1972 (2) TMI 79 - HC - VAT and Sales Tax

Summary

Issues:
Whether cardamom is considered an oil-seed for taxation purposes under the Central Sales Tax Act.

Analysis:
The judgment of the High Court of Andhra Pradesh dealt with the issue of whether cardamom should be classified as an oil-seed for taxation purposes under the Central Sales Tax Act. The petitioners, who were dealers in cardamom, argued that cardamom should be considered an oil-seed falling under section 14(vi) of the Act and therefore exempt from multi-point taxation. The Assistant Commissioner and the Sales Tax Appellate Tribunal had rejected their claims, stating that cardamom is not commonly known as an oil-seed. The court examined the common parlance test used to determine whether a commodity is an oil-seed and found that personal knowledge alone cannot be the basis for such a determination. The court also considered the various uses of cardamom, including as a spice, masticatory, and in medicine, as well as the extraction of oil from cardamom seeds for culinary and medicinal purposes.

The court further analyzed the definition of oil-seeds under section 14(vi) of the Central Sales Tax Act, which includes seeds yielding non-volatile oils used for human consumption, industry, varnishes, soaps, lubrication, and volatile oils used in medicines, perfumes, cosmetics, among others. The court found that cardamom seeds yield oil used for various purposes, including flavoring beverages and as a component in compound spirits. The court also noted that cardamom oil is not highly volatile, as evidenced by a loss of oil content over time, indicating it falls under the category of non-volatile oils used for human consumption. The court referenced official documents from the Government of India and the Board of Revenue, Andhra Pradesh, which classified cardamom as an oil-seed under section 14 of the Act, supporting the petitioners' argument.

Based on the analysis, the court concluded that cardamom should be considered an oil-seed falling under section 14(vi) of the Central Sales Tax Act and, therefore, exempt from multi-point taxation. The court allowed the petitions, directing the deletion of the petitioners' sale turnovers of cardamom from the taxable turnover and ordering a revision of the assessments in each case. The court awarded costs to the petitioners and allowed the petitions with an advocate's fee specified for each case.