Andhra HC (Pre-Telangana)
I. T. C. Classic Finance And Services vs Commissioner Of Commercial Taxes on 7 March, 1995
Equivalent citations: 1995(1)ALT563
JUDGMENT M.N. Rao, J.
1. In this batch of six cases, the common question for consideration concern the application of section 5-E of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as "the Act") to the hire transaction of M/s. I.T.C. Classic Finance and Services Ltd., Secunderabad - the appellant in Spl. Appeal No. 1 of 1995 and the petitioner in the other five write petitions. We are, therefore, inclined to dispose of all the six cases by this common judgment.
2. M/s. Classic Finance and Services Ltd. (hereinafter referred to as "the assessee") is a limited company incorporated under the Companies Act, 1956, with its registered office at 5/2, Russel Street and branch office at No. 31, Sarojini Devi Road, Secunderabad. The assessee is registered dealer under the Andhra Pradesh General Sales Tax Act and the Central Sales Tax Act. It ia a finance company. It hires machinery, plant and equipment to different parties for rent. It purchases goods according to the specifications of the customers and instructs the supplier/manufacturer to consign the goods directly to the customer, who takes the same on hire.
3. During the assessment year 1988-89, the total receipts of the assessee towards rentals received came to Rs. 1,23,48,118 and in respect of the entire turnover, the assessee claimed exemption on the ground that the same was not exigible to tax under section 5-E of the Act since such an assessment would be violative of the provisions of article 286 of the Constitution of India read with section 4 of the Central Sales Tax Act and section 38 of the Act relying upon the ruling of the Supreme Court in Builders Association of India v. Union of India [1989] 73 STC 370. The assessing authority-the Commercial Tax Officer, S.D. Road Circle, Secunderabad-rejected the claim of the assessee on the view that "the dealer received the lease amounts as against outside assets leased out in Andhra Pradesh. The assets received from outside the State did not suffer tax under the APGST Act. Hence their claim of exemption is not considered". After giving exemption to a turnover of Rs. 83,28,954, which represented local purchases from registered dealers, the assessing authority brought to tax the balance of the turnover of Rs. 40,19,164. The entire turnover subjected to tax represent rentals received and receivable by the assessee against assets purchased from outside the State of Andhra Pradesh and leased out in the State of Andhra Pradesh. This turnover was classified under two heads by the assessing authority : (i) rentals receivable and received against the asset purchased outside the State and leased out in Andhra Pradesh (collected at Hyderabad); and (ii) rentals received against the assets moved from outside the State and leased out in Andhra Pradesh.
4. Aggrieved by that, the assessee carried the matter in appeal to the Appellate Deputy Commissioner, Commercial Taxes, who, by his order dated April 27, 1994, in Appeal No. B/57/93-94, relying upon the decisions of the Supreme Court in Builders Association of India [1989] 73 STC 370 and Gannon Dunkerley & Co. v. State of Rajasthan [1993] 88 STC 204 accepted the contentions raised on behalf of the assessee that the goods have been purchased from outside the State in pursuance of a completed contract of lease and the goods have directly moved from outside the State to the lessee and granted relief in respect of a turnover of Rs. 26,78,987 in regard to which "the authorised representative placed evidence" and dismissed the appeal in respect of the balance of the turnover - Rs. 9,89,702 for which no evidence could be produced.
5. The Commissioner of Commercial Taxes felt that the view taken by the Appellate Deputy Commissioner "was prejudicial to the interests of the Revenue" in the light of the judgment of the Bombay High Court in 20th Century Finance Corporation Limited v. State of Maharashtra [1989] 75 STC 217. A show cause notice was, therefore, issued by the Commissioner in his Ref. L.V(1) 1122/94 dated October 15, 1994, proposing to revise the appellate order by setting it aside under section 20(1) of the Act and restore the original assessment order passed by the Commercial Tax Officer on March 23, 1993 and called upon the assessee to produce all documentary evidence in support of its contentions that the turnover, in respect of which relief was granted by the Appellate Deputy Commissioner was not liable to tax under section 5-E. It was mentioned in the show cause notice that the Appellate Deputy Commissioner has also not taken into account :
"1. The lessor, i.e., Classic Finance is the owner of the goods as per agreement.
2. They issued 'C' forms for the purchase of machinery to be leased out.
3. Though the goods were moved from other States, they were put to use in Andhra Pradesh only where the taxable event occurred." A detailed reply, citing various decisions of the Supreme Court and several High Courts, was submitted by the assessee on December 23, 1994. The assessee has pointed out the difference between section 2(10) of the Maharashtra General Sales Tax Act defining the expression "sale", which was considered by the Bombay High Court in 20th Century Finance Corporation Limited [1989] 75 STC 217 and section 2(n) of the APGST Act and pleaded that the assessment order was passed by the Commercial Tax Officer without any investigation into the full facts of the case, without correctly understanding and applying the relevant case law and that the transactions in question being inter-State transactions, the same are immune from exigibility to tax under section 5-E of the Act. By his order dated December 28, 1994, passed under section 20(1) of the Act in proceedings No. L.V(1)/ 1122/94, the Commissioner, rejected the explanation of the assessee, set aside the order of the Appellate Deputy Commissioner and restored the original assessment order. The following is the reasoning discernible from the order of the Commissioner for allowing the revision :
6. The assessee purchased the goods and gave instructions to the manufacturer to deliver the goods to the lessees and so "the movement of the goods originated from the manufacturer of the goods and that movement started because of the purchase order placed by the assessee with the manufacturer outside the State of Andhra Pradesh. And so the cause of action for the inter-State movement of the goods was the purchase order placed by the assessee with the manufacturer which, incidentally, might have dated by the lease agreement. To say that the lease agreement occasions the movement of the goods is not correct. It is only the purchase order which occasioned the movement of the goods, for in the absence of the the purchase order, with the lease agreement only, the movement of the goods could not have begun. Hence to say that the contract of lease is an inter-State sale is not correct. In case the lessee had directly ordered the goods on lease with the manufacturer, and the manufacturer moved the goods based on the lease agreement to the lessee directly, then it might be possible to say that the lease agreement occasioned the movement of the goods; and that the lease, as a deemed sale, is an inter-State sale. The intermediation of the assessee herein removes. law direct link between the lessee and the manufacturer of the goods. They are two different and independent transactions, viz., lease agreement and purchase order.
