1988 (2) TMI 429 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether wax candles are distinct and different from wax for the purpose of the Assam Sales Tax Act, 1947.
2. Taxability of wax candles under the Assam Sales Tax Act, 1947 versus the Assam (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act, 1955.

Issue-wise Detailed Analysis:

1. Distinction between Wax Candles and Wax:
The primary issue was whether wax candles are goods distinct and different from wax under the Assam Sales Tax Act, 1947. The petitioner argued that wax candles should not be treated as distinct from wax since the essential character of wax does not change in the process of making candles. However, the Superintendent of Taxes and the Commissioner of Taxes held that wax candles are manufactured products distinct from wax. The court examined various precedents to determine whether the transformation of wax into candles constitutes the production of a new commodity. It concluded that the process of making candles, which involves moulding wax and inserting a wick, results in a distinct product with different form, utility, and marketability. Hence, wax candles are distinct from wax and are taxable as "other goods" under the Assam Sales Tax Act.

2. Taxability under the Assam Sales Tax Act, 1947 versus the Petroleum Taxation Act, 1955:
The petitioner contended that wax candles should be taxed under the Petroleum Taxation Act, 1955, as they are derivatives of petroleum. The court analyzed the definitions and provisions of both Acts. Section 6(1) of the Assam Sales Tax Act, 1947, excludes goods taxable under the Petroleum Taxation Act from its purview. The court referred to various judgments to understand the principles of transformation and manufacturing. It emphasized that the nature of the original article, the process of its transformation, and its recognition as a distinct article in common parlance are crucial in determining taxability. The court concluded that wax candles, being a distinct product manufactured from wax, are not covered under the Petroleum Taxation Act but are taxable under the Assam Sales Tax Act, 1947.

Conclusion:
The court held that wax candles are distinct and different from wax and are taxable under the Assam Sales Tax Act, 1947. The petition was dismissed, and the interim order was vacated.