JUDGMENT
S. Dasaratharama Reddy, J.
1. The petitions who are dealers in Indian Made Foreign Liquor at various places in the State seek a writ prohibiting the respective Commercial Tax Officers from levying and collecting turnover tax under section 5-A of the Andhra Pradesh General Sales Tax Act, 1957 (APGST Act), for short “the Act” as introduced by APGST (Amendment) Act 13 of 1993 on the turnover of liquor on which, tax has been levied at the preceding point of sale, by declaring such levy as illegal, arbitrary and violative of article 14 of the Constitution of India.
2. Under the Sixth Schedule read with section 5 of the Act, all liquors other than toddy and arrack are taxable at every point of sale other than at the point of last sale in the State at 25 per cent and at the point of last sale at the rate of 5 per cent. But under the proviso, in the case of any point of sale other than the first sale or last sale, the turnover will be arrived at by deducting the turnover of such goods on which tax has been levied immediately at the preceding point of sale. Thus, the tax on Indian Made Foreign Liquor is in the nature of a value added tax.
3. “Turnover” is defined is section 2(s) of the Act as the total amount set out in the bill of sale ….. (omitted as not relevant).
4. Section 2(r) defines “total turnover” as follows :
“‘Total turnover’ means the aggregate turnover in all goods of a dealer at all places of business in the State, whether or not the whole or any portion of such turnover is liable to tax, including the turnover of purchases or sales in the course of inter-State trade or commerce or in the course of export of the goods out of the territory of India or in the course of import of the goods into the territory of India.”
5. As per section 5-A of the Act as substituted by Act 13 of 1993, every dealer whose total turnover in a year is not less than ten lakh rupees whether or not the whole or any portion of such turnover is liable to tax under any other provisions of this Act shall be liable to pay tax at the rate of 1/2 per cent, 1 per cent and 2 per cent depending on the local turnover. Under proviso to that section, no tax is payable on that part of such turnover relating to sale or purchase of goods specified in the Third and Fourth Schedules, among other things. The Third Schedule deals with declared goods which are governed by sections 14 and 15 of the Central Sales Tax Act while the Fourth Schedule read with section 8 of the Act deals with goods exempt from tax. Section 9 of the Act empowers the Government to exempt any turnover or any dealer from tax or reduce the tax. Apart from section 5 of the Act, the other charging sections are section 5-A (turnover tax), section 5-C (tax on hotels and eating houses), 5-E (tax on right to use goods), section 6 (tax on declared goods), section 6-A (tax on purchase of any goods in certain circumstances), section 6-B (surcharges on sale of any goods 6-C (rate of tax on packing material). In the matter of levy of tax there are four components, i.e., taxable person, taxable event, taxable measure and rate of tax. [See (Govind Saran Ganga Saran v. Commissioner of Sales Tax)]. For levy of various charges as mentioned above, it is open to the Legislature to prescribe various ingredients. For example, in the case of liquor for the purpose of tax under section 5 read with the Sixth Schedule, the taxable measure is the total turnover less the turnover that has suffered tax at the preceding point of sale and the taxable rate is 25 per cent other than the last sale. Besides this levy, the dealer was liable to pay additional tax on the taxable sales of liquor under old section 5-A of the Act up to July 18, 1993, taxable measure being the net tax turnover, the rate varying from 1/2 per cent to 1 1/2 per cent depending on the total turnover. Under the amended section 5-A of the Act, which came into force on July 18, 1993, in the place of additional tax on turnover, the dealer has to pay turnover tax, for which the taxable measure is total turnover and the rate of tad ranges from 1/2 per cent to 2 per cent depending on the total turnover in a year.
6. Thus, it is open to the Legislature to levy tax on actual sale of goods and also to levy tax on total turnover which is other wise called also gross turnover.
7. The submission of Dr. M. V. K. Moorthy, the learned counsel for the petitioners is that as per the Statement of Objects and Reasons appended to the Bill, the object of levying turnover tax is to have control over the secondary transactions in respect of goods taxable at single point and hence the section has to be interpreted as to apply to goods taxable at single point of sale or purchase and not to goods like liquor which is taxable at multi-point. There is no substance in this connection. It is now settled that when the words used in the Act are unequivocal, Statement of Objects and Reasons in the Bill, cannot be taken aid of. In the instant case, section 5-A of the Act is categorical in saying that tax is leviable on the total turnover whether or not the whole or any portion of any such turnover is liable to tax. In view of this categorical expression, the Statement of Objects and Reasons cannot be relied on. Even otherwise the Statement of Objects and Reasons says :
“1. In order to mobilise additional resources, Government have decided to levy a turnover tax on the gross turnover instead of the net turnover as presently done by the existing section 5-A of the Andhra Pradesh General Sales Tax Act, 1957.