7. The transfer of the right to use the goods necessarily involves delivery of possession from the transferor to the transferee and such delivery is different from custody. "The taxable event under section 5-E takes place only if physical possession of the goods is given to the lessee". There is difference between appropriation of the goods involved in an inter-State sale between the manufacturer and the assessee and the appropriation of the goods to the lease contract between the assessee and the lessee. The first appropriation is complete when the manufacturer consigns the goods to inter-State sale with the assessee but the second takes place only when the goods are physically delivered to the lessee for, "for a deemed sale under section 5-E of the APGST Act, physical possession is a must. Only then, there can be a real and usable right to use the goods". Distinguishing a lease transaction from an outright sale, the Commissioner observed : "wherever the lease transaction might have originated, when the goods are within the State of Andhra Pradesh, the lease rentals arising for that period when the lease rights are enjoyed within the State of Andhra Pradesh, that part of the lease agreement has to be treated as a deemed sale within the State of Andhra Pradesh and is liable to tax under section 5-E of the Act".
8. Aggrieved by that, the assessee preferred statutory appeal under section 23(1) of the Act to this Court - Spl. A. No. 1 of 1995. In respect of five assessment years, the assessee filed five writ petitions as detailed below :
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W.P. No. Assessment year Turnover Tax due Tax paid
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12656 of 1991 1989-90 45,49,375 3,25,280 3,25,280 12673 of 1991 1990-91 74,73,866 4,93,275 4,93,275 12672 of 1991 1991-92 85,09,904 6,08,458 6,08,458 21481 of 1994 1993-94 4,31,54,494 23,81,725 Not paid 22349 of 1994 1994-95 3,92,80,276 28,08,540 Not paid (up to August, 1994)
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In respect of the assessment years 1989-90 and 1990-91, final assessment orders were passed on January 21, 1994 and October 11, 1994 respectively. The final assessment for the assessment year 1989-90 was Rs. 3,25,280, which was already paid. The final assessment for the year 1990-91 was Rs. 3,65,268 but the tax as per the provisional assessment was Rs. 4,93,275, the excess tax paid was Rs. 1,28,007. The final assessment orders were passed during the pendency of the writ petitions. For the assessment years 1989-90 and 1990-91, no appeals were filed against the final assessments but in respect of the assessment year 1993-94, an appeal was filed but stay was declined by the appellate authority.
9. Before considering the contentions advanced, it is necessary to notice the relevant decisional law, constitutional and statutory provisions .
10. In Gannon Dunkerley & Co. (Madras) Ltd. v. State of Madras [1954] 5 STC 216 (Mad.); AIR 1954 Mad. 1130, certain turnovers (after deducting certain percentage towards labour charges) representing the monies received by the company in respect of certain contracts carried out were subjected to tax under the Madras General Sales Tax Act, 1939. The turnovers represented the value of the materials used in building contracts. The assessment was challenged on the ground that there was no element of sale of the materials in a building contract and that such a contract was an integral one which could not be split-up. The Madras High Court held that the transactions were not contracts for sale of goods as defined under the provisions of the Sale of Goods Act, 1930, which was in force on the date on which the Constitution of India came into force and, therefore, the company was not liable to pay sales tax on the disputed turnovers. On the same question, there was divergence of opinion by different High Courts. Ultimately, the Supreme Court of India in State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. [1958] 9 STC 353 affirmed the view taken by the Madras High Court overruling the contrary view taken by the High Courts of Nagpur, Rajasthan, Mysore and Kerala. The Government of India also received reports from the State Governments that large scale avoidance of Central sales tax leviable on inter-State sale of goods was taking place through the device of sending goods from one State to another. In Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi [1978] 42 STC 386, the Supreme Court ruled that the receipts from food and drinks supplied to guests staying in a hotel could not be split up into one of service and the other of sale of food and drinks and so, the proprietor, who provides many services in addition to the supply of food was not liable to pay sales tax on the value of the goods supplied by him. The Law Commission of India considered all these matters in its 61st Report and recommended certain amendments to the Constitution of India, in consequence of which, Parliament enacted the Constitution (Forty-sixth Amendment) Act, 1982, by which clause (29A) was inserted in article 366. It reads :
"(29A) 'tax on the sale or purchase of goods' includes -
(a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration;
(b) a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract
(c) a tax on the delivery of goods on hire-purchase or any system of payment by instalments
(d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;
(e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration;
(f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made."
11. Entry 92-A of List I of the Seventh Schedule to the Constitution confers power on the Union to levy tax on sale and purchase of goods other than newspapers where such sale or purchase takes place in the course of inter-State trade or commerce. Entry 54 of List II of the Seventh Schedule confers power on the State Legislatures to levy tax on the sale or purchase of goods other than newspapers subject to the provisions of entry 92-A of List I.
12. Clause (1) of article 286 injuncts a State from making any law for the purpose of imposing or authorising imposition of a tax on the sale or purchase of goods where such a sale or purchase takes place (a) outside the State; or (b) in the course of the import of the goods into or export of the goods out of, the territory of India. Parliament is empowered by clause (2) to formulate principles to determine when a sale or purchase of goods takes place in any of the ways mentioned in clause (1). Clause (3) of article 286 was substituted by a new clause, which reads :
" (3) Any law of a State shall, in so far as it imposes, or authorises the imposition of, -
(a) a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce; or
(b) a tax on the sale or purchase of goods, being a tax of the nature referred to in sub-clause (b), sub-clause (c) or sub-clause (d) of clause (29A) of article 366, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify."
13. Sections 3 and 4 of the Central Sales Tax Act contain provisions as to when a sale or purchase of goods is said to take place in the course of inter-State trade or commerce and outside a State. These limitations are incorporated in section 38 of the APGST Act.
