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High Court set aside the purchase tax levied u/s 4(4)
High Court set aside the purchase tax levied u/s 4(4)
Assessees comprised of rice, dhal, soybean oil, and cotton millers. Assessing authorities levied 5% purchase tax on purchase price of input goods. Assessees challenged the validity of purchase tax. High Court set aside the levy, and held that tax levied u/s 4(4) is not on sale of goods by a farmer/agriculturist, but on VAT dealer who purchases goods (agricultural produce) from the farmer.-900225
1 .Assessees comprised of rice millers, dhal millers, soybean oil millers, and cotton millers.
2 .Assessing authorities have levied 5% purchase tax on the purchase price of paddy, dhal, soyabeen seed, and kapas which was used as input for husk, or soyabean or cotton deoiled cake, which is exempt from tax
3 .Assessees challenged the validity of purchase tax as contrary to S 4(4) of the A.P. VAT Act, 2005 and Sections 14 and 15 of the Central Sales Tax Act, 1956
On writ petition, the High Court held as under:
4 .The policy underlying Section 4(4) is to tax every transaction either at the point of sale or purchase.
5 .The tax levied under Section 4(4) is not on the sale of goods by a farmer/agriculturist, but on the VAT dealer who purchases goods agricultural produce) from the farmer.
6 .The whole idea, underlying Section 15(a) of the CST Act, is that declared goods should not, in the aggregate, suffer tax at more than four/five per cent both in intra-state and inter-state trade.
7 .The impugned orders are set aside. The concerned authorities shall, in the light of this judgment, pass orders afresh.
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