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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 ..... at of the Deputy Commissioner and Commercial Tax Officer and Sales Tax Appellate Tribunal are confirmed. - Civil Appeal No. 389 of 1988, 1620 of 1990, - - - Dated:- 26-4-1994 - RAMASWAMY K. AND VENKATACHALA N. JJ. H.N. Salve, Senior Advocate (Mrs. A.K. Verma, Advocate of J.B. Dadachanji Co., with him), for the respondents. C. Sitaramiah, Senior Advocate (T.V.S.N. Chari, Nikhil Nayyar and Ms. Promila Choudhary, Advocates, with him), for the appellants. -------------------------------------------------- The judgment of the Court was delivered by K. RAMASWAMY, J. -A common question of law relating to assessment of two assessment years, namely, 1977-78 and 1982-83 made under the Andhra Pradesh General Sales Tax Act (6 of 1957) (for short "the Act") and the Central Sales Tax Act, 1956 (for short "the CST Act") arises for decision. The respondent having its factory at Kurnool in Andhra Pradesh is a dealer under the Act, in groundnut, deoiled cake, edible protein flour and other products. After decortication and passing through expellers of the groundnut seeds, groundnut oil and groundnut oil cakes are obtained. The groundnut oil cake again is subjected to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... groundnut oil cake again is pressed through the solvent in which "food hexane" is sprayed resultantly groundnut oil and groundnut deoiled cakes are obtained. The deoiled groundnut cake again is granuled by grinding and is subjected to heat and steam treatment under controlled and regulated condition to ensure removal of solvent and brought into a uniform composition. Colouring or flavouring agents are added to this flour which is named as groundnut protein flour. This is edible flour fit for human consumption. The groundnut cake and deoiled cake are of animal feed. This will be apparent from the order which regulates not only of the production but also sale by licence and the products should conform to the standards prescribed in the respective Schedules. Rule 2(b) defines "deoiled meal" (instead of naming as cake) to mean the residual material left over when oil is extracted by a solvent from any oil-bearing material while "edible flour" is defined in rule 2(c) to mean the ground material prepared from deoiled meal which is derived from oil cake obtained either by single pressing of good quality edible oilseeds or as a result of direct extraction of oil from such oilseeds. Rule 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent, on the other hand contended that generic entry "deoiled cake" is exigible to tax under entry 29, be it edible or non-edible meant for human consumption or animal feed, so long as it conforms to the generic descriptive entry. It bears no relevance whether it is used for human consumption or animal feed. In other words, the user test in the commercial parlance, bears little relevance. The process of extracting groundnut oil cake from expeller and by solvent process removal of the oil and to make the deoiled cake in big size and thereafter making it into small cakes; the small cake granuled into pieces down the steam, is a continuous process and the commodity remained the same without indicating any separate process. Therefore, groundnut protein flour whether is oiled or deoiled, whether in bulk or small pieces, whether granuled or remained in small pieces make no difference for exigibility to tax. He gave the illustrations of breweries, textiles, petrochemicals and glassware as examples. To appreciate the contentions pragmatically we called upon the assessee to produce the samples of deoiled cakes and groundnut protein flour and gave time till Thursday, i.e., April 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flour, maida and suji derived from wheat are not wheat within the meaning of section 14 of the CST Act, held that flour, maida and suji are different and distinct goods from wheat. In other words, flour, maida and suji are not declared goods. Though flour, maida and suji are derived from wheat they are not wheat. In Hindustan Aluminium Corporation Ltd. v. State of Uttar Pradesh [1981] 48 STC 411, this Court was to consider whether metal takes within its ambit the fabricated forms of metal "all kinds of metals" including minerals, ores, metals, alloys and sheets. This Court held that metal was used under section 3A(2) of the U.P. Sales Tax Act, 1948, in its primary sense, i.e., in the form in which it is marketable as the primary commodity and that the primary form and the forms fabricated from the primary form constitute two distinct commodities marketable as such and must be regarded as different commercial commodities. In Atul Glass Industries P. Ltd. v. Collector of Central Excise [1986] 63 STC 322, the entry in the Schedule to the Excise Act came up for consideration. The question was whether "glass" includes "glass mirror" or glassware in the Schedule of the Excise Act. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of meanings. There may be manufacture of a complicated object like the super-constellation, or there might be manufacture of a simple object like a toy kite.......... When they are broken into metal or gitti there is some process, manual though it may be, for the purpose of shaping the stones into another marketable commodity. Accordingly it was held that stone making is a new article exigible to sales tax. In Dunlop India Ltd. v. Union of India [1976] 2 SCR 98 this Court, dealing with levy of customs duty on "U.P. latex", was called upon to consider the classification of the goods for the purpose of levy of customs duty, whether "raw rubber". U.P. latex was an essential component to manufacture tyres. This Court held that it is not for the court to consider under which item a particular item falls but it be left to the authorities to consider it. The condition of an article is a material factor for classification. In that context this Court pointed out that the test of "end use" is irrelevant. Far from helping the assessee it is consistent with the view this Court expressed in the aforestated cases. This Court said that in interpreting the meaning of an entry acceptance by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been a process of transformation of such a nature and extent as to have resulted in the production of a new article as commodity understood in the market where it is dealt with". When these tests have been satisfied, the court held that the commodity was exigible to sales tax. If the commodity did not result in a new article, the nature, duration and transformation of the original commodity would be immaterial. In Telangana Steel's case [1994] 93 STC 187 this Court did not decide the question whether iron wires are separate commercial goods from wire rods from which they were produced, but however concluded that the notification did not allow taxing of the same commodity at a series of sales but only at a single point for sales tax. In that view this court held that the levy of sales tax at more than one stage on same goods was illegal. It is true that the analyst report in this appeal does indicate that both deoiled cake and groundnut protein flour contain common properties but the use and purpose being different and distinct, they cannot be considered to be the same commodity. The groundnut protein flour is an edible protein food for human consumption and is a different com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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