The High Court · 2025

Counsel for the Petitioner: Sri T. Chaitanya Kiran, AGP for Sales Tax Counsel for the Respondent: None Appeared The Court made the following: ORDER 1 THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HOII'BLE SRI JUSTICE SUDDALA CH,C LAPATHI RAO T .No.2O2ot 2009 ORD ER: (Per the Hon'ble Si &strce SuLTdala Chatapatht t ao) The present Tax Revision Case is filed assir hng the orders of the Sales Tax Appellate Tribuna.l, Hyderabad(,,r )) (for short .the STAT), in TA.No.12 of 2008, dt.OS.05.2OO9. 2 Heard Sri T.Chaitanya Kiran, Iearned Assir; ant Government Pleader- for State Tax appear-ing for the petitionerT Revenue. None appeared for the respondent/ assessee, thoulJ r notices u,ere served.

3. The brief facts of th.: case ar.e that, the respc ndent/assessee is the Dealer on the Rolls of the Commercial Tax () ficer, Suryapet; that the respondent/assessee is the manuflacture r of Thermocole sheets' Though the respondent/assessee entitred G.O.Ms.No.5T4, dt.Og.06. 19g7, issued under thr APGST Act, (for short .the ActJ on the turnover of ,1. assessing authorit5r uide its order, dt.2..OS.2OOI denied setoff. Aggrieved by the same, the respondent/ assessee i led an appeal or setoff under provrsrons of termocole,, the 2 before the Appellate Deputy Commissioner(CT), Hyderabad Rural Division, Hyderabad uide Appeal No.N /2O7 I2OO2-2OO3. The said authority uideits order dt.21.12.2OO2 allowed the appeal filed by respondent/assessee, however, the Additional Commissioner(CT)(kgal), revised the said order passed by the Appeltate Deputy Commissioner(CT), Hyderabad, Rural Division, holding that the respondent/ assessee is not entitled for setoff on the turnover under G.O.Ms.No.574, dt.09.06.1987, conlirming the order of assessment passed by the Assessing Authorit5r i'e', Commercial Tax Oflicer, Suryapet, dt-27.O5-2002.

4. The respondent/assessee assailing the orders passed by the Ad.ditional Commissioner (CT) (Legal) uide CCT's Ref.L.[I(f)/223112OO4, dt.10.10.2006, filed appeal before the STAT, AP., Hyderabad in TA.No. 12 of 2OO8, by raising the following substantial questions ol iar'"': "1. Whether the assessee is eligible to avail the benefit of setoff under G.O. Ms. No. 57 4, dt.Og.06 -1987?

2. Whether G.O.Ms.No.574, dL.Og.06. 1987 is applicable for the commodity Thermocole', r,r'hich falls under VII Schedule of the Act?" 5 The main contention of the respon dent / assessee is that, it is a manufacturer of 'Thermocole sheets'and it had purchased raw- J material ,polyst5a.ene, from registered dealers r rd manufactured finished product ,Thermocole sheet,, and as 1 olystyrene, is the only raw-material used in the manufacture o[ Thermocole,, the rvas etigible for setoff of tir i on the turnover respondent/assessee in pursuance of G.O.Ms.No.574, dt.09.06. 1987. 6. It is further contended that the Additiona Commissioner of Commercial Taxes, Ap., Hyderabad, without conr; Cering the same, under erroneous views and facts revised the ord: -s passed by the Appellate Deputy Commissioner(CT), Hyderabit l, only on the ground that the respondent/assessee never clainr rd setoff for any of the previous assessment years and the resp r ndent/assessee has not filed any evidence to show that except toll,st5zrene, no other material was used in the manufacturing pro,: :ss. 7. The learned STAT, which is the facr Ii I iing appellate authorit-v' by appreciating the factual issues of m: nufacturing of Thermocole, held that .polyst5rrene, is the only ra\,, material used in the manufacture of ,Ihermocole, and as the sa ( raw material \lras purchased from the regrstered r ealers, the was entitled to set_olf under the respondent/ assessee GO.Ms.No.574, dt.09.05.19g7, and thus, alowed , re underlying 4 appeal, thereby directing the Assessing Authority to grant set-off the respondent/ assessee under on . the turnover to G.O.Ms.No.57 4, dt.Og.06.1987 . 8 Aggrieved thereby, the present Tax Revision Case is preferred by the petitioner/Revenue g.tearnedAssistantGovernmentPleaderappearingforthe petitioner/Revenue has supported the orders passed by both the Assessing Authority i.e., Commercial Tax Officer' Suryapet' dt.27.O5.2OO2, and orders of the revisional authority' dt. 10.10.2006, and sought to allovi' this revision case by setting aside the impugned order passed by the learned STAT'