14. By virtue of the Constitution (Forty-sixth Amendment) Act, legislative power was conferred on State Legislatures to levy sales tax on transactions which are strictly not sales falling within the purview of the Sale of Goods Act but covered by sub-clauses (a) to (f) of clause (29A) of article 366 of the Constitution, and accordingly, various State Legislatures brought amendments to the sales tax laws. In the State of Andhra Pradesh, it was done by Act No. 18 of 1985 which came into force with effect from July 1, 1985. Section 2(n) defines the expression "sale" as follows :
"(n) 'Sale' with all its grammatical variations and cognate expressions means every transfer of the property in goods whether as such goods or in any other form in pursuance of a contract or otherwise by one person to another in the course of trade or business, for cash, or for deferred payment, or for any other valuable consideration or in the supply or distribution of goods by a society including a co-operative society, club, firm or association to its members, but does not include a mortgage, hypothecation or pledge of, or a charge on goods.
Explanation I. - ............
Explanation II. - (a) Notwithstanding anything contained in the Indian Sale of Goods Act, 1930 (Central Act III of 1930) a sale or purchase of goods shall be deemed, for the purpose of this Act to have taken place in the State, wherever the contract of sale or purchase might have been made, if the goods are within the State.
(i) in the case of specific or ascertained goods, at the time the contract of sale or purchase is made; and
(ii) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale or purchase by the seller or by the purchaser, whether the assent of the other party is prior or subsequent to such appropriation.
(b) Where there is a single contract of sale or purchase of goods situated at more places than one, the provisions of clause (a) shall apply as if there were separate contracts in respect of the goods at each of such places.
Explanation III. - Notwithstanding anything contained in this Act or in the Indian Sale of Goods Act, 1930 (Central. Act III of 1930), two independent sales or purchases shall for the purposes of this Act, be deemed to have taken place, (1) when the goods are transferred from a principal to his selling agent and from the selling agent to his purchaser; or (2) when the goods are transferred from the seller to a buying agent and from the buying agent to his principal, if the agent is found in either of the cases aforesaid -
(i) to have sold the goods at one rate and have passed on the sale proceeds to his principal at another rate; or
(ii) to have purchased the goods at one rate and to have passed them on to his principal at another rate; or
(iii) not to have accounted to his principal for the entire collections or deductions made by him, in the sales or purchases effected by him on behalf of his principal; or
(iv) to have acted for a fictitious or non-existent principal Explanation IV. - A transfer of right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration shall be deemed to be a sale."
15. Section 5 speaks of levy of tax on sales or purchases of goods, every dealer is liable to pay a tax under the Act on every rupee of his turnover of sales or purchases of goods in each year irrespective of the quantum of his turnover at the rates of tax and at the points of levy specified in the Schedules. Section 5-E, on the basis of which the disputed turnovers were brought to tax, is in the following terms :
"5-E. Tax on the amount realised in respect of any right to use goods. - Every dealer who transfers the right to use any goods for any purpose, whatsoever, whether or not for a specified period, to any lessee or licensee for cash, deferred payment or other valuable consideration, in the course of his business shall, on the total amount realised or realisable by him by way of payment in cash or otherwise on such transfer or transfers of the right to use such goods from the lessee or licensee, pay a tax at the rate of five paise in every rupee of the aggregate of such amount realised or realisable by him during the year :
Provided that no such tax shall be levied if the total turnover of the dealer including such aggregate is less than Rs. 1,00,000."
The transactions covered by section 5-E are one kind of bailments.
16. Sri Anantha Babu, learned counsel for the assessee, has urged that deemed sales cannot be distinguished from ordinary sales for the purpose of taxation under the Act. If the goods hired by the assessee were brought from outside the State into the State of Andhra Pradesh for fulfilling the contract of hire, they are inter-State transactions not amenable to tax under the Act. The movement of the goods was as a result of a contract of sale. It was only when the customers place orders, the assessee purchases the goods from the manufacturers, who consign the goods directly to the customers. But for the orders received from the customers, the assessee would not have purchased the goods from the manufacturers. There was no privity of contract between the customers of the assessee and the manufacturer of the goods and when the manufacturer delivered the goods to a common carrier, the delivery; in fact to the assessee and in law it constitutes also a delivery by the assessee to its customer. Where goods are handed over, to a common carrier, delivery in terms of section 149 of the Contract Act is effected and, therefore, the taxable event occurs only India State (Tamil Nadu) from where the movement of goods had begins. The taxable transaction being the transfer is liable to tax under section 5-E is not the totality of the property in the goods but only to use. In determining whether a particular transaction is an inter-State transaction, the situs is not relevant. If a literal construction of section 2(n) were to lead to the conclusion that even inter-State transactions could be brought to tax. The provision would be unconstitutional and so in order to avoid such an eventuality, it must be read down as excluding inter-State transactions.
17. The second contention urged by the learned counsel is that the pattern of taxation under the Act is to subject every commodity to tax only at one point. The hiring, according to the learned counsel, being a second sale, the charges collected by the assessee, therefore, are not liable to tax under section 5-E.
18. The third contention urged is that by virtue of G.O.Ms. No. 1388 dated December 23, 1985, which was rescinded with effect from July 7, 1993, in respect of transactions for which the taxable event has occurred prior to July 7, 1993, exemption was in force and, therefore, they are immune from taxation. That immunity is not destroyed by the subsequent withdrawal of the exemption notification because the exemption was to the dealer and not to any portion of the turnover exigible to tax in a particular assessment year. The learned counsel also submitted written arguments.
19. In opposition to this, the learned Government Pleader advanced a threshold argument that the writ petitions are not maintainable since the assessee has an effective alternative remedy by way of an appeal provided under the statute. Alternatively, he urges that even on the merits, the special appeal as well as the writ petitions deserve to be dismissed. A transaction of sale is different from hiring goods for remuneration; both are independent transactions and are exigible to tax separately. While conceding that inter-State transactions cannot be subjected to tax by a State law because of the constitutional limitations engrafted in article 286 of the Constitution, the provisions of sections 3 and 4 of the Central Sales Tax Act and section 38 of the APGST Act, he has laid emphasis on the aspect that the transactions in question are independent of inter-State transactions. Only on the hire charges received by the assessee in respect of the goods which were hired out in the State of Andhra Pradesh, tax is levied under section 5-E and, therefore, the same cannot be faulted. In support of these contentions, reliance was placed upon the decision of the Bombay High Court in 20th Century Finance Corporation Limited [1989] 75 STC 217.
