RALLIS LNDIA LTD versus STATE OF ANDHRA PRADESH

Citation: [1980] 2 S.C.R. 1028 · Decided: 12-02-1980 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Dismissed

Judgment (excerpt)

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1028 
RALLIS lNDIA LTD: 
v. 
STATE OF ANDHRA PRADESH 
February 12, 1980 
[R. S. PATHAK AND A. D. KOSIIAL, JJ.] 
Central Sales Tax Act 1956-Section 15(b )-Scope of. 
On the ground that the dealers have not charged and collected Central' 
Sales Tax during the period !st April, 1969 to 9th June, 1969 tho Commercill<l 
Tax Officer, allowed exemption under section 10 of the Central Sales Tax 
Act in respect of certain turn-over of the appellant which included the price 
realised on account of inter-state sales. In respect of a second set of transac-
tions which involved the purchase value of cotton sold during the: ye~r through 
inter-state sales the Commercial Tax Officer held that the appellant 'vas entitled 
to exemption under the proviso to section 6 of the A.P. General Sales Tax 
Act. 
In 1972 section 15(h) of the Central Act \\'as amended with retrospective 
effect from 1st October, 1958 and in 1974 section 6 of the State Act was 
amended with retrospective effect from the· same date. 
The Deputy Commissioner of c·ommercial Taxes revised the assessment 
order of the Commercial Tax Officer passed under the· State Act on the ground 
that in view of the provisions of section 6 as amended in 1974 the appellant 
was not entitled to any exemption during the above period. The Sales Tax 
Appellate Tribunal dismissed the ~pellant'S appeal on the view that section 6· 
of the State Act did not talk of any exemption either before or after its 
amendment in 1974. The High Court dismissed the appellant's appeal holding 
that the exemption granted by the C.T.O. was p<itcntly \vrong. 
Dismissing the Appeal, 
HELD: 1. Section 10 of the Central Act Vlhich inakcs no reference to 
any tax leviable under a State Act can be of no assistance to the appellant. 
Granting that the appellant did not collect any tax under the Central Act 
during the period in question on the ground" that no, such tax could have 
been levied or collected so that it becomes fully entitled to the benefit of 
the exemption enacted by the1 section, that \Vould only niean that central sales 
tax ca·nnot be charged from it in respect of sales covered by the section. No 
demand had been made from it for any tax Jeviable under the Central Act 
in respect of such sales and the appellant couid not derive any benefit from 
section 10 of the Central Act in the matter of its assessment under the State 
Act. 
[I033G-H] 
2. In so far as the a-ssessment under the State Ac.:t is concerned all that 
the C,T.O. could have meant by granting exemption \Vas that the appellant 
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became liable to pay a tax under the opening para. of the section; but that 
since the appellant wa-s also entitled to a refund of sucll tax the same was 
taken to have been paid by and refunded- to it. The assessment order made- I
RALLIS INDIA LTD. v. ANDHRA PRADESH (Kasha!, ], ) 
1029 
under the proviso to section 6 of the State Act and section 15 (b) of the 
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Central Act as they stood then was unexceptionable. 
[1034E-F] 
3. Under section 6 as amended the. liability to tax rcn1ained uncht.·nged 
but thci entitlen1ent to refund v1as abolished and was substituted by a right 
to reimbur.sen1ent of the tax \\'hich arose only if the concerned goods \Vere 
later on sold in the course of inter-state trade under the Central Act and tax 
under that A.ct was paid in respect thereof. 
Such reiniburs.ement would not 
be available merely because the goods in question had been sold in the course 
of inter-state ttade or commerce when they \Ve1e not subjected to tax under 
the Central Act. No such tax was paid. The proviso to section 6 as amended 
in 1974 can be of no assistance to the appellant. [1035A-B] 
4. The language of clau~e (b) of section 15 of ,the Central Act is the 
same as that of the amended proviso to secti6n 6 of the State Act. 
It 
clearly means that the tax under the State Act wouJd be rei1nhursible only 
to at dealer who has paid tax under the Central Act in respect of the sale 
of the goods in question in the course of inter-state trade 
or 
commerce. 
[1035C-D] 
5. The argun1ent that the Deputy Commissioner had no power to cancel 
the order of refund is fallacious. 
He has done nothing rnore than to revise 
an order of the C.T.O. which has been varied only in so far as it was not 
in conformity with the law deemed to have been prevailing on the da·te of 
the assessment by virtue of the retrospective amendment of section 6 of the 
State Act. The Deputy Commissioner had not onl

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