1969 (10) TMI 65 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether "watery cocoanuts" are "oil-seeds" within the meaning of section 14(vi) of the Central Sales Tax Act.
2. Whether "watery cocoanuts" are exigible to tax in the course of inter-State trade or commerce when they have already suffered tax under the Andhra Pradesh General Sales Tax Act, 1957.
3. The effect of Ordinance 4 of 1969 on the applicability of the Central Sales Tax Act.

Detailed Analysis:

1. Whether "watery cocoanuts" are "oil-seeds" within the meaning of section 14(vi) of the Central Sales Tax Act:
The petitioner, a registered dealer in watery cocoanuts, contended that cocoanuts, including watery cocoanuts, should be classified as "oil-seeds" under section 14(vi) of the Central Sales Tax Act. The court examined the definition of "oil-seeds" and concluded that "oil-seed" refers to any seed yielding oil. It was noted that cocoanuts are primarily used to produce copra, from which oil is extracted. The court cited various authoritative sources and previous judgments to support the view that both fresh and dried cocoanuts yield oil and are, therefore, oil-seeds. The court concluded that "watery cocoanuts" meet the criteria of being seeds that yield oil and thus fall within the definition of "oil-seeds" under section 14(vi) of the Central Sales Tax Act.

2. Whether "watery cocoanuts" are exigible to tax in the course of inter-State trade or commerce when they have already suffered tax under the Andhra Pradesh General Sales Tax Act, 1957:
The petitioner argued that since cocoanuts, including watery cocoanuts, have already been taxed under the State Act, they should not be subject to further tax under the Central Act. The court examined the relevant provisions of both the State and Central Acts. It noted that section 15 of the Central Act provides for a refund of tax levied under the State Act if the goods are declared to be of special importance in inter-State trade or commerce. The court concluded that "watery cocoanuts," being "oil-seeds," are declared goods and thus subject to the provisions of sections 8 and 9 of the Central Act. However, it held that the Commercial Tax Officer could only levy a tax at the rate of 2% as provided under the Central Act, not the proposed 10%.

3. The effect of Ordinance 4 of 1969 on the applicability of the Central Sales Tax Act:
The court examined the amendments introduced by Ordinance 4 of 1969, which modified sections 2, 6, and 9 of the Central Sales Tax Act. The amendments clarified that the turnover for the purpose of the Central Sales Tax Act must be determined according to the provisions of the Central Act and the rules made thereunder. The court noted that the amendments had retrospective effect, meaning they applied from the date the principal Act was enacted. The court concluded that the amendments made it clear that goods are exigible to tax under the Central Act irrespective of their tax status under the State Act. Therefore, "watery cocoanuts" are subject to tax under the Central Act, even if they have already been taxed under the State Act.

Conclusion:
The court held that "watery cocoanuts" are "oil-seeds" within the meaning of section 14(vi) of the Central Sales Tax Act and are declared goods. Consequently, they are subject to tax under the Central Act. However, the court found that the Commercial Tax Officer's proposal to levy a tax at the rate of 10% was without jurisdiction. The officer could only levy a tax at the rate of 2%. The court quashed the notice to the extent that it proposed a 10% tax and allowed the writ petition in part. The petitioner was awarded costs.

Judgment:
- Petition partly allowed.
- Notice proposing a 10% tax quashed.
- Notice proposing a 2% tax upheld.