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TMI Blog1963 (4) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... ated as having been omitted from the accounts. Its appeal to the Appellate Assistant Commissioner failed. On further appeal to the Tribunal, the contention was advanced that the sale of sugar was totally exempt from tax during the year of assessment and that this exemption accorded to sugar must necessarily extend to sugar candy in which the assessee dealt. In support of this contention, reliance was placed upon a notification issued by the Government and it was claimed that sugar candy is essentially nothing more than sugar, the only difference between the two being that one was of the crystalline structure and the other was practically in powder form. The Tribunal took the view that while the sale of sugar was liable to be exempted from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions specified in section 15 of the Central Sales Tax Act, 1956. In the Second Schedule the mode of distribution of the net proceeds of the excise duty was set out. The payment to any State was however made dependent upon the following condition: "Provided that if during that financial year there is levied and collected in any State specified in the Table a tax on the sale or purchase of sugar by or under any law of that State, no sums shall be payable to that State under sub-clause (ii) or sub-clause (iii) of clause (b) in respect of that financial year, unless the Central Government by special order otherwise directs." It follows from the above that before a State could become eligible for its quota of distribution of the net proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f which is sugar. This exemption was however to be granted only if in respect of such goods "an additional excise duty has already been levied under the provisions of the Additional Duties of Excise Levy and Distribution Bill, 1957, introduced in the Parliament on the 13th December, 1957". In both of these exemption notifications, the goods in question is described as sugar. Mr. Ramagopal, learned counsel for the assessee, points out that this exemption which was granted by the State Government from the operation of the General Sales Tax Act in respect of sugar was the result of the Additional Duties of Excise Act, which made it imperative that the State Government should grant the exemption from the local sales tax law, if the State was to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation relating to the Sugar Movement Contral Order was relied upon, wherein sugar was defined as any form of sugar containing more than 90 per cent. of sucrose, including khandsari sugar, sugar candy and bura sugar and any sugar of crystalline structure. Sugar candy was specifically mentioned in that Control Order, but the Tribunal held that the definition was for the specific and limited purpose relating to movement of sugar from one State to another and would not make sugar candy synonymous with sugar for purposes of the exemption notification under the General Sales Tax Act. The question we have to consider now is whether having regard to the several provisions to which we have made reference, it is proper to hold that sugar candy was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the Mysore High Court in Abdul Malik and Co. v. Commercial Tax Officer[1963] 14 S.T.C. 214. The petitioner in that case was a firm manufacturing sugar candy. By entry 34 in the Second Schedule to the Mysore Sales Tax Act, sugar was taxable. By an amended entry 31-B of the Fifth Schedule, sugar candy was taken out of the category of sugar, which was exempted from tax. Sugar was one of the goods subject to the sales tax under the Mysore Act as item 34 in the Second Schedule. There was no separate entry relating to sugar candy under any of the Schedules to that Act. After the passing of the Central Act 58 of 1957, that is, the Additional Duties of Excise Act, the State Legislature enacted the Mysore Sales Tax Amendment Act. A new sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . There is no basis for these contentions. Ordinarily 'sugar' includes 'sugar candy'. 'Sugar candy' is not separately dealt with in the Central Act 58 of 1957. Now coming to the legislative practice, in the Finance Act No. 13 of 1960, it is mentioned that 'sugar' means any form of sugar containing more than ninety per cent. of sucrose; the word 'sugar' means any form of sugar in which the sucrose content, if expressed as a percentage of the material dried to constant weight at 105' Centigrade, would be more than ninety. Hence I have to conclude that both 'sugar' and 'sugar candy' were the subject-matter of legislation in Central Act 58 of 1957........" We are in full agreement with the view taken by the Mysore High Court upon this question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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