Vadlaputi Traders Vs. the State of Andhra Pradesh

Vadlaputi Traders vs The State of Andhra Pradesh

Type Court Judgment Court Andhra Pradesh Decided Jun 15, 1988

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Citation: sooperkanoon.com/431981
Court: Andhra Pradesh High Court
Judge: B.P. Jeevan Reddy and ;Bhaskara Rao, JJ.
Decided On: Jun 15, 1988
Case Number: Tax Revision Case No. 78 of 1985
Subject: Sales Tax

Case Summary

AI-generated summary - not the official court judgment text.

Sales Tax - assessment - petitioner contended that weighment charges, cost of packaging material, brokerage and gunnies are not pre-sale expenses but post expenses - also contended that market-fee paid cannot be included in turnover since it is paid directly by him to market-committee - Tribunal agreed with petition...

Key legal issue: Sales Tax

Parties & Advocates

Appellant / Petitioner

Vadlaputi Traders

Advocate P. Srinivasa Reddy and ;S. Dasaratharama Reddi, Advs.

Respondent

The State of Andhra Pradesh

Advocate The Government Pleader for Commercial Taxes

Legal References

Reported In: [1988]71STC419(AP)

Excerpt

.....that not only a product of livestock like milk (when notified by government), butter etc., are products of livestock but even derivative items (derived from a product of livestock) are intended to be product of livestock for the purpose of the act. thus the term ghee is to be interpreted on the basis of expression products of livestock as defined in section 2(xv) of the act. whatever products are declared as such by the government by notification, they become products of livestock for purpose of the act. consequently it was held that ghee is the product of livestock and by reason of power conferred under section 3(1) read with section 3(3) of the act on them it is competent for the government to declare ghee as product of livestock for the purpose of regulating its purchase and sale, in any notified market area. [per p.s. narayana, j,(dissenting)]if livestock or agricultural produce and the categories thereof had been specified in the statute itself by appending in the schedule or otherwise, that would stand on a different footing from the present provisions of the act which contemplate the issuance of notifications in accordance with the procedure ordained by the provisions specified supra. in view of the clear definition of the livestock and products of livestock, the ghee being derivative of butter or cream, if the language employed in definition to be taken as they stand, the only conclusion would be is that the ghee would not fall within ambit of the definitions aforesaid. sections 4 & 3: [v.v.s. rao, n.v. ramana & p.s. narayana, jj] declaration of notified area held, it is only under section 3 that government are required to publish draft notification inviting objections and section 3(3) mandates to consider objections and suggestions before issuing declaration order. it is very conspicuous that section 4 does not contemplate any draft notification inviting objections and suggestions before either constituting market committee, establishing..........the authorities below. the assessing authority gave a show cause notice proposing to include the said amount in the turnover on the ground that they are pre-sale expenses and the only ground upon which the petitioner objected thereto was that they are not pre-sale expenses but post-sale expenses. since the petitioner could not place any material or his account books in support of his contention his objection was overruled and the said amount included in the turnover. it was never argued before any of the authorities that these expenses were not included in the bill of sale or that they were not charged by the seller or that they were directly or independently paid to third parties, as the case may be. on the factual situation, therefore, we cannot allow the petitioner's counsel to raise this new plea since there is no basis for raising the said plea on facts. on the basis the matter has been proceeded with until now, we must hold that the tribunal was right in rejecting the petitioner's contention on the ground that the petitioner, not having maintained accounts properly showing the pre-sale and post-sale expenses, cannot sustain his objection. indeed, there is nothing to show whether the goods were sold in gunnies or packages, nor is there any material to show that the brokerage was paid directly by the petitioner to the broker. the contentions now urged cannot therefore be entertained. the tax revision case accordingly fails and it is dismissed. no costs. advocate's fee rs. 150. 3. petition dismissed.

Full Judgment

Jeevan Reddy, J.

1. The petitioner is a dealer in gingili seeds. For the assessment year 1981-82, he filed a return declaring his turnover. Gingili seeds are taxable at the first purchase point in the State. In his return he showed the value of the gingili seeds purchased as Rs. 9,05,498.85. On a perusal of the accounts, the assessing authority found that the petitioner has incurred an expenditure of Rs. 33,498.97 in connection with the purchase of the said seeds, which the dealer did not include in his turnover. He proposed to include the same in the turnover on the ground that the said amount represents pre-sale expenses. The petitioner submitted an explanation contending that the weighment charges, cost of packing material, brokerage and gunnies are not pre-sale expenses, but post-sale expenses. He also submitted that the market-fee paid cannot also be included in the turnover since it is paid directly by him to the market-committee. The assessing authority rejected the petitioner's contention on the ground that the petitioner has not maintained separate kathas for expenses incurred prior to purchase and afterwards. He observed that these expenses are pre-sale expenses and therefore become part of the turnover. The same view was taken on appeal by the first appellate authority. On further appeal, the Tribunal agreed with the petitioner only to the extent of market-fee but rejected the contention with respect to other expenses, on the ground that the assessee not having maintained separate accounts showing pre and post-purchase expenses there is no material to show the nature of the expenses. In other words, the Tribunal was of the opinion that there is no material produced by the assessee to show that the said expenses were post-sale expenses. The Tribunal also observed that since the petitioner has exported the entire quantity purchased, the question of claiming any exemption from purchase tax does not arise.

2. In this tax revision case it is contended by Shri Srinivasa Reddy, the learned counsel for the petitioner, that unless there was material to show that the expenses on account of brokerage, packing and gunnies were included in the bill prepared by the seller of the said goods or that they were charged by the seller of the said goods, it cannot be said that these expenses must be included within the turnover or within the purchase price. He submits that the brokerage was paid to a third party directly by the purchaser and similarly the gunnies and packing were provided by the purchaser at his own cost after the sale. We, however, find that the grounds now urged were not urged in this form before any of the authorities below. The assessing authority gave a show cause notice proposing to include the said amount in the turnover on the ground that they are pre-sale expenses and the only ground upon which the petitioner objected thereto was that they are not pre-sale expenses but post-sale expenses. Since the petitioner could not place any material or his account books in support of his contention his objection was overruled and the said amount included in the turnover. It was never argued before any of the authorities that these expenses were not included in the bill of sale or that they were not charged by the seller or that they were directly or independently paid to third parties, as the case may be. On the factual situation, therefore, we cannot allow the petitioner's counsel to raise this new plea since there is no basis for raising the said plea on facts. On the basis the matter has been proceeded with until now, we must hold that the Tribunal was right in rejecting the petitioner's contention on the ground that the petitioner, not having maintained accounts properly showing the pre-sale and post-sale expenses, cannot sustain his objection. Indeed, there is nothing to show whether the goods were sold in gunnies or packages, nor is there any material to show that the brokerage was paid directly by the petitioner to the broker. The contentions now urged cannot therefore be entertained. The tax revision case accordingly fails and it is dismissed. No costs. Advocate's fee Rs. 150.

3. Petition dismissed.

Same Court & Year Andhra Pradesh · 1988 Same Parties Vadlaputi Traders vs The State of Andhra Pradesh Same Subject Sales Tax Same Judge B.P. Jeevan Reddy and ;Bhaskara Rao, JJ.

Sales Tax