Andhra HC (Pre-Telangana)
Sri Ram Khandsari Sugar Mills vs The State Of Andhra Pradesh on 21 April, 1987
Equivalent citations: [1988]71STC392(AP)
Author: B.P. Jeevan Reddy
Bench: B.P. Jeevan Reddy
JUDGMENT Jeevan Reddy, J.
1. Two contentions are urged in this tax revision case. The petitioner is a manufacturer of khandsari sugar. Molasses is a by-product; it is taxed at the rate of 25 per cent at the point of first sale in the State (vide entry 55 of the First Schedule to the Andhra Pradesh General Sales Tax Act). The issue in controversy before the Tribunal and the lower authorities was, whether the petitioner's case that it had destroyed 890.180 metric tonnes of molasses should be accepted ? The assessing authority refused to accept the petitioner's case in that behalf mainly on the ground that no material whatsoever was produced in support of the petitioner's contention. However, before the first appellate authority, two receipts were filed showing that the Nizam Sugar Factory declined to take delivery of two lorry-loads of molasses weighing 19.250 metric tonnes. Except these two receipts, no other evidence was adduced. The appellate authority and the Tribunal, accordingly, accepted the two receipts and gave relief to the extent of 19.260 metric tonnes, but not for the rest. We are unable to see any error or infirmity in the finding of the Tribunal. Molasses is a very valuable product; its sale and distribution is controlled by the Molasses Control Order. Indeed, it is a well-known fact that it commands a very high price in black market, because it is used for manufacturing illicit liquor, and for other purposes. If the petitioner says that it has destroyed such a valuable product, and that too in such a huge quantity, it is for it to establish the said fact. It is for the petitioner to establish and prove the special reasons or circumstances in which it destroyed such a valuable material, which nobody would ordinarily do. Since the petitioner has failed to place any material in support of its claim, the Tribunal rightly held against it, except in so far as the small quantity covered by the two receipts aforementioned, is concerned. We see no reason to interfere on this aspect.
2. The second question relates to firewood. The petitioner's case was that it purchased the firewood from forest contractors and transported the same to its factory at its own cost. Its case was that the transportation charges should be deducted. But, in the account books of the petitioner, transportation charges were not separately shown. A consolidated figure was shown as representing both the cost of firewood and the transportation charges, under the head "firewood". In the circumstances, the authorities were justified in not accepting the petitioner's case.
3. Mr. A. V. S. Ramakrishnaiah, the learned counsel for the petitioner, then contended that section 6-A of the Andhra Pradesh General Sales Tax Act is not applicable to firewood. His case is that unless the goods consumed ultimately become a component of the manufactured product, it cannot be said to have been consumed in the manufacture within the meaning of section 6 A(ii)(a). It is not possible to agree. Firewood is employed to provide energy. It is too ridiculous to say that firewood is not consumed in the manufacture of khandsari sugar.
4. Tax revision case, accordingly, fails and is dismissed with costs. Advocate's fee Rs. 200.
5. Petition dismissed.