1966 (9) TMI 102 - SC - VAT and Sales Tax

Whether under section 52(1)(e) of the Bombay Sales Tax Act, 1959 any tax was payable in respect of the sales of patasa , sakar , bura sugar , harda and alchidana ? Held that - Appeal dismissed. To be groundnut oil two conditions had to be satisfied-it must be from groundnut and it must be oil . The hydrogenated oil was from groundnut and in its essential nature it remained an oil. It continued to be used for the same purpose as groundnut oil which had not undergone the process. It was further stated the mere fact that hydrogenated oil was semi-solid did not alter its character as an oil. For the reasons already expressed we hold that the decision of the Gujarat High Court dated December 11, 1962, is correct

Summary

Issues Involved:
1. Whether the sales of "patasa," "harda," and "alchidana" are exempt from sales tax under entry 47 of Schedule A to the Bombay Sales Tax Act, 1959.
2. Whether these items should be classified as sweets and sweetmeats under entry 31 of Schedule C or under entry 22 of Schedule E to the Act.

Issue-wise Detailed Analysis:

1. Exemption of "patasa," "harda," and "alchidana" under Entry 47 of Schedule A:

The primary legal question was whether the sales of "patasa," "harda," and "alchidana" (small lumps of sugar) fall within the definition of "sugar" in entry 47 of Schedule A to the Bombay Sales Tax Act, 1959, and are therefore exempt from sales tax. The respondents applied under section 52 of the Bombay Sales Tax Act to determine the tax liability on these items. Initially, the Deputy Commissioner of Sales Tax exempted "bura sugar" but taxed the other items under different entries. Upon further revision, the Commissioner of Sales Tax held that "sakar" (sugar-candy) was a form of sugar and exempt under entry 47, but "patasa," "harda," and "alchidana" were products of sugar and not exempt. The Sales Tax Tribunal, however, ruled that these items should be treated as forms of sugar and exempt under entry 47. The Gujarat High Court upheld this view, stating that these items are merely different forms of sugar containing more than 90% sucrose as defined by the Central Excises and Salt Act, 1944. The Supreme Court agreed, emphasizing that the chemical composition and potential uses of these items are akin to sugar, thus falling within the ambit of entry 47.

2. Classification under Entry 31 of Schedule C or Entry 22 of Schedule E:

Given the affirmative answer to the first issue, the second issue regarding whether these items should be classified as sweets and sweetmeats under entry 31 of Schedule C or under entry 22 of Schedule E was not pressed by the respondents and was not answered by the High Court. The Supreme Court also did not find it necessary to address this issue, as the primary question of tax exemption under entry 47 had already been resolved in favor of the respondents.

Conclusion:

The Supreme Court upheld the Gujarat High Court's decision, confirming that "patasa," "harda," and "alchidana" are forms of sugar containing more than 90% sucrose and are exempt from sales tax under entry 47 of Schedule A to the Bombay Sales Tax Act, 1959. The appeal by the State of Gujarat was dismissed with costs.