1984 (9) TMI 266 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of whether rice bran oil is considered edible for tax purposes.
2. Assessment of tax liability on the sale of rice bran oil in inter-State sales.
3. Validity of the communication by the Excise and Taxation Commissioner regarding taxability of rice bran oil.
4. Appealability of the assessment order under the Punjab General Sales Tax Act.
5. Quashing of the communication dated 4th February, 1982.

Analysis:

1. Interpretation of whether rice bran oil is considered edible for tax purposes:
The petitioner argued that rice bran oil is edible based on permissions granted by the Government of India for its use in the manufacture of edible vegetable oil products. However, the Assistant Advocate-General contended that rice bran oil in its crude form is not edible and becomes so only after refining. The court held that as per the definition and standards provided in the Prevention of Food Adulteration Rules, rice bran oil must be refined to be considered fit for human consumption. Therefore, the contention that rice bran oil is edible without refinement was rejected.

2. Assessment of tax liability on the sale of rice bran oil in inter-State sales:
The Assessing Authority determined that the rice bran oil sold by the petitioner was not edible and should be taxed at the general rate of 4 per cent instead of the concessional rate of 1 per cent. The petitioner's argument that the oil was edible was dismissed based on the requirement of refining for human consumption. The court upheld the tax liability at 4 per cent as per the assessment order.

3. Validity of the communication by the Excise and Taxation Commissioner:
The petitioner sought to quash the communication by the Excise and Taxation Commissioner regarding the taxability of rice bran oil. However, the court noted that the communication did not have the force of law and was not binding on the Assessing Authority. As the assessment order was not based on this communication, the court dismissed the petitioner's grievance regarding its validity.

4. Appealability of the assessment order under the Punjab General Sales Tax Act:
The petitioner argued that the assessment order was appealable under the Punjab General Sales Tax Act and that the alternative remedy of appeal should not bar the writ petition. The court held that since the petitioner had the option to appeal the assessment order, the writ petition was not maintainable, and the petitioner should pursue the available appellate remedies.

5. Quashing of the communication dated 4th February, 1982:
The petitioner contended that the communication should be quashed as it was issued by an unauthorized authority and without hearing the petitioner. The court noted that the communication had no legal binding and was not relied upon in the assessment order. Therefore, the court dismissed the petitioner's grievance regarding the communication.

In conclusion, the court upheld the tax liability on the sale of rice bran oil at the general rate of 4 per cent, rejected the petitioner's arguments regarding the edibility of the oil, and dismissed the writ petition due to the availability of alternative appellate remedies and lack of legal impact of the communication by the Excise and Taxation Commissioner.