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TMI Blog1962 (4) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the ghee purchased by them cannot be subject to sales tax as it amounts to double taxation of the same goods. In other words, the petitioners' case is that ghee is only butter clarified to resemble oil, and is prepared by a process of heating butter without altering or changing the butter in substance or quality, The Government of Andhra Pradesh by a Notification G.O. Ms. No. 566, Revenue, dated 11th March, 1960, (hereinafter called "the Notification") issued under section 41 of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter called "the Act"), directed the following item and the entry to be added to Schedule III of that Act, viz.,: "12. Butter and ghee, at the point of purchase by the last dealer who buys in the State-4 naye Paise in the rupee." The said notification was made to come into force with effect from 1st April, 1960. It is contended that in and by means of this Notification both butter and ghee are subject to levy of purchase tax from the last purchaser of each of those goods, and that has the effect of double taxation, or taxing the same goods twice over, which is repugnant to the scheme of the Act, and opposed to law. The demand of tax from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of which a single point sales tax only is leviable), and (5) all dealers in goods specified in Schedule III (i.e., goods in respect of which a single point purchase tax only is leviable) irrespective of the turnover in cases falling under (2) to (5) shall be liable to tax. Sub-section (4) provides that the turnover on which a dealer shall be liable to pay tax shall be determined after making such deductions from his total turnover in the manner prescribed. Sub-section (5) lays down that the taxes shall be assessed, levied and collected in the manner prescribed, and then follows the proviso, which is material for the purpose of this case. It is as follows: "Provided that- (i) in respect of the same transaction, the buyer or the seller, but not both, as determined by such rules as may be prescribed, shall be taxed; (ii) where a dealer has been taxed in-respect of the purchase of any goods, in accordance with the rules referred to in clause (i) of this proviso, he shall not be taxed again in respect of any sale of such goods effected by him." The effect of this proviso may be stated thus. In respect of one and the same transaction, either the buyer or the seller, but not both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject of section 5(5) of the Act is not to tax a transaction twice, but that did not imply a prohibition against the levy of tax on the products of the same commodity, and held that groundnut oil or cake would not answer the description of the same goods as groundnut within the enacting words of section 5(5) and followed the decision in Chandramouleswara Oil Company, In re [1954] 5 S.T.C. 340. They cited with approval Kayani and Company v. Commissioner of Sales Tax[1953] 4 S.T.C. 387; A.I.R. 1953 Hyd. 252. , where it was held that rice could not be interpreted as meaning "cooked rice." Reliance was also placed on Kosuri Subba Raju v. State of Andhra[1956] 7 S.T.C. 479., where it was held that nawar tape (material woven in bands and used as mat for cots) could not be regarded as cloth within the definition of "cloth" under section 5(iii) of the Madras General Sales Tax Act, 1939. They also relied on Pithapuram Taluk Tobacco, Cigars and Soda Merchants' Union v. State of Andhra Pradesh[1958] 9 S.T.C. 723., where it was ruled that country tobacco which was subject to levy of sales tax at a single purchase point did not include cigars and cheroots; though produced from the same tobacco, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any sale of such goods. It is, no doubt, true that the dealer as purchaser of cotton pays the tax on cotton at the purchase point under Schedule IV, item 5. But the goods taxed on the sale point is cotton seed under item 23 of Schedule II. As observed in the above case (Pithapuram Taluk Tobacco, Cigars and Soda Merchants' Union v. The State of Andhra Pradesh[1958] 9 S.T.C. 723.): 'The policy of taxation is more appropriately the province of the statesmen and of the Legislature rather than of the lawyer or the Courts. It is a public policy dependent not only upon the necessities of administration but also implementation of the scheme to serve the public needs'." We held in that case that cotton seeds cannot be said to be the same goods as cotton. Following these cases we hold that butter and ghee, which are mentioned in the notification as two different commodities, cannot be said to be the same goods. In support of his contention that butter and ghee are identical goods, Sri Somasundaram relied on the meaning of these words given in Encyclopaedia Britannica. In Volume 4, 1958 Edition, at page 468, the meaning of "butter" is as follows: "As the term is used most commonly, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an article of food, ghee may be an equally good substitute for butter. Whatever it may be, when the Legislature has treated these two as two different articles in the notification for the purpose of taxation, it is not the province of Courts to question the policy of the Legislature underlying it. Reliance was also placed on behalf of the petitioners on the recent decision of the Supreme Court in Tungabhadra Industries Limited, Kurnool v. Commercial Tax Officer, Kurnool[1960] 11 S.T.C. 827; A.I.R. 1961 S.C. 412. In that case, the assessee claimed deduction under rule 18(2) of the Madras General Sales Tax (Turnover and Assessment) Rules, on groundnut, and/or kernel purchased by him and converted into refined oil, or hydrogenated oil. As the raw groundnut oil is converted into refined oil, the processing consisted merely in removing from raw groundnut oil that constituent part of the raw oil which is not really oil, but consisted of free fatty acids, phospotides and unsaponifiable matter, and after the removal of that non-oleic matter the oil continues to be groundnut oil, and nothing more. In other words, the processing consisted in the non-oily content of the raw oil being separa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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