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Judgment
Syed Shah Mohammed Quadri, J.—In these Special Appeals the question of law that arises for consideration is, whether the appellant-assessee is entitled to the benefit of G.O.Ms.No. 573 Revenue (S) Department, dated 9-6-1987.
These cases relate to the same assessee. Special Appeal No. 14/94 relates to the assessment year 1988-89; Special Appeal No. 15/94 relates to the assessment year 1990-91 and Special Appeal No. 16/94 relates to the assessment year 1987-88; Special Appeal No. 30/95 relates to the assessment year, 1989-90.
We shall now refer to the facts in one of the appeals, Special Appeal No. 14/94, as the facts in the other Special Appeals are similar.
The appellant is a dealer registered under the A.P. General Sales Tax Act. It is a unit engaged in the manufacture of straw boards with paddy straw as a raw material. Item 143 of the First Schedule before its deletion from the First Schedule read with Section 5(2) of the A.P. General Sales Tax Act (for short "the Act") made the turnover of the straw boards assessable to sales tax at 7%. However, the Government of Andhra Pradesh issued G.O.Ms.No. 573 Revenue (S) Department, dated 9-6-1987, granting reduction in the rate of tax i.e. at the rate of 4%. The assessing authority rejected the claim of the appellant and assessed to tax the disputed turnover at the rate of 8.25%. But on appeal the Appellate Deputy Commissioner took the view that the appellant was entitled to the benefit of the reduced rate of tax under the said G.O. and accordingly allowed the appeal on 3-3-1989. The Commissioner of Sales-tax, in exercise of the power u/s 20 of the Act suo motu revised that order of March, 3, 1989, came to the conclusion that the said G.O. was not applicable to the case of the appellant and accordingly set aside the order of the appellate authority and directed assessment of tax at the rate prescribed under the First Schedule, by his order dated December 18, 1993. It is that order that is appealed against in these Special Appeals.
Mr. B. Adinarayana Rao, the learned counsel for the appellant, contends that having regard to the definition of ''paper'' in item 143 of the First Schedule, straw board falls within the meaning of ''paper'' and therefore, there was no justification for the Commissioner to set aside the order of the appellate authority viz., the Appellate Deputy Commissioner and hold that the appellant is not entitled to the concessional rate.
The learned Government Pleader for Taxes contends that the G.O. grants concessions in favour of ''small paper mills'' and as the appellant is a small scale straw board mill'', the benefit of the concession rate of tax cannot be granted to it. He further submits that the appellant has not merely to satisfy the requirements of G.O.Ms.No. 573 dt. 9-6-1987, but he should also satisfy the requirements of G.O.Ms.No. 912 dated 20-10-1990 and that there is no finding that the production of the appellant in the relevant preceding financial year was less man 24,000 tonnes; for this reason also the appellant is not entitled to the concession under G.O.Ms.No. 573 dt. 9-6-1987.
The short question that arises for consideration in these Special Appeals is, whether the appellant is entitled to the benefit of G.O.Ms.No. 573, Revenue (S) Department, dt.9-6-1987.
It will be relevant to note here Entry 143 of Schedule I of the Act which, during the relevant period, reads thus:-
"143. Paper of all kinds (including paste-board, mill-board, straw board and card-board, that is to say:
(i) Cigarette tissue.
(ii) Blotting, toilet or target tissue, teleprinted, typewriting, manifold, bink, bond or art paper, chrome paper, tub sized paper, cheque paper, stamp paper, cartridge paper, parchment and coated board (including art board), chrome board and board for playing cards.
(iii) Printing and writing paper, packing and wrapping paper, straw board and pulp board, including grey board, corrugated board, duplex and triplex boards or other sorts.
(iv) All other kinds of paper and paper board, not otherwise specifically mentioned above, including carbon paper but excluding cinematographic and photographic paper."
