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THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN AND THE HON’BLE SRI JUSTICE M. SATYANARAYANA MURTY
T.R.C.Nos.55, 71 and 79 of 2000
COMMON ORDER (Per the Hon’ble Sri Justice Ramesh Ranganathan)
These tax revision cases are preferred against the common order passed by the Sales Tax Appellate Tribunal, Hyderabad in T.A.Nos.722 of 1995, 537 and 602 of 1996 dated 19.01.2000. While the respondent in TRC Nos.55 and 71 of 2000 is also the respondent in TRC No.79 of 2001, no counsel has entered appearance on their behalf in TRC No.79 of 2000 though notice was served on them. Neither is Sri K.V.Bhanuprasad, learned counsel for the respondent in T.R.C.Nos.55 and 71 of 2001, present nor is there any representation on his behalf. As these revision cases relate to the year 2000, and are pending on the file of this Court for the past 14 years, we see no reason to defer hearing thereof. The respondent herein is a dealer manufacturing and selling cement. They were assessed by the Commercial Tax Officer, Suryaraopet, Vijayawada, for the assessment years 1991-92, 1992-93 and 1995-96 under Andhra Pradesh General Sales Tax Act, 1957 (for short ‘the Act’). The assessing authority granted exemption on the sale of cement by the respondent, for construction of biogas plants, relying upon G.O.Ms.No.2048 dated 14.12.1982 and G.O.Ms.No.422 dated 27.04.1985 for the assessment years 1991-92 and 1992-93. The said order was revised by the Deputy Commissioner. Aggrieved thereby, the respondent carried the matter in appeal to the Tribunal. For the assessment years 1995-96, the respondent was denied the benefit of exemption. Aggrieved thereby, they carried the matter in appeal
to the Appellate Deputy Commissioner. On the said appeal being dismissed, they carried the matter in appeal to the Sales Tax Appellate Tribunal. By the order under revision, the Tribunal held that a biogas plant consists of construction of a tank for which cement is used as mortar, and for plastering the walls to insulate leakage of biogas; once the plaint is embedded to the earth, it becomes immovable property, and falls outside the purview of the Act; the biogas plant cannot be understood as a single item; cement is one of the major ingredients, without which the existence of the plant cannot be imagined; In Commissioner of Income Tax v. The Tajmahal Hotel (1982 ITR 46) it was held that pipeline, embedded to the earth, did not fall under the expression ‘plant’; the word ‘plant’ is so comprehensive as to encompass all items which necessarily go into it; cement is issued in the manufacture of biogas plant; as cement is used for erection of biogas plants, it can be treated as an item that falls under the exemption G.Os; and items, maintained for use in a plant, would also fall within the ambit of a biogas plant. All the three appeals were allowed. Aggrieved thereby, the Revenue has filed these revision cases before this Court. G.O.Ms.No.2048, Revenue Department, dated 14.12.1982 reads as under:- “In exercise of the powers conferred by sub-section (1) of Section 9 of the A.P.General sales Tax Act, 1957 (A.P.Act VI of 1957) the Governor of A.P. hereby exempts from the tax payable under the said Act, the sales of renewable energy equipment such as solar, wind and bio-mass devices”.
The said G.O. was amended by G.O.Ms.No.422, Revenue dated 27.04.1985, which reads as under:- “In exercise of the powers conferred by sub-section (1) of Section 9 of the A.P.General sales Tax Act, 1957 (A.P.Act VI of 1957) the Governor of A.P. hereby amends the notification issued in
G.O.Ms.No.2048, Revenue (S) Department, dated 14.12.1982 and published at page 651 of Part (1) of the A.P.Gazette dated 08.09.1983”.”
For the words, such as, “solar, wind and bio-mass’, the following 20 items were substituted; 1. Flat plate solar collectors. 2. Concentrating and pipe type solar collectors. 3. Solar cookers of various sizes. 4. Solar water heaters and systems. 5. Air/Gas/Fluid heating systems. 6. Solar stills and desalination systems. 7. Solar pumps based on solar thermal and solar photovoltaic conversion. 8. Solar power generating systems. 9. Solar drop drier and systems. 10. Solar pond and systems. 11. Solar photovoltaic modules and panels for water pumping, lighting and other applications. 12. Solar refrigerators, cold storages and air-conditioning systems. 13. Biogas, plants, stoves, appliances and engines. 14. Wind mills and any specially designed equipment which run on wind mills/wind power. 15. Any special devices including electric generators and pumps running on wind energy. 16. Agricultural and Municipal waste conversion device producing energy. 17. Equipment for utilising ocean waves and thermal energy. 18. Bio- mass devises. 19. Improved wood burning stoves (Chulhas) 20. Machinery and plant used in the manufacture of any of the above sub-items.
Item 13 is relevant for the purpose of this case and relates to “biogas plants, stoves, appliances and engines”. Sale of renewable energy equipment is exempted from tax in terms of G.O.Ms.No.2048 dated 14.12.1982. The items, which fell under the category of renewable energy equipment, were limited only to solar, wind and bio-mass devices under G.O.Ms.No.2048 dated 14.12.1982.
The number of items, which fell under the category of renewable energy equipment, were extended and, instead of the words ‘solar, wind and bio-mass’, 20 items were substituted. It is not every “plant” which is exempt in terms of the aforesaid G.Os, but only “biogas plants”, which constitute renewable energy equipment, which are exempted from sales tax. As a plant embedded to the earth would not constitute goods, liable to tax under the APGST Act, the renewable energy equipment, referred to in G.O.Ms.Nos.2048 and 422, would only be those equipment, which is not a “plant” embedded to the earth. Treating these “plants” as renewable energy equipments would mean that exemption is granted for “plants’ which are not even taxable under the Act. It is evident, therefore, that it is only the sale of biogas plants, which constitute renewable energy equipment, which alone is exempt from tax, and not its ingredients. Cement per se is not a renewable energy equipment nor is it a biogas plant. If cement is used in construction of a biogas tank embedded to the earth, such biogas tank may also not be eligible for exemption. The ingredients of a “biogas plant”, such as “cement”, are not entitled for exemption under the aforesaid G.Os., as they are neither biogas plants nor renewable energy equipment. The Tribunal has erred in granting the respondent, who is a manufacturer and seller of cement, the benefit of exemption under the aforesaid G.Os. The orders of the Sales Tax Appellate Tribunal, under revision in these TRCs, are set aside and the Tax Revision Cases are allowed. However, in the circumstances, without costs. Miscellaneous petitions, if any, pending in these revisions shall stand closed.
_____________________________ RAMESH RANGANATHAN, J
_____________________________ M. SATYANARAYANA MURTY, J
4th September, 2014 sj