1982 (7) TMI 256 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of whether tamarind and tamarind flower are different commodities for sales tax exemption.

Analysis:
The case involved a reference under section 44 of the M.P. General Sales Tax Act, 1958, where the Board of Revenue sought the opinion of the High Court on the question of whether tamarind and tamarind flower should be considered as different commodities for the purpose of sales tax exemption. The assessee, dealing in kirana goods and foodgrains, claimed exemption for the sale of tamarind in the course of inter-State trade. The assessing authority initially denied the exemption, stating that the tamarind was sold after removing the seeds, thus changing its identity. However, the Board later allowed the exemption, leading to the reference to the High Court by the department.

The critical issue before the Court was whether the removal of seeds from tamarind constituted a change in its identity, affecting the eligibility for sales tax exemption in inter-State trade. The Court referred to a Supreme Court decision involving pineapple processing to analyze the concept of identity in goods. The Supreme Court had ruled that even with processing, the commodity retains its original identity unless there is a fundamental alteration. Applying this principle, the High Court concluded that the tamarind, despite seed removal, maintained its identity and form, thus justifying the Board's decision to grant the exemption.

In light of the Supreme Court's interpretation on the preservation of identity through processing, the High Court answered the referred question in the affirmative, favoring the assessee. The Court held that the tamarind, even after seed removal, retained its original identity, aligning with the requirements for sales tax exemption in inter-State trade. The judgment concluded with each party bearing their own costs in the case.