20. In view of the final order passed by the Commissioner of Commercial Taxes while exercising revisional jurisdiction under section 20(1) of the Act that "the lease rentals received by the assessee from his customers (lessees) are in respect of the goods purchased outside the State and directly delivered to the customers", we are not inclined to accept the contention of the learned Government Pleader that the writ petitions should be dismissed on the ground of availability of alternative remedy. The appellate authority will naturally be inclined to follow the view taken by the revisional authority.
21. We will deal first with Special Appeal No. 1 of 1995 wherein the revisional order of the Commissioner of Commercial Taxes is challenged. In the impugned order, the Commissioner, illustratively, has discussed one transaction between the assessee and M/s. Railis India Limited, presumably due to the reason that all the other transactions are similar. M/s. Rallis India Ltd., Secunderabad, addressed a letter dated February 21, 1988 to the assessee for taking on lease, a photo copier with 2 KVA voltage stabilizer. It reads :
"We are interested in taking on lease from you on standard conditions, the following equipments :
Details of equipment Name of manufacturer/supplier
1. Photo copier Modi xerox 2 2 KVA V. Stabilizer Modi xerox We have inspected the abovesaid equipments at the manufacturer's/supplier's place. We request you to please purchase the abovementioned equipments and arrange to transport the same from the place of supplier/manufacturer directly to our place of business mentioned hereunder :
Railis India Limited, 1-7-241/11, S.D. Road, Secunderabad.
12. We undertake to abide by the mutually agreed special terms and conditions which are hereinafter set forth.
1. Lease rental : Rs. 7,567 per quarter.
2. Lease management fee : at 1 per cent of the cost of the equipment.
3. Minimum residual value :- per cent of the cost of the equipment.
4. We have placed an order on our supplier M/s. Modi Xerox Ltd., Rampur, which you may please confirm.
We look forward to have a mutually beneficial business relationship."
23. The letter clearly shows that the equipment was already inspected by the customer at the place of the manufacturer/supplier and also placed an order for supply in anticipation of confirmation by the assessee. The manufacturer - M/s. Modi Xerox-raised an invoice dated March 7, 1988, against the assessee showing the consignee's address as M/s. Rallis India Limited, the lessee of the assessee. The agreement for lease of the equipment between the assessee and the lessee-M/s. Rallis India Limited-concluded on April 6, 1988, was for a period of 60 months renewable with mutual consent. It was concluded at Calcutta where the head office of the assessee is located. The lessee is referred to as M/s. Rallis India Ltd., a company incorporated under the Companies Act with its registered office at 21, Damodardas Sukhadwala Marg, Bombay. The details of the equipment are mentioned in the first schedule to the agreement. It is mentioned in the agreement that the lessor (assessee) offered to give on lease and the lessee (M/s. Rallis-India Ltd.) offered to take one, lease the equipment mentioned in the first schedule. Both the parties declared that the lessor has handed and the lessee has taken over possession of the equipment. The agreement, inter alia, incorporates the following conditions
(i) The lessor is the absolute owner of the equipment and will not assign the rights under the agreement in favour of any other person, than its bankers.
(ii) The possession of the equipment will be with the lessee, who shall have control over the same at the locations indicated in column No. 3 - premises of M/s. Rallis India Ltd., at S.D. Road, Secunderabad-and the equipment could be shifted to any other place by giving 7 days advance notice in writing.
(iii) The lessee has declared that it has taken prior inspection of the said equipment and has satisfied itself that each piece of equipment is suitable for its use and the purpose for which it is being taken on lease and that the lease has been taken subject to any fault or defect which any piece of equipment may suffer and that the lessee will not hold the lessor responsible for any inadequacy in any piece of equipment. Notwithstanding the grant of lease of the equipment, the lessor shall continue to be the sole owner and the lessee would not have any right, title or interest in the same.
(iv) The lessor shall have the right at all reasonable time to inspect any piece of equipment and for that purpose shall have access to any factory, building or other location at which the equipment may be installed.
(v) The lessee is liable to pay any sales tax or purchase tax that may be imposed in respect of the lease. The details of the rentals mutually agreed are specified in column Nos. 5 and 6 of the first schedule. If the lease is not renewed, the lessee shall deliver possession at or before the expiry of the lease.
24. From a reading of the clauses in the agreement, it is clear that the transaction is a bailment as defined by section 148 of the Indian Contract Act. The assessee is the bailor and M/s. Rallis India Ltd., is the bailee under the contract. The delivery of the goods is under the contract. The purpose for which the goods are delivered 'the duration and the obligation to return after the purpose is accomplished and other details are incorporated in the agreement. Section 149 of the Contract Act says that a delivery to the bailee may be made by doing anything effect of putting the goods in the possession of the intended bailee or of any person authorised to hold them on his behalf. Sub-section (2) of section 23 of the Sale of Goods Act lays down, inter alia, that if in pursuance of a contract, the seller delivers the goods to a common carrier for the purpose of transmission to the buyer, he is deemed to have unconditionally appropriated the goods to the contract. A Division Bench of this Court in Rashtriya ispat Nigam Ltd. v. Commercial Tax Officer [1990] 77 STC 182 interpreting section 5-E of the Act held that it incorporates one category of bailments as defined in Halsbury's Laws of England (Fourth Edition) at paragraph 1551 :
"It is a contract by which the hirer obtains a right to use the chattel hired in return for the payment to the owner of the price of the hiring".
and it is this category of bailments that is the tax base under section 5-E. "The taxable event under section 5-E is the transfer of the right to use any goods. What does this phrase connote ? This means that unless there is a transfer of the right to use the goods, no occasion for levying tax arises; providing a facility which involves the use of the goods nor even a right to use the goods is not enough, there must be a transfer of that right".
25. Another Division Bench in State Bank of India v. State of Andhra Pradesh [1988] 70 STC 215 expressed the view that delivery is essential in a case of bailment which is sought to be brought under section 5-E of the Act. In paragraph 60 of the revisional order, the Commissioner has observed :
"........ it is admitted and confirmed that the assessee purchased the goods, that they were the owner of the goods and gave instructions for delivering the goods to a particular address which was the address of the lessee."
