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1986 (4) TMI 334 - HC - VAT and Sales Tax
Issues:
Interpretation of whether copra is considered an oil-seed under the Central Sales Tax Act. Analysis: The case involved a reference made by the Commissioner of Commercial Taxes, Bihar, under section 33(1) of the Bihar Sales Tax Act, 1959, to determine if copra (gari gola) qualifies as an 'oil-seed' under clause (vi) of section 14 of the Central Sales Tax Act, 1956. The conflicting decisions of various High Courts on this matter prompted the reference. The dealer, a registered dealer in Arrah, claimed that copra should be taxed at 3% as it is an oil-seed. The appellate authority accepted this claim, leading to a revision by the Deputy Commissioner of Commercial Taxes. The Tribunal upheld the appellate authority's decision, prompting the department to seek a reference to the High Court for clarification. The Tribunal noted that different High Courts had previously addressed the issue of whether copra is an oil-seed. Some courts held that copra did not fall under the category of oil-seeds, while others, including the Supreme Court, considered copra as an oil-seed. The legislative amendment of section 14 by Act 61 of 1972 expanded the definition to explicitly include coconut (copra) as an oil-seed. This legislative change aimed to remove any ambiguity regarding the classification of copra as an oil-seed for taxation purposes. The High Court, after considering the legislative amendment and previous court decisions, concluded that copra (dry coconut) qualifies as an oil-seed under the amended section 14(vi) of the Central Sales Tax Act. Therefore, copra sales are taxable at 3% under section 6(3) of the Bihar Sales Tax Act, 1959. The court aligned its decision with the reasoning provided by other High Courts on this matter. The judgment favored the dealer, ruling against the revenue department. As the dealer did not contest the matter, no costs were awarded. The reference was answered affirmatively in favor of considering copra as an oil-seed for taxation purposes.
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