JUDGMENT
S.V. Maruthi, J.
1. The assessee filed the T.R.C. against the orders of the Tribunal in T.A. No. 411/1993. He raised two questions :
1. Whether the Appellate Tribunal justified in holding that the petitioner is not entitled to grant of tax set-off in terms of explanation to items 21 of the Third Schedule to the Act to the extent of rice sold from out of the tax suffered paddy ?
2. Whether the Appellate Tribunal is justified in holding that there is no implied or express contract of sale in respect of gunny bags though attendant circumstances like invoicing for the contents and containers separately coupled with significant cost of gunny being charged to the buyer clearly establish express or implied contract of sale in respect of the gunny bags ?
2. The relevant assessment year is 1980-1981. The assessee is Food Corporation of India. The assessing officer included the cost of the gunny bags in the turnover and levied tax. Aggrieved by that the assessee filed an appeal before the Deputy Commissioner and the Deputy Commissioner confirmed the order of the assessing officer against which the assessee filed an appeal before the Appellate Tribunal. The Tribunal also agreed with the order of the lower authority.
3. The main argument of the learned counsel for the petitioner is that the cost of gunny bags under which rice is sold was indicated separately in the invoice. Therefore, the cost of gunny bags cannot be included in the turnover of rice. The three authorities have held that there is no evidence before them to indicate that the cost of gunny bags was separately mentioned in the invoice. In the absence of evidence the cost of gunny bags is includible in the turnover of rice. A perusal of the orders of the Tribunal and assessing officer makes it clear that they did not agree that the cost of the gunny bags was separately mentioned in the invoice. Therefore, we do not see any reason to disagree with the view of the Tribunal.
4. The assessee also contended before the authorities below that they have purchased paddy prior to September 7, 1976 and converted it into rice. During the relevant assessment year 1980-81 the authorities below have collected tax on rice as well as paddy. The assessee claimed set-off of all the taxes paid on paddy from the tax payable on rice. The assessing officer as well as the appellate authority and the Tribunal rejected the contention of the assessee. Hence, the assessee filed the present TRC.
5. The assessing officer held that the paddy did not suffer tax as declared goods, therefore, the question of allowing deduction does not arise. The appellate authority also agreed with the same and observed as follows :
“This amount related to sale of rice out of paddy purchased by the appellant and milled. The appellant has not given any ground on which it was entitled to exemption. It appears that the amount was shown in the appeal petition only to show that this rice was procured out of paddy which was subject-matter of the appeal in the earlier paragraph. The appellant was not entitled on this item as it was entitled only to reduction of tax on paddy out of the tax levied on rice. The appeal on this item is dismissed.”
Prom a reading of the order of the Tribunal we do not find what is the view of the Tribunal as it does not convey any meaning. Further, the main argument of the learned counsel for the petitioner is that irrespective of the fact whether paddy was procured prior to September 7, 1976 or after September 7, 1976, it is entitled for a set-off of the tax paid on paddy from out of the tax payable on the rice. The counsel submits that prior to September 7, 1976 the date on which paddy was declared as declared goods under Section 15(c) of the Central Sales Tax Act, 1956 the tax leviable is 4 per cent on paddy. Therefore, the tax paid on the paddy is deductible from the tax payable on the rice. The learned counsel also relied on a judgment of this Court in State of Andhra Pradesh v. Sri Venkateswara Rice Mill, Contractors Co. (1991) 12 APSTJ 124 wherein it was held that the assessee was entitled for reduction under explanation III to the Third Schedule in respect of rice sold after September 7, 1976 which was procured out of paddy prior to September 7, 1976.
6. The question, therefore, is whether the assessee is entitled for set-off of the tax paid on paddy from out of the tax payable on the rice. It is not disputed that paddy was procured on September 7, 1976. On September 7, 1976 paddy was declared as declared goods under Section 14 and the tax leviable is 4 per cent. Prior to September 7, 1976 tax payable is 3 per cent under Andhra Pradesh General Sales Tax Act under item (viii) of the Second Schedule. If tax is paid on the paddy procured prior to September 7, 1976, in view of the Explanation III under Third Schedule of the Andhra Pradesh General Sales Tax Act, the tax paid on the paddy is entitled to be set-off as against the tax payable on the rice. But the question is whether this Explanation can be extended to the paddy procured prior to September 7, 1976. In view of the judgment of this Court referred to above, viz., State of A.P. v. Sri Venkateswara Rice Mill Contractors Co. (1991) 12 APSTJ 124 wherein it was held that irrespective of the fact whether paddy is procured prior to September 7, 1976 or after September 7, 1976 it is entitled to the benefit of Explanation III to Third Schedule the assessee is eligible for this benefit of the Explanation. Further on a perusal of the order of the assessing officer, we find that there is no evidence that in fact tax was paid on the paddy procured prior to September 7, 1976. Therefore, we remand the matter to the assessing officer to ascertain whether in fact the assessee has paid tax on the paddy procured prior to September 7, 1976 under item (viii) Second Schedule of the Andhra Pradesh General Sales Tax Act. If so at what rate. If on evidence it is found that the assessee has paid tax, it may be taken as tax on paddy procured prior to September 7, 1976 and it may be set-off as against the tax payable on rice.
7. In the result, the T.R.C. is partly allowed and the matter is remanded to the assessing officer to ascertain whether the assessee has paid tax on the paddy procured prior to September 7, 1976 under item (viii), Second Schedule of the Andhra Pradesh General Sales Tax Act, if so at what rate. The assessing officer is directed to dispose of the matter within six months from the date of receipt of a copy of this order.