26. After stating the aforesaid admitted fact, the Commissioner proceeded to discuss the question whether the movement of the goods originated with the contract of lease. While admitting that "the movement of the goods originated from the manufacturer of the goods and that movement started because of the purchase order placed by the assessee with the manufacturer outside the State of Andhra Pradesh", the Commissioner has concluded that "the cause of action for the inter-State movement of the goods was the purchase order placed by the assessee with the manufacturer, which incidentally might have been motivated by the lease agreement ..... it is only the purchase order which occasioned the movement of the goods for, in the absence of the purchase order, with the lease agreement only, the movement of the goods could not have begun" and, therefore, to say that the contract of lease is an inter-State sale is not correct. The lease agreement and the purchase order according to the Commissioner are two different and independent transactions. We are not inclined to agree. The planning of the purchase order by the assessee with the manufacturer was because of the lease agreement with the customer. Both are integrally connected; one cannot be split up from the other. The customer (M/s. Rallis India Ltd.) has already inspected the equipment, placed an order with the manufacturer on behalf of the assessee and thereafter corresponded with the assessee for confirmation and this is clear from the letter dated February 21, 1988, addressed by the customer to the assessee, which is extracted supra. Independent of the lease agreement, such a transaction could not have been possible. In the absence of the lease transaction, it is plain, there was no possibility for the assessee to Place the Purchase order, with the manufacturer.
27. It is not the case of the department, in so far as Spl. Appeal No. 1 of 1995 is concerned, that there was any single transaction in which, independently, without the request of a customer, a purchase order was placed by the assessee with any manufacturer. As it is the admitted cage of the department that the consignee is the customer (the lessee) and the invoice was raised against the assessee, the delivery was effected by way of entrustment to a common carrier outside the State of Andhra Pradesh, the consignee being the customer (lessee) within the State of Andhra Pradesh. The Commissioner's reasoning is that there are two appropriations : the first appropriation is complete when the manufacturer of the goods consigned them to the inter-State sale to the assessee but the second appropriation took place only when the goods are physically delivered to the lessee for a deemed sale under section 5-E of the Act for, for a deemed sale under section 5-E, physical possession is a must. The reasoning is clearly unsustainable in law. Once the goods are entrusted to a common carrier, the carrier becomes an agent and such a delivery amounts to delivery to the consignee (the lessee in this case). The taxable event under section 5-E of the Act is the transfer of the right to use any goods [Rashtriya Ispat Nigam Ltd. v. Commercial Tax Officer and State Bank of India v. State of Andhra Pradesh and that right will be vested in the customer (the lessee) the moment the goods are delivered to a common carrier. That right does not depend upon the "actual physical possession" of the goods by the customer. There are no two appropriations as erroneously held by the Commissioner-one at the stage when the goods are consigned to the inter-State sale and the other when the customer comes into physical possession of the goods.
28. The distinction sought to be made by the Commissioner in paragraphs 63 and 64 of the order under appeal between a lease transaction and an outright sale for the purpose of reaching the conclusion that "wherever the lease transaction might have originated, when the goods are within the State of Andhra Pradesh, the lease rentals arising for that period when the lease rights are enjoyed within the State of Andhra Pradesh, that part of the lease agreement has to be treated as a deemed, sale within the State of Andhra Pradesh,, and are liable to tax under section 5-E of the Act", has no foundation in law. The Commissioner has not adverted to the crucial question whether the transactions are already covered by the Central Sales Tax Act And the constitutional limitations engrafted in article 286 and the legislative injunction incorporated in section 38 of the APGST Act.
29. In Builders Association of India [1989] 73 STC 370, one of the questions considered by the Supreme Court was whether the power of the State Legislature to levy tax on the transfer of property in goods involved in the execution of works contracts referred to in sub-clause (b) of clause (29A) of article 366 of the Constitution is subject to the restrictions contained in article 286 of the Constitution. Answering the question in the affirmative, it was held by the Constitution Bench of the Supreme Court :
"..... The object of the new definition introduced in clause (29A) of article 366 of the Constitution is, therefore, to enlarge the scope of 'tax on sale or purchase of goods' wherever it occurs in the Constitution so that it may include within its scope the transfer, delivery or supply of goods that may take place under any of the transactions referred to in sub-clauses (a) to (f) thereof wherever such transfer, delivery or supply becomes subject to levy of sales tax. So construed the expression 'tax on the sale or purchase of goods' in entry 54 of the State List, therefore, includes a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract also."
30. The Supreme Court rejected in clear terms the contention of the State that clause (29A) of article 366 has conferred on the Legislatures of States, the power to levy tax independently of the power conferred under entry 54 of the State List. Any tax leviable on deemed sales covered by sub-clauses (a) to (f) of clause (29A) of article 366 would be subject to the prohibition under article 286(1). The statement of law laid down by the Supreme Court in this regard does not admit of any ambiguity :
"...... We are of the view that all transfers, deliveries and supplies of goods referred to in sub-clauses (a) to (f) of clause (29A) of article 366 of the Constitution are subject to the restrictions and conditions mentioned in clause (1), clause (2) and sub-clause (a) of clause (3) of article 286 of the Constitution and the transfers and deliveries that take place under sub-clauses (b), (c) and (d) of clause (29A) of article 366, of the Constitution are subject.. to an additional restriction mentioned in sub-clause (b) of article 286(3) of the Constitution."
31. There can be no doubt after the authoritative pronouncement of the Supreme Court in Builders Association of India [1989] 73 STC 370 that any State law with respect to deemed sales covered by sub-clauses (a) to (f) of clause (29A) of article 366 must conform to the requirements of article 286 and the provisions of the Central Sales Tax Act. For purposes of taxation, a deemed sale cannot be distinguished from an ordinary sale.
32. Another Constitution Bench in Gannon Dunkerley & Co. [1993] 88 STC 204 restated the legal position. It was held :
"...... it is not permissible for the State Legislature to make a law imposing tax on such a deemed sale which constitutes a sale in the course of inter-State trade or commerce under section 3 of the Central Sales Tax Act or an outside sale under section 4 of the Central Sales Tax Act or sale in the course of import or export under section 5 of the Central Sales Tax Act."
33. The well-accepted legal position that in order to decide whether a particular sale had taken place in the course of an inter-State trade or commerce, the situs of the sale or purchase is wholly irrelevant was also reiterated by the Supreme Court :
"The location of the situs of the sale in sales tax legislation of the State would, therefore, have no bearing-on the chargeability of tax on sales in the course of inter-State trade or commerce since they fall outside the field of legislative competence of the State Legislatures and will have to be excluded while assessing the tax liability under the State legislation. The same is true of sales which are outside the State and sales in the course of import and export. The State Legislature cannot so frame its law as to convert an outside sale or a sale in the course of import and export into a sale inside the State."
