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TMI Blog1994 (4) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... t oil and groundnut oil cakes are obtained. The groundnut oil cake again is subjected to the process in the solvent in which "food hexane" is sprayed to obtain solvent groundnut oil and groundnut deoiled cake. The deoiled cake is then granuled by grinding and the end-product which is "groundnut protein flour" is again subjected to heat and steam treatment under controlled and regulated conditions to ensure removal of solvent and brought into a uniform composition. Colouring or flavouring agents are added to this flour so as to conform to the requirements mentioned in the Fifth Schedule to the Solvent Extracted Oil, Deoiled Meal and Edible Flour (Control) Order, 1967, for short "the Order" issued under section 3 of the Essential Commodities Act. For the assessment year 1977-78, the Commercial Tax Officer, Kurnool, determined the tax liability in respect of the respondent's net turnover under the CST Act at 4 per cent on groundnut protein flour. On appeal the Assistant Commissioner concluded that it is deoiled cake within entry 29 of the First Schedule to the Act, exigible to sales tax at 1 per cent at the point of first sale in the State. The Deputy Commissioner exercising suo motu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dible oilseeds or as a result of direct extraction of oil from such oilseeds. Rule 3 regulates their production by a licence and rule 9 regulates sale thereof. Sub-rule (5) of rule 9 provides that no person shall manufacture, stock for sale, or sell or offer for sale deoiled meal unless in the case of meal intended for use as livestock feed, such deoiled meal conforms to the standards of quality for the appropriate deoiled meal specified in the Fourth Schedule. Similarly sub-rule (6) of rule 9 is with regard to edible groundnut flour. Clause (iv) therein provides that "the edible flour" conforms the standards of quality specified in the Fifth Schedule. The quality, content and the percentage of the respective deoiled meal and edible groundnut flour have been prescribed in the Fourth Schedule and the Fifth Schedule, respectively, the details of which are not necessary to specify in this judgment, since across the bar there is no dispute regarding the differences enumerated therein. But the controversy raised across the bar and also found acceptable to the High Court in favour of the assessee, is that as per the analyst's report deoiled cake and groundnut protein flour bear some comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deoiled cakes and groundnut protein flour and gave time till Thursday, i.e., April 14, 1992. Even till today, i.e., Saturday, i.e., April 16, they were not produced. We also indicated to the counsel that non-production may lead us to draw an adverse inference. Having given our anxious and careful consideration and thought to the respective contentions, we are of a considered view that the argument of Sri Salve, though attractive, does not commend itself for acceptance. Sales tax law is intended to tax sale or supply of different commercial commodities and not to tax the production or manufacture of particular substance out of which the commodities may have been made. As soon as separate commercial commodity comes into existence or emerges from the production or manufacture, it becomes a separately taxable entity or goods for the purpose of sales tax. When commercial goods without change of their identity as such goods are merely subjected to some processing or finishing or are merely joined together, they remain commercially known as same goods, cannot be taxed again in a series of sales, so long as they retain their identity as goods of a particular original type. In Ganesh Tradi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss" includes "glass mirror" or glassware in the Schedule of the Excise Act. This Court applied the functional test and held that the original glass sheet, as a result of the process through which it undergoes a complete transformation when it emerges as a glass mirror, is completely different from the original glass sheet. It was, therefore, held that a glass mirror cannot be regarded as a glassware. In Deputy Commissioner of Sales Tax v. Coco Fibres [1991] 80 STC 249, the question was whether coconut fibre is a separate entity from the coconut husk. This Court laid the test thus: "the essential point to remember is whether something is brought into existence which is different from that originally existing, in the sense that the thing produced is by itself a commercial commodity and is capable as such of being sold or supplied. It is not necessary that the stuff or the material of the original article must lose its character or identity or it should become transformed in its basic and essential properties". The test is whether the article which comes into being is commercially different from the one from which it is made or manufactured. In that case it was held that coconut fib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court said that in interpreting the meaning of an entry acceptance by the trade and popular meaning should commend itself to the authority. How the people in the trade and commerce understand the meaning in the course of trade is relevant. When an article is classified and put under a particular entry it is not appropriate for the court to question it. In Porritts & Spencer (Asia) Ltd. v. State of Haryana [1978] 42 STC 433; [1979] 1 SCR 545, the entry "textiles" for the purpose of the Punjab General Sales Tax Act, 1948, in item 30 of Schedule "B", whether "dryer felts" are textiles. In the context whether they are exempt from sales tax, this Court considered the scope of textiles and held at page 437 of STC; page 549 F and G of SCR that textiles need not be of any particular size or strength or weight. It may be in small pieces or in big rolls. It may be weak or strong, light or heavy, bleached or dyed, according to the requirement of the purchaser. The use to which it may be put is also immaterial and does not bear on its character as a textile. This Court in Hindustan Aluminium Corporation Ltd. [1981] 48 STC 411 considered this ratio and held that the ratio therein would not ..... 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