1990 (9) TMI 335 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of whether "groundnut kernel" falls under item 6(i) of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959.

Detailed Analysis:

1. Background: The cases involved a common issue of whether "groundnut kernel" falls under item 6(i) of the Second Schedule to the Act. The assessee disputed the tax levied on the purchase of groundnut kernel at a single-point rate, arguing that "groundnut" does not include "groundnut kernel."

2. Assessee's Argument: The counsel for the assessee contended that "groundnut" and "groundnut kernel" are distinct commercial commodities, citing the Supreme Court judgment in State of Tamil Nadu v. Pyare Lal Malhotra. The assessee argued that the Tribunal erred in subjecting groundnut kernel to multi-point tax.

3. Revenue's Argument: The Additional Government Pleader argued that "groundnut kernel" falls under item 6(i) of the Second Schedule, as previously held by the Court. The counsel distinguished cases cited by the assessee and maintained that groundnut kernel is liable to single-point tax.

4. Tribunal's Views: The Tribunal opined that "groundnut kernel" does not fall under item 6(i) and should be taxed at a multi-point rate. They emphasized the distinction between "groundnut" and "groundnut kernel" based on the legislative intent.

5. Court's Analysis: The Court examined the legislative intent behind item 6(i) and noted that "groundnut" must be read in conjunction with the principal entry "oil-seeds." Referring to past judgments, the Court concluded that "groundnut" includes "groundnut kernel" within its ambit.

6. Interpretation of "Peanut": The Court also analyzed the term "peanut" within the entry, clarifying that it refers to the oil-seed aspect of groundnut or peanut.

7. Precedent and Interpretation: Citing past judgments, the Court reinforced that "groundnut" encompasses "groundnut kernel" within its definition, especially considering the broader category of oil-seeds.

8. Comparison with Supreme Court Judgment: The Court distinguished the present case from the Supreme Court ruling cited by the assessee, emphasizing the context-specific interpretation of statutory entries.

9. Conclusion: The Court held that "groundnut kernel" falls under item 6(i) of the Second Schedule, rejecting the contention that it violates Article 14 of the Constitution. Consequently, the Court dismissed the assessee's petitions and allowed the State's petitions.

10. Final Decision: The Court dismissed the assessee's tax cases and writ petition, while allowing the State's petitions. No costs were awarded in the judgment.