1980 (10) TMI 197 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether "chunni" sold by the applicant is exempted under item No. 16 of Schedule I to the M.P. General Sales Tax Act, 1958.
2. Whether "chunni" sold by the applicant is exempted under Notification No. 1069-V-ST dated 22nd April, 1963, issued under section 12 of the M.P. General Sales Tax Act.

Detailed Analysis:

Issue 1: Exemption under Item No. 16 of Schedule I to the M.P. General Sales Tax Act, 1958

The applicant, a grain dealer and dal mill operator, contended that "chunni" should be exempt from sales tax under item No. 16 of Schedule I, which exempts "fodder except cotton-seed and oilcakes." The Tribunal and the appellate authorities had previously ruled that "chunni" is not included in the term "fodder" as it contains small particles of grain and can also be used by humans. The applicant argued that "chunni" is fodder and should be exempted. However, the court found that "fodder" in common parlance applies to roughages only, such as green grass, hay, and straw, and does not include concentrates like "chunni." The court cited the Full Bench decision in R.D. Parikh & Sons, which held that "fodder" does not include concentrates, oil-cakes, or cotton-seed. Thus, the court concluded that "chunni" does not fall under the exemption provided in item No. 16 of Schedule I.

Issue 2: Exemption under Notification No. 1069-V-ST dated 22nd April, 1963

The applicant also claimed exemption under Notification No. 1069-V-ST, which exempts "Husk of all grains, cereals, pulses and rice" and "Bran" from sales tax. The Tribunal had previously ruled that "chunni" is neither husk nor bran but a by-product containing small grain particles, which can be used by humans. The court examined the notification and determined that "chunni" cannot be classified as husk or bran. Citing the Full Bench decision, the court reiterated that "chunni" does not fit the definitions of husk or bran and thus is not exempt under the notification. The court also noted that "chunni" being a cattle feed does not automatically qualify it as fodder or bran for exemption purposes.

Conclusion:

1. "Chunni" sold by the applicant is not exempted from imposition of sales tax under entry No. 16 of Schedule I to the M.P. General Sales Tax Act, 1958.
2. "Chunni" sold by the applicant is not exempted from imposition of sales tax under Notification No. 1069-V-ST dated 22nd April, 1963, issued under section 12 of the M.P. General Sales Tax Act.

The answers are in favor of the revenue and against the applicant. The Commissioner of Sales Tax, Madhya Pradesh, will have costs of this reference, with a hearing fee of Rs. 250.