2006 (8) TMI 552 - HC - VAT and Sales Tax

Issues Involved:
1. Whether Robinson barley is covered under Sl. No. 33 of the notification dated June 30, 1990, and is taxable at the first point of sale.

Issue-wise Detailed Analysis:

1. Taxability of Robinson Barley:

The primary issue addressed in the judgment was whether Robinson barley falls under the category specified in Sl. No. 33 of the notification dated June 30, 1990, and if it should be taxed at the first point of sale.

Material Facts:

The petitioner, a registered dealer, was originally assessed under section 12(4) of the Orissa Sales Tax Act, 1947, for the years 1990-91 and 1991-92. Upon reassessment under section 12(8) of the OST Act, the Sales Tax Officer determined that Robinson barley, sold by the petitioner, was not exempt from tax and should be taxed at 12 percent at the last point of sale. This decision was challenged by the petitioner through various appeals.

Tribunal's Decision:

The Tribunal concluded that Robinson barley is not the same as barley in its cereal form and thus cannot be taxed at the first point of sale at the rate of four percent.

Petitioner's Arguments:

The petitioner's counsel argued that Robinson barley should be considered as barley and thus should be taxed at the first point of sale at four percent. The counsel cited several judgments to support the contention that Robinson barley is essentially barley and should not be treated as a distinct commodity.

Court's Examination:

The court examined the notification dated June 30, 1990, which listed cereals and their tax rates. The court noted that barley is included in the list of cereals subject to first point sales tax at four percent. However, it was established that Robinson barley undergoes significant processing, including chemical treatments and fortification with iron and calcium, making it a distinct commercial entity from barley.

Relevant Judgments:

- M.N. Nilugal v. District Manager, Food Corporation of India: The court distinguished this case by noting that Robinson barley is a processed commodity, unlike the damaged wheat/rice in the cited case.
- Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Pio Food Packers: The court found this case inapplicable as Robinson barley undergoes substantial chemical transformation, making it different from barley.
- Alladi Venkateswarlu v. Government of Andhra Pradesh: The court distinguished this case by noting that Robinson barley and barley are not the same due to the chemical processes involved.
- Rasoi Products v. Commercial Tax Officer: The court found this case factually distinguishable as it did not involve a similar transformation process.
- Ram Bhadur Takkur Takkur (P) Ltd. v. Coffee Board, Bangalore: The court noted that this case did not apply as it involved a different type of commodity transformation.
- Filterco v. Commissioner of Sales Tax, Madhya Pradesh: The court applied the common parlance test and concluded that Robinson barley is different from barley.
- Commissioner of Sales Tax v. Agarwal Co.: The court found this case based on different factual contexts.
- Atlantis (East Limited) v. Additional Member, Board of Revenue, West Bengal, Calcutta: The court found this case inapplicable as it involved a different commodity.
- Modi Inds. Ltd. v. State of Orissa: The court noted that this case was based on different facts and did not apply to Robinson barley.

Revenue's Argument:

The Revenue relied on the decision in Rajasthan Roller Flour Mills Association v. State of Rajasthan, where the Supreme Court held that products derived from wheat, such as flour, maida, and suji, are not the same as wheat. Applying this principle, the court concluded that Robinson barley, derived from barley, is not the same as barley and cannot be treated as declared goods under the Central Sales Tax Act.

Conclusion:

The court upheld the Tribunal's order, concluding that Robinson barley is not the same as barley in the form of cereals and cannot be taxed at the first point of sale at the rate of four percent. Both revision petitions were dismissed, with no order as to costs.

Separate Judgment:

I. Mohanty J. concurred with the judgment.

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