2. Under the Andhra Pradesh General Sales Tax Act all the commodities are subjected to a single point tax either at the sale or at the purchase point except on liquor which is taxed on the value added basis in a separate Schedule. By introducing the turnover tax, all the secondary sales will also be subjected to turnover tax and it will cover all the dealers whose turnover is above rupees ten lakh per annum. Introduction of turnover tax will also help in having control over the secondary transaction in respect of all this single point purchase or sale of goods. The traders will be more responsive in issuing bills and the customers also can insist on the same. By issuing bills, the assessee has to account to the entire turnover which is liable to turnover tax.”
8. The first para is clear that the levy is on gross turnover instead of on net turnover and the levy is in order to mobilise additional resources. The first para does not make any distinction between goods taxable at single point and goods taxable at multi-point. The second para says that this levy incidentally will also help in having control over secondary transaction in respect of single point goods. Thus, it cannot be said that the turnover tax is intended to tax turnover of secondary transactions of single point goods only.
9. The next submissions of the leaned counsel for the petitioners is that as the Government by G.O. Ms. No. 859 dated September 3, 1993, have exempted from the levy of turnover tax, all goods which are exempted from basic tax under section 9 of the Act, the deduction of turnover in liquor which has suffered tax at the preceding point of sale must also be construed as statutory exemption and consequently not liable to turnover tax and that if interpreted otherwise it will amount to discrimination against liquor dealers. In other words, the contention of the learned counsel for the petitioners is that by providing for deduction of turnover that has suffered tax at the preceding point of sale while arriving at the net turnover for the purpose of levying tax under the Sixth Schedule read with section 5 of the Act, the Legislature in effect exempted the turnover that has suffered tax at the preceding point of sale from the tax payable under the Act. This is far fetched. As already seen, for the purpose of computation of taxable measure in the manner of levy of tax under section 5 read with the Sixth Schedule, the Legislature directed that turnover that has suffered tax at the preceding point of sale has to be reduced. From this, it does not follow that the said turnover is exempted from any other tax under the Act in the hands of second dealer and accordingly turnover tax cannot be levied. Merely because goods exempted from tax under section 9 are exempted from levy of turnover tax, the petitioners cannot complain of discrimination and contend that similar exemption ought to have been given also in the case of liquor turnover which has suffered tax at earlier stage. The grant exemption is a matter of policy of the State and cannot be challenged unless it is hit by article 14 of the Constitution of India. The petitioners have not made out any case of discrimination.
10. The learned counsel next contended that section 2(q) read with section 5 and the Sixth Schedule indicates that turnover tax cannot be levied on gross turnover of liquor. Section 2(q) defines “tax” as tax on the sale or purchase of goods payable under this Act and includes …….. (omitted). Tax payable under the Act covers tax payable under various charging sections. Section 5 read with the Sixth Schedule is only one of the charging sections levying tax on net sales of liquor as reduced by turnover that suffered tax at the preceding point and there is no bar on the Legislature from levying turnover tax under section 5-A on the gross turnover of liquor in addition to the tax under section 5. There is no such restriction in the case of liquor as in the case of declared goods which under section 15 of the Central Sales Tax Act cannot be taxed by any State at more than one point and at more than 4 per cent. This is also the reason why under the proviso to section 5-A, turnover on declared goods has been exempted from turnover tax. The learned counsel for the petitioners relies on section 10 of the Andhra Pradesh General Clauses Act. We fail to appreciate how this is relevant. Thus, we reject this contention also.
11. Now let us examine the decisions cited by the learned counsel. The first case is Addepalli Surya Ramachandra Rao & Co. v. State of Andhra Pradesh [1969] 24 STC 133 (AP). There, the old section 5-A was upheld as falling within entry 54 of List II of the Seventh Schedule to the Constitution. We fail to see how this is relevant. The next decision is Kodar v. State of Kerala [1974] of STC 73 (SC). This is also not relevant since what was decided in that case was that additional tax levied under the Tamil Nadu Additional Sales Tax Act, analogous to section 6-B of the Act, is valid.
12. The next decision is Jain Book Manufacturers v. Commercial Tax Officer . Under notification issued under section 8A of the Karnataka Sales Tax Act, the Government of Karnataka exempted from the tax payable under that Act the sale of goods specified in the Schedule. Rejecting the contention of the department that notification exempts the goods only from the main charging section and does not over turnover tax under section 6-B of that Act, the Karnataka High Court held that the definition of tax includes not only tax under the main charging section, but also turnover tax. This decision is in fact against the petitioners.
13. The next decision is ABN Food and Beverage Pvt. Ltd. v. Assistant Commissioner of Commercial Taxes . This is similar to Karnataka case. Here also the notification gives benefit of tax holiday to certain small units from the tax payable under the West Bengal Sales Tax Act. The Calcutta High Court held that the tax payable under that Act includes turnover tax levied under section 4AAA. As already seen, while dealing with Karnataka case, this decision goes against the petitioners.
14. Thus, we reject all the three contentions raised by the learned counsel for the petitioners. No other contention is urged. Accordingly, the writ petition is dismissed at admission stage.
15. Writ petition dismissed.