34. The transactions covered by Special Appeal No. 1 of 1995 are clearly inter-State transactions falling within the ambit of section 3(a) of the Central Sales Tax Act, 1956. The movement of the goods from the State of Madras to Hyderabad is the result of the contract. It is immaterial in which State the property in the goods passed. What is material is that the inter-State movement must be the result of a covenant, express or implied, in the contract of sale or an incident of the contract. It is not necessary that the inter-State movement injust be pleaded by a sale. [English Electric Company of India Ltd. v. Deputy Commercial Tax Officer , Balabhagas Hulaschand v. State of Orissa and Union of India v. K. G. Khosla and Co. Ltd. ]. If the movement of the goods is because of a clause in the contract or as an incident of contract, the same shall he deemed to have taken place in the course of inter-State trade or commerce. In the transaction illustratively discussed by the Commissioner, the transport of goods from one State to another was an incident of the contract between the assessee see. The very hiring itself is the incident of the contract of sale, which occasioned the inter-State enjoyment of the Lyoods from Madras Andhra Pradesh. Without this contract, the goods would not have moved out of Madras. This aspect we have already discussed while the question whether the purchase order and the lease agreement are separate or constitute one integral transaction.
35. It is true that Explanation II(a) to section 2(n) of the Act lays down that notwithstanding anything contained in the Indian Sale of Goods Act, 1930, a sale or purchase of goods shall be deemed for the purpose of the Act to have taken place in the State, wherever the contract of sale or purchase might have been made, if the goods are within the State. If construed literally, this implies that goods which are the subject-matter of Inter-State transactions also can be brought to tax if they are within the State. Such an interpretation is not permissible in view of the rulings of the Supreme Court in Builders Association of India [1989] 73 STC 370 and Gannon Dunkerley & Co. [1993] 88 STC 204. The Commissioner of Commercial Taxes erroneously relied upon the test of "situs" - the transfer of the right to use the goods had taken place in Andhra Pradesh because the goods are found in Andhra Pradesh.
36. The decision of the Bombay High Court in 20th Centun, Finance Corporation Limited [1989] 75 STC 217 was strongly relied upon by the Commissioner for subjecting the transactions in question to tax under section 5-E. The constitutionality of section 2(10) of the Maharashtra Sales Tax on the Transfer of Right to use any Goods for any purpose Act was challenged in that case before the Bombay High Court. The impugned provision, which contained the definition of "sale" is in the following terms :
"'Sale' means the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or any other valuable consideration, and the word 'sell' with all its grammatical variations and cognate expressions, shall be construed accordingly.
Explanation. - For the purposes of this clause, the transfer of the right to use any such goods shall be deemed to have taken place in the State of Maharashtra, if the goods are in the State of Maharashtra at the time of their use irrespective of the place where the agreement for such transfer of the right to use such goods is made, and whether the assent of the party is prior or subsequent to such transfer of the right to use any such goods."
37. The first petitioner in the Bombay case (20th Century Finance Corporation Limited v. State of Maharashtra [1989] 75 STC 217), as lessor entered into a Master Lease Agreement with the lessee agreeing to give on lease certain machinery/equipment listed in the schedule subject to the terms and conditions stipulated in the Master Lease Agreement. The agreement provided that orders for individual equipment would be placed by the first petitioner at the instance of the lessee and the equipment would be despatched by the manufacturer to the location specified by the lessee. Orders were placed by the first petitioner with the manufacturer chosen by the lessee for supply of individual equipment which was delivered to the lessee by the supplier. After the goods were delivered, the lessee would execute a supplementary lease schedule acknowledging due receipt of the leased equipment. The Bombay High Court held that the right of the lessee would begin only after acquiring physical possession of, the goods and the test of physical location of the goods at the time of their use is relevant. Although holding that the transactions are in the nature of bailments, the Division Bench of the Bombay High Court held that "the right to use must be deemed to arise at the place where the goods are located at the time of their use". The Bench also expressed the view that in case of a transfer of the right to use goods, when an agreement is made in one State for giving delivery of goods for use by the transferee in another State, the movement precedes the transfer of the right to use. With great respect, we are unable to agree with the reasoning of the Bombay High Court. The propositions stated by it, in our considered view, are at variance with the two rulings of the Supreme Court in Builders Association of India [1989] 73 STC 370 and Gannon Dunkerley & Co. [1993] 88 STC 204. In the determination of the inter-State character of a sale, the situs is immaterial. When goods are entrusted to a common arrier for delivery, it amounts to delivery to the consignee and when it takes place outside the State, the fact that subsequently the goods have reached the State where the tax is sought to be imposed, cannot be a ground for determining the tax liability. The decision of the Bombay High Court in 20th Century Finance Corporation Limited [1989] 75 STC 217 proceeds on the footing that a transfer of the right to use is different from sale without considering, the fiction introduced by clause (29A) of article 566 of the Constitution.
38. The principle that where a State law while defining the expression "sale" makes the situs a relevant consideration for the purpose of determining a deemed sale, the same cannot bring within its ambit inter-State sales or in the course of import and export was again emphasised by. The Supreme Court in Builders' Association of India v. State of Karnataka [1993] 88 STC 248; AIR 1993 SC 991. Interpreting Explanation (3)(a) to clause (t) of section 2 of the Karnataka Sales Tax Act, under which, for considering the character of a deemed sale, situs is the sole determinant, the Supreme, Court expressed the view :
"....... we are unable to hold that in fixing the situs in respect of deemed sales resulting from transfer of property in goods involved in execution of a works contract, the Legislature has included a sale in the course of inter-State trade or commerce or a sale outside the State or a sale in the course of import or export."
