JUDGMENT
G. Ramanujulu Naidu, J.
1. The above tax revision case is preferred by the petitioner questioning the order dated 19th April, 1896, passed by the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad (hereinafter referred to as “the Tribunal”), dismissing its appeal preferred against the order of the Deputy Commissioner (Commercial Taxes), Warrangal.
2. The relevant facts giving rise to the above tax revision case, which are not in dispute, lie in a narrow compass : The petitioner is a registered dealer under the Andhra Pradesh General Sales Tax and Central Sales Tax Acts, trading in paddy and rice at Warrangal. For the assessment year 1978-79, the assessing authority subjected a turnover of Rs. 30,623.97 representing the inter-State sales of rice effected by the petitioner and not covered by declarations in form C, to tax of Rs. 673.88 under section 8(2)(a) of the Central Sales Tax Act. The Deputy Commissioner (Commercial Taxes), Warrangal, however, reopened the assessment in exercise of powers conferred upon him under section 20(2) of the Act, and subjected the said turnover to tax in a sum of Rs. 2,450. The assessing authority first determined tax on the turnover of Rs. 30,623.97 at the rate of 4 per cent. From out of the said amount, he deducted the amount of tax levied on the corresponding purchase turnover of paddy, and after arriving at the difference, the same was doubled. The Deputy Commissioner (Commercial Taxes), Warrangal, who revised the order of the assessing authority, subjected the entire turnover to tax at 8 per cent. which is double the rate of 4 per cent. applicable to sale of rice under the Andhra Pradesh General Sales Tax Act and from out of the total amount so arrived at, whatever tax the corresponding value of paddy suffered was deducted. The petitioner having unsuccessfully challenged the order of the Deputy Commissioner before the Tribunal preferred the above tax revision case.
3. The question which arises for our consideration is, what is the method of computation of liability to tax under section 8(2)(a) of the Central Sales Tax Act in respect of inter-State sales of rice effected by the assessee and not covered by the declarations in form C ?
4. To answer the question, it is necessary to notice the relevant provisions of both the Acts : Under section 6 of the Central Sales Tax Act, every dealer is liable to pay tax, subject to the other provisions of the Act, on all sales of goods effected by him in the course of inter-State trade or commerce. Under section 8(1) of the Central Sales Tax Act, rate of tax in respect of inter-State sales effected in favour of a registered dealer is 4 per cent. Sub-section (4) of section 8, however, makes it clear that the concessional rate of tax at 4 per cent. can be claimed only on production of a declaration in form C covering the goods taxed. Where such a declaration is not furnished, sub-section (2) of section 8 enacts a penal rate of tax which, in respect of declared goods, shall be calculated at twice the rate applicable to the sale or purchase of goods inside the appropriate State and, in the case of goods other than declared goods, shall be calculated at the rate of 10 per cent. or at the rate applicable to sale or purchase of such goods inside the appropriate State, whichever is higher.
5. Paddy and rice are declared goods with effect from 7th September, 1976. Section 14 of the Central Sales Tax Act lists out “declared goods”. Paddy and rice are included in the list. Section 15 of the Act incorporates restrictions and conditions to which every State law pertaining to sales tax must conform. Clause (c) of section 15 enacts that, where tax has been levied under a State law in respect of the sale or purchase inside the State of any paddy, tax leviable on rice procured out of such paddy shall be reduced by the amount of tax levied on such paddy. In other words, under the State law, if the paddy from out of which rice was produced had suffered tax, the same should be deducted by quantifying liability to tax on rice.
6. Section 6 of the Andhra Pradesh General Sales Tax Act provides for levy of tax in respect of “declared goods” and it enacts that, irrespective of quantum of turnover, a dealer is liable to pay tax only at the point of sale or purchase specified against each of the items mentioned in Schedule III of the Act. The proviso to section 6 makes it clear that, where any declared goods on which tax has been levied are sold in the course of the inter-State trade or commerce and tax has been paid under the Central Sales Tax Act in respect of the sale of such goods, the tax levied under the Andhra Pradesh General Sales Tax Act shall be reimbursed to the dealer who effected sale in the course of inter-State trade or commerce. Paddy and rice are listed as items 21 and 22 of the Third Schedule to the Act. Paddy is liable to tax at the point of first purchase in the State, and rice is exigible to tax at the point of first sale in the State. Explanation III to entries 21 and 22 provides that, where tax has been levied under the Andhra Pradesh General Sales Tax Act in respect of sale or purchase inside the State of any paddy, the tax leviable on rice procured from out of that paddy shall be reduced by the amount of tax on such paddy. It is, therefore, clear that the proviso to section 6 of the Andhra Pradesh General Sales Tax Act read with Explanation III to entries 21 and 22 of the Third Schedule to the Act, conforms to the mandate contained in section 15(c) of the Central Sales Tax Act.
7. Admittedly, the turnover which is the subject-matter of this tax revision case represents sales of declared goods outside the State of Andhra Pradesh effected by the assessee and unsupported by any declarations in form C. The said goods are, therefore, liable to tax under section 8(2)(a) of the Act. Specific language employed in section 8(2)(a) of the Central Sales Tax Act is that the tax payable “shall be calculated at twice the rate applicable to the sale or purchase of goods inside the appropriate State”. The rate of tax applicable to the sale of rice inside the State of Andhra Pradesh is 4 per cent. as specified against item 22 of the Third Schedule to the Act. Liability to tax under section 8(2)(a) has to be quantified with reference to that rate and at double that rate. Emphasis is on the expression “calculated at twice the rate”. Sri Dasaratharama Reddi, learned counsel appearing’ for the assessee, would like us to interpret the expression “rate” as meaning the amount of tax ultimately levied. There is no warrant for such an interpretation. It is well-settled that the words of a statute must be given their ordinary meaning. Given the said meaning, the expression “calculated at twice the rate” applicable to the sale of goods inside the appropriate State would only mean that the goods, vix., the rice, sold by the petitioner outside the State of Andhra Pradesh and not supported by declarations in form C is liable to tax at the rate of 8 per cent., i.e., double the rate of 4 per cent. applicable to sale of rice inside the State of Andhra Pradesh. Explanation III to entries 21 and 22 of the Third Schedule to the Act does not alter or revise the rate; it only provides for a concession to the extent indicated therein. The Deputy Commissioner (Commercial Taxes), Warrangal, rightly quantified the liability to tax on the turnover representing the sale of rice effected by the petitioner outside the State of Andhra Pradesh and not supported by any declarations in form C. The Tribunal, in its well reasoned order, upheld the action of the Deputy Commissioner.
8. Sri Dasaratharama Reddi, the learned counsel appearing for the petitioner, however, relies upon the decision of a Division Bench of this Court in Aitita Narasaiah Co. v. State of Andhra Pradesh [1979] 43 STC 183, in respect of his submission that the word “rate” occurring in section 8(2)(a) of the Act, could only mean the amount of tax which becomes actually payable after giving rebate as provided under Explanation III to entries 21 and 22 of the Third Schedule to the Act. We have carefully perused the said decision. There is nothing in the decision which supports the submission of the learned counsel for the petitioner.
9. In the result, the T.R.C. is dismissed. No costs.
Advocate’s fee Rs. 200.
10. Petition dismissed.