10. We have given earnest consideration to the submissions of the learned Assistant Government Pleader for petitioner/Revenue and perused the record

11. As evident from the impugned order, the learned STAT having elaborately examined the manufacturing process of 'Ihermocole', which is the end product prepared by the respondent/ assessee by using the raw-material of 'polystyrene" which involves heating of 'polystyrene granules' at a particular 5 temperature and at thar particular heat point the .grarrules polystyrene' will be blown up due to free expar sion, resulting irr formation of 'foam,, which is commonly cal66 ,. .Thermocole,. Except, polystyrene granules,, no other raw nr tterial is used in the process of the finished product of Thermoco[, : sheets,. t2. As per Schedule t of the Act and under th,: G.O.Ms.No.574, dt.09.06.1987, the plastic granules, fall undr: Entry-lg6 and "Thermocole sheets, manufactured by using the raw r[2t61ia[ 6f 'polystyrene' purchased from the registered d: rlers, fall under Entrv- 187

13. In the light of the above factual matrix, ir our considered oprnion,'pol,r.styrene, is the only raw-materL; _l used in the linished product of ,Thermocole, and the frr dings of the Additional Commissioner(CT) in revising the .,\ rpellare Deput_v Commissioner's order holding that the respondt: rt/assessce has not avarled the set_off for previous years and no er idence is ptaced by the respond ent/assessee to show except .polyr;t yrene,, no other ra\\/-material is used, a-re pen/erse and erroneous. 6

14. That apart, the decision of this Court in Delta Paper Mllls Ltd, & Ors a. Oit & Nafilral Gas Commlssion & Others" (u.therein this court has categoricallg hetd that gas and diesel oil goods are stages of petroleum products and that once they are formed in the stages of manufctctuing, theg can be allowed setoffl' is squarely applicable to the present case'

15. Thus, we are of the considered opinion, that 'Thermocole' and 'Polystyrene' are both plastics, and ?olystyrene' is the only ralr,-material used in the manufacture of 'Thermocole" and the respondent/assessee is entitled to set-off for the turnover in pursLrance of GO Ms.No.574, dt.O9'06'1987, and accordingly' the orciers passed by the learned STAT are justified and valid' ald needs no interference by this Court.

16. In view of the above, we are of the considered view that the revisionpetitioner/Revenuefailedtosubstantiatetheircasefor intertering with the well considered orders passed by the learned STAT, and thus, the revision is devoid of merits and is liable to be dismrssed. r [199 r]81 STC 339(AP) 7

77. Accordingiy, we confirming the orcler TA.No. t2 / 2OoB, dt.Os.0S.2OO9. No order as to (x sts. hereby dismiss the Tr x Revision Case Passed by the L: rrned STAT in As a sequel thereto, shall stand closed. rniscellaneous petitiorLr , ig anl , pending SI /- A.V.S. PRASAD DE:I IUTY REGISTRAR 6 Ii :CTION OFFICER //TRUE COPY// To, 1 2 J The Sates Tax Appellate Trrt IH:, 3,? :1,1;? #s :.jrrs Two CD Copies VH/PSI, Jl' ;llTll,il,.-ll; I,lil: i:, *" s ta te or HIGH COURT DATED: 2411012025 ORDER TREVC.No.202 ot 2O09 DISMISSING TREVC b \ \1 'r,C Jt '- ' ' ri. ,:'. (' I.r L:-C ilm , 1i Da I L'.fril 0 I l' .i_,, 1\.-i. \l