From a perusal of the above Entry, particularly Clause (iii), it is evident that the straw board falls within the meaning of Entry 143 of Schedule I (Now Entry 19 of the Sixth Schedule). A reading of the above Entry shows that it covers all papers including paste-board, mill board, straw board and card board. Hence we have no hesitation in holding that the words "paper" and "paper boards" in the above entry include "straw board" also. A Division Bench of this Court in its judgment in T.R.C. Nos. 305/85 and 322/85, dated 15-2-1989, has also taken the view that the expression ''paper'' includes ''paper board''
To deal with the question of applicability of G.O.Ms.No. 573 dated 9-6-1987 to the appellant, it would be apt to extract the said G.O. here:
"G.O.Ms.No. 573 Revenue (S) Department, dated 9-6-1987: In exercise of the powers conferred by Sub-section (1) of Section 9 of the Andhra Pradesh General Sales Tax Act, 1957 (Andhra Pradesh Act No. VI of 1957) the Governor of Andhra Pradesh hereby directs that with effect from the 15th June, 1987, the tax leviable under Sub-section (2) of Section 5 read with item 143 of the First Schedule to the said Act shall in respect of paper and paper boards manufactured by small paper mills using straw, bagasse, waste paper and non-conventional raw material be at the reduced rate of 4% in the rupee at the point of first sale in the State."
In this context the Commissioner posed two questions, viz., (i) whether the expression ''paper and paper board'' includes ''straw board''; (ii) whether ''small paper mills'' means and includes ''small scale mills manufacturing straw board'' as in the case of the dealer in question. The Commissioner answered the first question in the affirmative - in favour of the appellant. On the second question while rejecting the contention of the appellant that the small paper mill includes a small scale unit of straw board mill, answered that question holding the words "paper and paper board" would not include "straw board". In our view, this conclusion of the Commissioner is inconsistent with his finding, referred to above. The expression "paper Mill'' is a generical term of which "straw board Mill" is a specie. Therefore, it follows that while a ''straw board mill'' would not take in its fold ''any paper mill'' but the expression ''paper mill'' is wide enough to take within its ambit the ''straw board mill''. In this view of the matter, the expression small paper mills'' in the said G.O.Ms.No. 573 dated 9-6-1987 includes a ''small scale industrial unit of straw boards'', hence the said G.O. is applicable to the case of the appellant.
Now reverting to the contention of the learned Government Pleader with regard to G.O.Ms.No. 912 Revenue dated 20-10-1990 which amended G.O.Ms .No. 573 dated 9-6-1987, it will be useful to extract the amendment which reads as under:
".........the following shall be added, namely:
"Provided that
The concession or reduction of rate of tax shall be applicable to the small paper mills whose aggregate production of paper and boards does not exceed 24,000 (twenty four thousand) tonnes in the preceding financial year.
The paper mill shall also produce a certificate from the Superintendent of Central Excise to the effect that the paper mill is a small paper mill using unconventional raw materials.
The imported wood pulp used in the manufacture of paper or paper boards shall not exceed fifteen per cent.
The paper mill shall not have plant attached thereto for making bamboo or wood pulp."
This amendment is not retrospective. Therefore, it would come into force from the date it was issued, October 20, 1990. It will only apply to the appellant in Special Appeal No. 15 of 1994. A plain reading of this G.O. makes it clear mat to claim benefit under G.O.Ms.No. 573 dated 9-6-1987, referred to above, the following four requirements should be satisfied:
(i) that the production of paper and board should not exceed 24,000 tonnes in the preceding financial year;
(ii) that the paper mill shall produce a certificate from the Superintendent of Central Excise to the effect that the paper mill is a small paper mill using unconventional raw materials;
(iii) mat the imported wood pulp used in the manufacture of paper or paper boards shall not exceed fifteen per cent; and (iv) that the paper mill shall not have plant attached thereto for making bamboo pulp or wood pulp.
In respect of the said Special Appeal No. 15 of 1994 which relates to the assessment year 1990-91, compliance of requirements 2 to 4 is not disputed. What is urged by the learned Government Pleader is that there is no finding that in the preceding year, the production of the mill has not exceeded 24,000 tonnes. In view of this contention, we would have remanded the matter to the assessing authority but for the fact that in the order of the Commissioner with reference to the assessment year 1995-96, in the proceedings dated 19-3-1996, it is recorded that the manufacturing capacity of the appellant is less than 24,000 tonnes per year. If the manufacturing capacity itself is less than 24,000 tonnes we find it unnecessary to remand the matter to ascertain whether in the preceding year it has produced less than 24,000 tonnes or not.
For the aforesaid reasons the orders under appeals in the above Special Appeals are set aside and the appeals are accordingly allowed but in the circumstances of the case we make no order as to costs.