ASSISTANT COMMISSIONER (INTELLIGENCE) versus M/S. NANDANAM CONSTRUCTION COMPANY

Citation: [1999] SUPP. 3 S.C.R. 13 · Decided: 21-09-1999 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Appeal(s) allowed
cites 1 · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

.. 1> 
• 
ASSISTANT COMMISSIONER (INTELLIGENCE) 
A 
v. 
M/S. NANDANAM CONSTRUCTION COMPANY 
SEPTEMBER 21, 1999 
[S.P. BHARUCHA, B.N. KIRPAL, S. RAJENDRA BABU, SYED 
B 
SHAH MOHAMMED QUADRI AND M.B. SHAH, JJ.) 
Sales Tax: 
Andhra Pradesh General Sales Tax Act, 1957-Section 6-
C 
A(ii)(a)-Purchase Tax-Levy of---Purchase of raw materials from un-
registered dealers for constrnction of buildings-imposition of purchase 
ta:c-Validity of-Held, Section 6-A(ii)(a) of the Act is applicable to goods 
consumed for manufacture of goods for sale or otherwise-Raw materials 
consumed for constrnction of buildings covered-Thus, liable to tax. 
Words and Phrases : 
"Otherwise''-Meaning and Interpretation of in context of Section 6-
A(ii)(a) of Andhra Pradesh General Sales Tax Act, 1957. 
Respondents, engaged in building of flats and houses, purchased 
raw materials from unregistered dealers. Assistant Commissioner of 
Commercial Taxes issued notices upon respondents to file details of the 
said purchase of raw materials. Aggrieved, respondents filed a writ peti-
D 
E 
tion before High Court which was allowed holding that the provisions of 
Section 6-A(ii) (a) of the Andhra Pradesh General Sales Tax Act, 1957 was 
F 
not attracted as there was no consumption of goods for the manufacture 
of other goods for sale or otherwise. Hence the present appeal by Revenue. 
The contentions of appellant revenue were that Section 6- A(ii)(a) 
of the Act was attracted to consumption of original goods in the manufac- G 
ture of other goods for sale or consumption of original goods otherwise; 
the object of the provision under Section 6-A of the Act was to levy 
purchase tax on the purchase of raw material used by a consumer be that 
a manufacturer or otherwise. 
Allowing the appeals, this Court 
13 
H 
14 
SUPREME COURT REPORTS [1999] SUPP. 3 S.C.R. 
A 
HELD : 1.1. The raw materials purchased by respondents were 
covered by the provisions of Section 6-A(ii)(a) of the Andhra Pradesh 
General Sales Tax Act, 1957 and thus liable to tax. [18-F] 
1.2. The object of Section 6-A(ii)(a) of the Act is to levy purchase 
tax on goods consumed either for the purpose of manufacture of other 
B goods for sale or consumed otherwise. It postulates levy of tax on pur-
chase of goods from a person other than a registered dealer for consump-
tion or disposal or despatch of goods outside the State. So the scheme of 
clause (ii) of Section 6-A of the Act is that when the goods cease to exist 
in the original form or cease to be available in the State for sale or 
C purchase, the purchasing dealer of such goods is liable to tax if the seller 
is not or cannot be taxed. In the instant case, once the goods are utilised 
in the construction of buildings the goods cease to exist or cease to be 
available in that form for sale or purchase so as to attract the tax and, 
therefore, the correct meaning to be attributed to the said provision would 
be that tax will be attracted when such goods are consumed in the 
D manufacture of other goods or are consumed otherwise. [18-F-G] 
2. If the view in Pio Food Packers* case is accepted the result would 
be that the expression "otherwise" will qualify the expression "sale" and 
not the expression "manufacture" which is erroneous on a plain construc-
E tion of the provision. [18-G-H; 19-A] 
Ganesh Prasad Dixit v. Commissioner of Sales Tax, Madhya Pradesh, 
[1969] 3 SCR 490, affirmed. 
*Deputy Commissioner, Sales Tax (Law) Board of Revenue, (taxes), 
F Emakulam v. Pio Food Packers, (1980] 3 SCK 1271, overruled. 
G 
Hotel Balaji & Ors. v. State of Andhra Pradesh & Ors., [1992] Supp. 
2 SCR 182 and Deputy Commissioner of Sales Tax (Law) Board of Revenue 
(Taxes), Emakulam v.M/s. Thomas Stephen & Co. Ltd., [1988] 2 SCC 264, 
cited. 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2064-66 
of 1984. · 
WITH 
H 
C.A. No. 895-903/89, 4858-68/91 and 97/90. 
• 
_,. 
-4'-- ~· 
ASS'fT. C:OMMR. (INTELLIGENCE)"· NANDANAM CONSTRUCTION CO. [RAJENDRA BABU, J.] 15 
From tht: Judgment and Order dated 24.9.82 of the Andhra Pradesh A 
High Court in W.P. Nos. 2036, 3291 and 3696 of 1982. 
J. Ramamurthy, B. Sridhar, K. Ram Kumar, Mrs. Asha Nair and Ms. 
Shanti Narayan for the Appellant. 
U.N. Bachawal, A.D.N. Rao and A. Subba Rao (L.K. Pandey) (NP) B 
for the Respondents. 
The Judgement of the Court was delivered by 
RAJENDRA BABU, J.: The respondents are engaged in building of 
flats and houses for which purpose they buy materials such as sand, bricks c 
and
Excerpt shown. Read the full judgment & AI analysis in Lexace.