LexALLADI VENKATESWARLU & ORS. versus GOVT. OF ANDHRA PRADESH & ANR.
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190 SUPREME COURT REPORTS (1978] 3 s.c.R. A ALLADI VENKATESWARLU & ORS. v. GOVT. OF ANDHRA PRADESH & ANR. February 21, 1978 B (M. H. BEG, C.J. AND N. L. UNTWALIA, J.] _, lnll'rpretation of taxing statute-If the language is clear, it will be unfair to ~ c D E interpret against the assessee. A.ndhra Pradesh General Sales Tax Act, 1957 S. 5 r/w Entry 66 of Sche- dule 1 to the Act-When "Paddy" was already taxed under iten1 8 Schedule II, Whether "Atukulu" (Pare/Jed Rice) and "n1uran1ura/11" (Puffed rice) are exigible to tax for the second tilne as rice falling under Item 66(a) of Sche- dule I-Whether "Atukulu" (Parched rice) and "111ura1nuralu" (Puffed nee) are "rice'' within the meaning of entry 66(b) of Schedule l. Andhra Pradesh General Sales Tax Act, 1957, Section 5(2)-Difjerence between taxation uls 5(2)(a) and 5(2)(b). Section S of the Andhra Pradesh General Sales Tax Act, 1957 regulates the levy of tax on sales or purchase of goods. S. 5(1) enjoins that every dealer (other than a casual trader and an agent of a non-resident dealer) whose total turnover is Rs. 25,000 and upwards and every agent of a non-re&ident dealer irrespective of his turnover shall pay a tax for each year at the rate of four paise on every rupee of his turnover. "Paddy" is subjected to sales tax under item 8 of the 2nd schedule @ the rate of five paise in the rupee at the point of first purchase in the State. A rebate of 2 paise in the rupee shall be allO\\'ed on the paddy purchased and consumed in the State. Under s. 5(2)(a) r/wentry 66 of Schedule I to the Act, rice is subject to sales tax at the rates specified at the point of the sale effected by the dealer selling them. "Paddy" is either parched or heated and sold a..;: Atukulu (parched rice) and "muramuralu" (puffed rice). When the sales tax authorities sought to levy once over again on the sale of paddy which has already been taxed at the purchase point, after making it edible in th form of "atukulu" and "Muramuralu" the appellants challenged the said action. The Andhra Pradesh High Court held that parched rice and puffed rice, not being rice at all, falling within either of the two parts of entry 66 were taxable as separate kinds of goods altogether u/s 5, sub- section 1 of the Act. F Allowing the appeals by special leave the Court, J-IELD : 1. Where two interpretations of a provision are possible, courts should apply the principle that the interpretations which favours the assessee should be preferred. Unless the language of the taxing statute was absolutely clear, it should not be given an obviously unfair interpretation against the assessee. [195-G-Hl 2. Commonly accepted sense of a term should prevail in construing the G description cf an article of food. [195D] H Kalyani & Co. v. Commissioner of Sales Tax, (1953] (4) S.T.C. 387 @ 39() (Hyd.) referred to. 3. Court must give a broad enough interpretation to the term "rice" in accordance ·with the common sense rule of interpretation laid down by this Court in Mis Tungnbhadra Industries Ltd. v. Commercial Tax Officer, Kurnoot, (1961] 2 S.C.R. 14 @ 23. [196 C-Dl 4. ·The term rice is wide enough to include rice in its various forms whether edible or unedible. Rice in the form of grain is not edible. Parched rice and puffed rice are edible. But the entry rice covers both forms of rice. At any rate it is wide enough to cover them. [194H, 195A] --"""---- 1 i _( .. ! I A. VENKATESWARLU V. A. P. GOVT. (Beg, C. ].) 191 S. There is a distinction between "paddy" as found in item 8 of the 2nd schedule and "rice'' as mentioned under item 66 of the first schedule. The view that, if paddy has been taxed in the hands of the purchaser, who is a dealer the same individual was made to pay tax on it again as rice falling within item 66(a) and not as "rice" falling under item 66(b) cannot be accepted because such a view would run counter to the express provisions of item 66 (b). If what is taxed is "rice'', it would obviously .fall under item 66(b) because it has already been taxed in the form of paddy. It could certainly not fall under item 66(a) which is for "rice" not so taxed. To urge that it falls under item 66(a) is to· concede that it is "rice''. f194A1 6. On a parity of reasoning the term 'rice' as ordinarily understood in English language would include both parched and puffed rice. Atukulu (parched rice) and "muramuralu'' (puffed rice) are "rice"
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