1998 (8) TMI 582 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of the tax levied on the sale of mixture fertilizers.
2. Applicability of the Supreme Court's decision in Shaw Wallace & Co. Ltd. case.
3. Relevance of the Tamil Nadu General Sales Tax Act, 1959, to the present case.

Issue-wise Detailed Analysis:

1. Legality of the tax levied on the sale of mixture fertilizers:
The applicant, operating under the name M/s. M. Saha and Co., challenged the orders passed by the Commercial Tax Officer, Assistant Commissioner, and the West Bengal Commercial Taxes Appellate and Revisional Board. The Commercial Tax Officer had levied tax on the sale of mixture fertilizers for the assessment period ending Chaitra 1390 B.S., estimating sales at Rs. 3 lakhs and imposing a token penalty for late filing of returns. The Assistant Commissioner upheld the tax levy but set aside the penalty. The Board refused to interfere with the Assistant Commissioner's order. The applicant argued that mixing fertilizers manually with shovels does not constitute manufacturing, making, or processing, and thus, the sale of the mixture should not be taxed under the 1954 Act.

2. Applicability of the Supreme Court's decision in Shaw Wallace & Co. Ltd. case:
The respondents argued that the Supreme Court's decision in Shaw Wallace & Co. Ltd. [1976] 37 STC 522 was directly relevant. In that case, the Supreme Court held that the mixture of fertilizers prepared by dry mixing various chemical fertilizers and fillers resulted in a new commercial product with different properties and uses, and thus, was subject to fresh levy. The respondents contended that the facts of the present case were identical to those in Shaw Wallace, and the mixture fertilizer sold by the applicant was a different commercial product from its components, justifying the tax levy.

3. Relevance of the Tamil Nadu General Sales Tax Act, 1959, to the present case:
The applicant argued that the Tamil Nadu General Sales Tax Act, 1959, was not in pari materia with the West Bengal Sales Tax Act, 1954, and thus, the Supreme Court's decision in cases involving the Tamil Nadu Act should not apply. However, the Tribunal found that the definitions of "sale" in both Acts were essentially the same and that the Supreme Court's decision in Shaw Wallace was not specifically tied to the Tamil Nadu Act's unique provisions. The Tribunal concluded that the ratio of the Supreme Court's decision applied generally to cases involving the sale of fertilizer mixtures, regardless of the specific state legislation.

Conclusion:
The Tribunal held that the mixture fertilizer sold by the applicant was a different commercial product from its constituent fertilizers, with different uses and properties. Therefore, it was subject to tax under the West Bengal Sales Tax Act, 1954. The decisions of the Assistant Commissioner and the West Bengal Commercial Taxes Appellate and Revisional Board were deemed legally valid and proper. The application was dismissed without any order as to costs.