1975 (2) TMI 104 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of entry 12 of Schedule A under the Bombay Sales Tax Act, 1959 regarding the exemption of tamarind seed powder from tax liability.

Analysis:
The case involved a reference under section 61(1) of the Bombay Sales Tax Act, 1959, to determine the tax liability on the sale of tamarind seed powder under entry 12 of Schedule A. The Tribunal had to decide whether the sale of tamarind seed powder was covered by this entry and thus exempt from tax. The Commissioner of Sales Tax initially classified it under a different entry, but the Tribunal disagreed and held it to be covered by entry 12 of Schedule A, which includes chillies, chilly powder, tamarind, and turmeric. The key contention was whether tamarind seed powder should be considered part of the exemption based on the wording of the entry.

During the proceedings, arguments were presented regarding the interpretation of the entry. The applicant's counsel contended that for tamarind seed powder to qualify for exemption, it must involve the entire tamarind fruit, including its skin and seeds, being powdered and sold. However, the department and the Tribunal considered the possibility of even the pulp of the tamarind fruit being powdered, which the applicant disputed. The Tribunal's decision was based on the understanding that tamarind seeds or skin could be powdered, and therefore, the entry encompassed these parts of the fruit. The applicant relied on a Madras High Court decision regarding the distinction between tobacco and tobacco seeds, but the court found this analogy unsuitable for the tamarind seed powder exemption case.

In contrast, the respondents' counsel referred to a Kerala High Court decision related to the interpretation of tax rules on cashew kernel, suggesting that when a specific term like "tamarind" is used, its seeds should be included, especially when it is acknowledged that only the seeds or skin of tamarind can be powdered. Drawing parallels with the treatment of groundnut and cashew kernel under tax rules, the court concluded that the Tribunal was justified in its interpretation that tamarind seed powder fell under entry 12 of Schedule A. Therefore, the court answered the question in the affirmative, affirming the Tribunal's decision and directing the applicant to pay the costs of the reference.

This judgment clarifies the scope of the exemption for tamarind seed powder under the Bombay Sales Tax Act, emphasizing the interpretation of the relevant entry in Schedule A. The decision provides a detailed analysis of the arguments presented by both parties and references previous legal interpretations to support the conclusion reached by the court.