. Registrar of Companies A.I.R. 1966 Bom. 218. Here also the court pointed out the defect in the order. It was pointed out that the exemption that could be given under Sub-section (1) relates to the obligation of the companies existing prior to the date of the commencement of the Act to amend their memorandum of association and articles of association, so as to bring the right of vote in the shareholders into conformity with the provisions in Section 87. The power exercised under Section 21 of the General Clauses Act was found to be irregular for that reason and not on the ground that under Section 21 the Government cannot revoke the order which it had earlier passed in accordance with the provisions of the Act. Therefore, these decisions do not help the contentions of the learned counsel. Section 9 of the Act read with Section 15 of the A.P. General Clauses Act certainly authorises the State Government to issue the notification in G.O.Ms. No. 208. These are the three submissions advanced by Sri Lakshminarayana in support of his appeal and none of them has any force.
15. Sri Dasaratharama Reddi, appearing for the petitioner in W.P. No. 6909 of 1974, takes the stand that parched and puffed rice are also rice within the meaning of entry 66(b). According to him, after all these commodities also are extracted from paddy like rice and, therefore, they are also one variety of rice which can be reasonably included in entry 66(a) or (b), according to the facts and circumstances of the case. The learned counsel relied on a Bench decision of this Court in Kayani & Co. v. Commissioner of Sales Tax [1953] 4 S.T.C. 387, where the question was whether cooked rice is also rice. The exemption in that case was claimed under item 1, which read : 'all cereals and pulses including all forms of rice (except when sold in sealed containers) of Schedule I of the Hyderabad General Sales Tax Act'. Jaganmohan Reddy, J. (as he then was), speaking for the Bench, held that the word 'rice' occurring in item 1 of the exempted articles cannot be interpreted as meaning cooked rice or biriyani or polao. This by itself is against the contention of the learned counsel. However, he relies on the following passage occurring at page 390 :
The word 'form' connotes a visible aspect such as shape or mode in which a thing exists or manifests itself, species, kind or variety. Rice in all forms would mean all kinds or variety of rice or species of rice, such as broken rice, kichidi rice, pichodi rice or rice flour, etc.
16. This observation does not help the learned counsel for the reason that item 1, which we have already extracted, specifically used the words 'including all forms of rice'. Therefore, the learned Judge observed that all kinds or varieties of rice come within the ambit of the words 'all kinds of rice'. In entry 66 in Schedule I, only the limited word 'rice' is used and the expression 'all forms of rice' does not find a place therein. On the other hand, a Bench of this Court took a definite view on this question in Yamsani Sudarsanam v. State of Andhra Pradesh [1962] 13 S.T.C. 743. A similar contention was advanced before the learned Judges contending that parched rice is the same thing as rice. Chandra Reddy, C.J. (as he then was), speaking for the Division Bench, held that parched rice is not the same thing as rice. They are two different things and their uses are also different. Therefore, an assessee, who is a dealer in paddy and parched rice, is not entitled to invoke the explanation read with Schedule III, item 6, annexed to the Andhra Pradesh General Sales Tax Act, 1957. This is directly on the question of parched rice and there is no reason why we should differ from the decision taken already. We have also noticed the difference between rice simpliciter and parched and puffed rice. In view of this difference, the legislature obviously wanted to keep them different from rice simpliciter. In Martand Dairy and Farm v. Union of India [1975] 35 S.T.C. 629 (S.C.), the Supreme Court was dealing with a case of cream in sealed containers. Cream in sealed containers, the court treated as a separate and distinct commodity and it was not for the court to launch on obscure fiscal astrology but merely to construe what had been expressed in plain words. To the same effect is the decision in Commissioner of Sales Tax v. Parson Tools and Plants [1975] 35 S.T.C. 413 (S.C.).
17. In view of what we have stated above, none of the arguments advanced for the petitioners is acceptable. Parched and puffed rice are treated differently from rice by the legislature and by the State Government. It may be that both rice and these commodities are made out of paddy, but that does not mean that the legislature and the State Government are bound to treat them alike. They are fully justified in treating them as different commodities in the light of the distinctive features between them. Therefore, we hold that parched rice and puffed rice do not come within the ambit of entry 66 of Schedule I of the Act. Consequently, the writ petitioners are not entitled to claim that these commodities of rice should be taxed only under entry 66(b) of Schedule I of the Act.
18. In the result, the assessee's appeal, W.A. No. 1 of 1975 and the assessee's petition, i.e., W.P. No. 6909 of 1974, are dismissed and the State's appeal, i.e., W.A. No. 61 of 1976, is allowed and the decision Alladi Venkateswarlu and Ors. v. Government of A.P. and Anr. [1976] 37 S.T.C. 375 of Chennakesava Reddy, J., is set aside. Having regard to the circumstances of the case, we direct the parties to bear their costs.