39. For the foregoing reasons, we are of the view that the revisional order of the Commissioner of Commercial Taxes is liable to be set aside. The learned counsel for the assessee has pressed before us that in the event of our setting aside the order of the Commissioner, the matter must be remitted to the original assessing authority to examine the various transactions for the purpose of determining the liability of the assessee under section 5-E of the Act. We are not inclined to accede to the request of the learned counsel. The order of the Appellate Deputy Commissioner was not challenged by the assessee and it would have attained finality had it not been revised by the Commissioner of the Commercial Taxes. It would not, therefore, be permissible for us to reopen the entire assessment by remanding the case to the original assessing authority. The order of the Appellate Deputy Commissioner shows that the assessee had produced evidence with regard to the inter-State character of several transactions and accepting most of them, he had granted relief to a considerable extent. That cannot be set at naught in this special appeal.
40. As regards the five writ petitions, our attention has not been drawn by the learned counsel for the assessee to any particular transaction. Arguments of a general nature have been advanced for quashing the assessments. The question decided by us in the special appeal (supra) is common to all these five writ petitions since most of the transactions brought to tax in the writ petitions are similar to the transactions between the assessee and M/s. Rallis India Ltd., discussed by us in the aforesaid special appeal.
41. It is urged for the assessee that notwithstanding G.O. Ms. No. 606, Revenue (CT-II) dated July 3, 1993, rescinding G.O. Ms. No. 1388, Revenue (S) Department dated December 23, 1985, by which exemption was granted to dealers from tax payable under section 5-E of the Act on the turnovers in respect of any right to use goods, provided that such goods have suffered tax under the APGST Act in the State, the assessee is not liable to pay tax under section 5-E since the earlier notification in G.O. Ms. No. 1388 dated December 23, 1985, had extinguished tax liability which could not later be revived unless there were fresh transactions. In other words, during the period of the currency of the leases already entered into by the assessee, the exemption was complete. Basing upon the representation contained in G.O. Ms. No. 1388, dated December 23, 1985, the assessee purchased goods and hired them out which they would not have done otherwise. One other contention advanced by Sri Anantha Babu, learned counsel, is that the intention of the Legislature in enacting the APGST Act, as it stands now, is to subject all goods to single point tax. In respect of the goods leased out by the assessee, no tax could be levied under section 5-E if the sales or purchases have already suffered tax in the State.
42. Section 9 of the Act confers power on the State Government to notify exemptions and reductions of tax or interest. It reads :
"9. Power of State Government to notify exemptions and reductions of tax (or interest). - (1) The State Government may, by notification in the Andhra Pradesh Gazette, make an exemption, or reduction in rate, in respect of any tax or interest payable under this Act -
(i) on the sale or purchase of any specified class of goods, at all points or at any specified point or points in series of sales or purchases by successive dealers; or
(ii) by any specified class of persons, in regard to the whole or any part of their turnover.
(2) Any exemption from tax or interest or reduction in the rate of tax notified under sub-section (1) -
(a) may extend to the whole of the State or to any specified area or areas therein;
(b) may be subject to such restrictions and conditions as may be specified in the notification, including conditions as to licences and licence fees."
43. G.O. Ms. No. 1388 dated December 23, 1985, reads :
"In exercise of the powers conferred by sub-section (1) of section 9 of the Andhra Pradesh General Sales Tax Act, 1957 (Andhra Pradesh Act VI of 1957), the Governor of Andhra Pradesh hereby exempts the dealers who transfer the right to use any goods from the tax payable under section 5-E of the Act with effect from 1st July, 1985, on such part of the turnover in respect of any right to use goods provided that such goods have suffered tax under the said Act in the State."
44. The exemption granted by the aforesaid notification was withdrawn by G.O. Ms. No. 606 dated July 3, 1993, which is in the following terms :
"In exercise of the powers conferred by sub-section (1) of section 9 of the Andhra Pradesh General Sales Tax Act, 1957 (Act VI of 1957) read with section 15 of the Andhra Pradesh General Clauses Act, 1891 (Act 1 of 1891), the Governor of Andhra Pradesh hereby rescinds the notification issued in G.O. Ms. No. 1388, Revenue dated 23rd December, 1985 and published in Part I, Extraordinary of the Andhra Pradesh Gazette dated the 24th December, 1985 and the notification issued in G.O. Ms. No. 1394, Revenue dated the 24th December, 1985 and published in Part I, extraordinary of the Andhra Pradesh Gazette, dated the 25th December, 1985."
45. Assessment under the Act is made annually. Section 5, the charging section, enjoins every dealer to pay a tax for each year on every rupee of his turnover of sales or purchases of goods in each year irrespective of the quantum of his turnover at the rates of tax and at the points of levy specified in the Schedules. Prior to the APGST (Amendment) Act, 1989 (Act 4 of 1989), multi-point tax was levied in respect of certain goods.
46. The exemption notification in G.O. Ms. No. 1388 dated December 23, 1985, was in favour of a specified class of persons - dealers who transfer the right to use in goods - exempting from tax payable iffider section 5-E of the Act with effect from July 1, 1985 on such part of the turnover in respect of any right to use goods provided that such goods have suffered tax under the said Act in the State. The aforesaid G.O. was rescinded by the later G.O. - G.O.Ms. No. 606 dated July 3, 1993 - which was published in the Gazette on July 7, 1993. Therefore, with effect from the date of publication in the Gazette - July 7, 1993 - the class of persons covered by G.O.Ms. No. 1388 dated December 23, 1985, are no longer entitled to claim exemption from tax payable under section 5-E. It is a well-settled proposition of law, which needs no emphasis, that when power is conferred by a legislative enactment to make rules or issue orders, that power shall he construed as including a power exercisable in the like manner to rescind, revoke, amend or vary the rules or orders (vide section 15 of the Andhra Pradesh General Clauses Act).
47. We do not agree with the contention advanced for the assessee that the exemption granted shall be in force for the currency of the leases already concluded. The principle of promissory estoppel has no application in a case of this nature. The true test for invoking the doctrine of promissory estoppel is :
"...... where the Government makes a promise knowing or intending, that it would be acted on by the promisee and, in fact, the promisee acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by article 299 of the Constitution." (Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh ).
48. There is no warrant for the inference that basing on the representation contained in the exemption G.O., the assessee has acted to its detriment by purchasing the goods and leasing out the same. No trace of evidence in this regard is placed before us.
49. The fact situation does not call for the invocation of the doctrine of legitimate expectations which was referred to by the learned counsel for the assessee incidentally in the course of his submissions. The decision taken by the Government to withdraw the exemption cannot be characterised as arbitrary or unreasonable or not in the public interest, in which event alone, a legitimate expectation of the assessee can be said to have been breached. (Union of India v. Hindustan Development Corporation [1993] 2 SCALE 506).
