M/S. SHAKTHI SEEDS PVT. LTD. versus DY. COMMNR. (CT) AND ANR.

Citation: [2007] 7 S.C.R. 844 · Decided: 30-05-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
MIS. SHAKTHI SEEDS PVT. LTD. 
v. 
. DY. COMMNR. (CT) AND ANR. 
" ' 
MAY 30, 2007 
B 
[DR. ARIJIT PASAYA T ANO LOKESHWAR SINGH PANT A, JJ.] 
Sales Tax: 
Andhra Pradesh 'General Sales Tax Act, 1957-GOM<• No. 604 Rev(s) 
C dated 9.4. 1981-Exemption under"-Requirementfor-Held: Claimant required 
to prove that seeds in question are either certified seeds or truthfully labelled-
C/arificatory Memorandum dated 26.4. 1994. 
Appellant-assessee is a registered dealer in agricultural seeds, chillies, 
paddy and other crops. The Commercial Tax Officer passed assessment orders 
D in respect of turnovers granting benefit of G.O.Ms. No. 604 Rev(s) dated 
9.4.1981 and G.O.Ms. No. 129 Rev. (CT II) dated 14.2.1989 issued under 
Andhra Pradesh Gen('ral Sales Tax Act, 1957. 
The Deputy Commissioner revised the assessment order and proposed 
E tax on those .items as the appellant effected purchase from unregistered 
dealers and are liable to tax as first purchasers within the State of Andhra 
Pradesh. 
On appeal, Tribunal held that in order to claim exemption in terms of 
G.O.Ms. No 604 dated 9.4.1981, the claimant is required to establish and 
F prove that the seeds in question are certified seeds as well as truthfully 
labelled seeds and that the appellant-dealer has failed to adduce any 
satisfactory material and evidence to establish these two conditions for grant 
of exemption. High Court affirmed the order of Tribunal Hence the present 
appeal 
G 
Allowing the appeal, the Court 
H 
HELD: 1. The Tribunal proceeded on the basis that the seeds were . 
required to be certified and truthfully labelled for the purpose of eligibility 
for exemption. The Clarification Memorandum dated 26.4.1994 clarified that 
844 
,.-
SHAK THI SEEDS PVT. LTD. v. DY. COMMNR. ( CT)[PASA Y AT, J. ] 
845 
two alternatives are available i.e. either certified or truthfully labelled. The A 
High Court also overlooked the clarificatory memorandum. In the 
circumstances, it would be appropriate for the Tribunal to examine the factual 
aspect, keeping in view the clarificatory memorandum providing alternatives. 
The parties shall be free to lead fresh evidence. The appellant shall produce 
evidence to show that the seeds were truthfully labelled. It cannot be said 
that the authorities cannot require the dealer to satisfy the requirement that B 
the seeds were truthfully labelled. There is no such blanket protection. In 
order to be satisfied about the acceptability of the claim, they can require the 
assessee to justify the claim and that it is entitled to the exemption. 
(Para 11, 13, 14 and 15J (849-A, C, D, EJ 
Gururaj Seeds (P) Ltd. v. State of Andhra Pradesh and Ors., 18 APSTJ 
46, referred to. 
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 4649 of2002. 
c 
From the Final Judgment and Order dated 10.09.2001 of the High Court D 
of Judicature of Andhra Pradesh at Hyderabad in Tax Revision Case No. 156 
of2001. 
Kuna! Verma, M. Mannan, C.S.N. Mohan Rao, Arjun Garg and R. 
Shrivastava for the Appellant. 
Manoj Saxena, Rajnish K. Singh, Raul Shukla and T.V. George for the 
Respondents. 
The Judgment of the Court was delivered by 
E 
DR. ARIJIT PASA Y AT, J. 1. Challenge in this appeal is to the judgment F 
of a Division Bench of the Andhra Pradesh High Court dismissing the Revision 
Petition filed by the appellant under Section 22( l) of the Andhra Pradesh 
General Sales Tax Act, 1957 (in short the 'Act'). Before the High Court 
challenge was to the order passed by the Sales Tax Appellate Tribunal, 
Andhra Pradesh (in short the 'Tribunal'). 
G 
2. Background facts in a nutshell are as follows: 
Mis. Shakthi Seeds (P) Ltd., the appellant herein, is a private limited 
company and they are dealers in agricultural seeds, chillies, paddy, sun-flower 
and other crops. It is an assessee and a registered dealer under the Act. The H 
Commercial Tax Officer, Hyderguda Circle, Hyderabad, framed final assessment 
846 
SUPREME COURT REPORTS 
(2007] 7 S.C.R. 
A orders in respect of me turnovers for the assessment year 1992-93 granting 
benefit of G.O.Ms. No. 604, Rev (S), dated 9.4.198 l and G.O.Ms. No. 129 
Rev(CT II), dated 14.~.1989. However, the Deputy Commissioner (en, Abids 
Division, Hyderabad, on scrutiny of the assessment finalised by the Commercial 
Tax Officer vide his proceedings dated 16.12.1993 noticed that the appellant 
after purchasing chillies, paddy and sun-flower from unregistered dealers, 
B sold those goods as "certified and truthfully labelled seeds" 

Excerpt shown. Read the full judgment & AI analysis in Lexace.