Andhra HC (Pre-Telangana)
Etikoppaka Co-Operative Agricultural ... vs Commercial Tax Officer on 29 July, 1999
Equivalent citations: [2000]120STC608(AP)
Author: B. Subhashan Reddy
Bench: B. Subhashan Reddy, K.B. Siddappa
ORDER B. Subhashan Reddy, J.
1. In this T.R.C. arising under the Andhra Pradesh General Sales Tax Act, 1957 ("the APGST Act"), the point for consideration is as to whether the word "sugarcane" taken in even the "sugarcane seedling". The assessee is a co-operative society registered under the A.P. Co-operative Societies Act. It manufactures sugar and was on the rolls of C.T.O., Anakapalli, for the assessment year 1981-82. It was assessed under the APGST Act on a net turnover of Rs. 12,45,580, which included a turnover of Rs. 3,88,265 representing sales of sugarcane seedlings. The said amount was subjected to tax, aggrieved by which, the assessee preferred appeal to the Appellate Deputy Commissioner, Commercial Taxes, Kakinada. Contention was that assessee being an agricultural and industrial cooperative society owning sugar factories, it supplied sugarcane seedlings to the members without any profit-motive and since it had not undertaken any business, it was not liable to tax. The said contention was repelled by the Deputy Commissioner on the ground that the assessee accounted for the seed as purchased and afterwards shown it as sale to members and that the assessee paid money to the seed-suppliers and received money from the members who were the recipients of the seed. It was held that for exigibility of sales tax, profit motive is irrelevant. Aggrieved by the same, appeal was preferred to the Sales Tax Appellate Tribunal. But, by order dated November 5, 1988, the same was dismissed and hence this revision.
2. Same contentions as advanced before the lower authorities have been advanced and the only question is as to whether the amount of Rs. 3,88,265 representing the sales of sugarcane seedlings is exigible to the payment of sales tax under APGST Act.
3. The sugarcane is a commodity exempted from tax Under Section 8 of the APGST Act, as being an item under the Fourth Schedule to the Act. Contention is that sugarcane is procured from its members and after cutting it into smaller pieces, it had supplied to its members as sugarcane seeds to grow it as sugarcane and as such, there is no change or transformation of the nature or character of the sugarcane and that it retains its content and form and continues to enjoy the exemption and that sugarcane seedling could not be considered as unclassified goods which were liable to tax Under Section 5 of the Act and that it is a classified goods under the Fourth Schedule to the APGST Act.
4. Several decisions are cited at Bar by either side, but they are not having any relevance excepting the one in Sakthi Sugars Ltd. v. Deputy Commercial Tax Officer, Bhavani [1969] 23 STC 232 (Mad.). The ratio laid down in the said case has been correctly applied by the Tribunal in the instant case. It is not that smaller pieces of sugarcane cut in the instant case and sold to the users of the sugarcane are used for extraction of juice. It is not in dispute that the sugarcane which is cut into smaller pieces is sold by the society to its members for the purpose of using them as seedlings and as such, it cannot be categorised as sugarcane, which is an exempted item. In the circumstances, we do not see any infirmity in the order passed by the Sales Tax Appellate Tribunal and accordingly, this T.R.C. is dismissed.