50. The intention of the Government in issuing the later Notification - G.O.Ms. No. 606 dated July 3, 1993 - is very clear - to withdraw the exemption granted earlier by G.O.Ms. No. 1388 dated December 23, 1985. In a case of this nature, what is relevant is the ascertainment of the intention of the authority with reference to the language employed in the notification.
51. In a case where the rate of tax was reduced by a notification and subsequently, without withdrawing that notification, the goods were brought to tax at a higher rate, it was ruled by the Supreme Court in Commissioner, Sales Tax, U.P. v. Agra Belting Works [1987] 66 STC 1 that no separate notification was necessary to rescind the earlier order. The court held "....... As the power both for the grant of exemption and the variation of the rate of tax vests in the State Government and it is not the requirement of the statute that a notification of recall of exemption is a condition precedent to imposing tax at any prescribed rate by a valid notification under section 3A, we see no force in the contention of the assessee which has been upheld by the High Court. In fact, the second notification can easily be treated as a combined notification - both for withdrawal of exemption and also for providing higher tax. When power for both the operations vests in the State and the intention to levy the tax is clear, we see no justification for not giving effect to the second notification."
52. Following this precedent, a Division Bench of this Court sustained the legality of a notification issued by the Government of Andhra Pradesh in G.O.Ms. No. 561, Revenue (CT-II) dated March 26, 1993, by which exemption granted in respect of wheat and wheat products from payment of sales tax for a period of five years by G.O.Ms. No. 377 dated May 2, 1991, was withdrawn. (Roxy Roller Flour Pvt. Ltd. v. Government of Andhra Pradesh [1994] 94 STC 464).
53. In the context of the discussion on the applicability of the principle of promissory estoppel, we deem it necessary to refer to one aspect : The Division Bench of this Court in the aforesaid Roxy Roller Flour Pvt. Ltd. [1994] 94 STC 464, while adverting to the case law on the subject, has specifically referred to Jit Ram Shiv Kumar v. State of Haryana for the proposition that the plea of estoppel is not available against levy of tax for augmenting the revenues. A two-Judge of Bench of the Supreme Court in Jit Ram Shiv Kumar took a view different from the earlier view of a two-Judge Bench of the Supreme Court in Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh that promissory estoppel is not available against exercise of executive functions of the State. To the extent Jit Ram Shiv Kumar deviated from the principle laid down in Motilal Padampat Sugar Mills Co. Ltd. , disagreement was expressed by a subsequent three-Judge Bench of the Supreme Court in Union of India v. Godfrey Philips India Ltd. :
".... we are clearly of the view that what has been laid down in Motilal Padampat Sugar Mills' case represents the correct law in regard to the doctrine of promissory estoppel and we express our disagreement with the observations in Jeet Ram's case [1980] 3 SCR 689, to the extent that they are in conflict with the statement of the law in Motilal Padampat Sugar Mills' case and introduce reservations cutting down the full width and amplitude of the propositions of law laid down in that case."
54. We, therefore, hold that G.O.Ms. No. 606 dated July 3, 1993, will have effect from the date of its publication in the Gazette - July 7, 1993.
55. The APGST Act was amended by Act 4 of 1989, which received the assent of the Governor on March 30, 1989. One of the purposes mentioned in the statement of objects and reasons in the amending Act is "to replace the present multi-point levy by a single point levy". After the amendment, there are 190 types of goods listed in Schedule I, which are taxable at the point of first sale and one commodity - cotton yarn waste - at the point of last sale in the State. In the Second Schedule, which covers 21 commodities, tax is leviable in respect of the same at the point of first purchase and in respect of others, at the point of last purchase in the State. The Third Schedule relates to declared goods taxable at single point sale or purchase. Schedule IV concerns with exempted goods. Schedule V covers jaggery which is made liable to tax under section 5 at every point of sale subject to the terms of the proviso in the Schedule. The effect of the proviso is to limit the taxation to a single point purchase or sale. The Sixth Schedule relates to all liquors other than toddy and arrack which are taxable at all sale points but on the basis of diminishing turnovers as laid down in the proviso. In effect, this is also a single point levy.
56. The question is, if the goods leased out by the assessee had already suffered tax in the State, either at the time of sale or purchase, whether the same can be brought to tax under section 5-E. In view of the amendment to the expression "sale" by Act 18 of 1985 consequent upon the Constitution (Forty-sixth Amendment) Act, the words "sale" or "purchase" of goods occurring in section 5 of the Act, which speaks of levy of a tax on sale or purchase of goods, must be understood with reference to the amended definition of sale as contained in Explanation IV to section 2(n) of the Act. So construed, section S-E which speaks of levy of a tax on the amounts realised in respect of any right to use goods, becomes relevant for the purpose of ascertainment of the rate of tax and the quantum of turnover. The Constitution of India has chosen to treat sales and deemed sales as belonging to one category [vide clause (29A) of article 366] and they cannot be treated separately for the purpose of taxation after the definition of "sale" was amended by Act 18 of 1985. As the basic norm regulating the tax structure under the Act is confined to levy of tax at a single point, levy of tax on a second sale in respect of goods which have already suffered tax is impermissible and therefore, a deemed sale likewise cannot be subjected to tax if the goods relatable to such deemed sale have already suffered tax. Same goods cannot be subjected to tax twice - once as sale and secondly as deemed sale - in the face of the legislative intent of single point taxation.
57. In the result, Special Appeal No. 1 of 1995 is allowed. The order of the Commissioner of Commercial Taxes is set aside affirming the view of the Appellate Deputy Commissioner (CT), Panjagutta, in Appeal No. B/57/93-94 dated April 27, 1994.
58. W.P. Nos. 12656, 12672, 12673 of 1991 and 21481 and 22349 of 1994 are allowed. The assessment orders impugned in the writ petitions are set aside and the cases are remanded to the original assessing authority with a direction to complete the assessments as expeditiously as possible after issuing due notice and affording sufficient opportunity to the assessee in strict compliance with the statutory rules and in the light of the law declared, observations made and conclusions reached by us in this judgment. No costs.
59. Appeals and writ petitions allowed.