9911796707
TMI Blog1970 (8) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... at is to say, seeds yielding non-volatile oils used for human consumption, or in the manufacture of varnishes, soaps and the like, or in lubrication, and volatile oils used chiefly in medicines, perfumes, cosmetics and the like............." Entry (3) in Schedule 'C' to the Punjab General Sales Tax Act, 1948, reads as under: "Oil-seeds, (including groundnut) that is to say, seeds yielding nonvolatile oils used for human consumption, or in industry, or in the manufacture of varnishes, soaps and the like, or in lubrication, and volatile oils used chiefly in medicines, perfumes, cosmetics and the like." Schedule 'C' to the Punjab Act enumerates the goods on which purchase tax and not the sales tax is leviable, so that, if cotton seeds are held to be oil-seeds, they will be subject to the levy of purchase tax on their purchase price and not sales tax on the sale price. On behalf of the petitioners, it has been vehemently argued that cotton seeds are oil-seeds as oil is extracted from cotton seeds on a commercial scale which is used in the manufacture of vanaspati meant for human consumption. Reliance is placed on the following paragraph in Encyclopedia Britannica, Volume 6, 1969 Ed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia and Another v. Delhi Cloth and General Mills Co. Ltd.(1), wherein it is stated in para. 5 of the report as under: "The experts who have filed affidavits in support of the petitioners' case agree with Mr. Krishnan that common oils, like groundnut, sesame, mustard, cotton seed, etc., in their raw stage always contain varying amounts of impurities and these impurities have to be removed by different processes before hydrogenation for the purpose of producing vanaspati can be applied." The learned counsel argues that cotton seed oil has been mentioned in this paragraph as one of the common oils used for the purpose of producing (1) A.I.R. 1963 S.C. 791. vanaspati. In para. 10 of the report, an extract is given from Bailey's book on "Cotton seed and cotton seed products" reading as under: "In a discussion of the composition and characteristics of cotton seed oil, three kinds of oil are to be distinguished. They are: (a) crude oil, which is the oil as it is expressed from the seed, and the commodity shipped from the oil mills, (b) refined oil, or oil which has been freed of most of its non-glyceride constituents by treatment with alkali, with or without subsequent bleaching or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared goods. In the judgment of their Lordships entries (1) and (3) from Schedule 'C' to the Punjab Act have been set out, but not clause (vi) of section 14 of the Central Act, nor was it brought to their Lordships' notice that oil-seeds are declared goods under section 14(vi) of the Central Act. The point that was canvassed before their Lordships was that cotton seeds were not different from cotton and the dealer was entitled to deduct the sale price of the cotton seeds from the purchase turnover under section 5(2)(a)(vi) of the Punjab Act. In that case, the dealer purchased unginned cotton and by a process of manufacture separated the seeds from the cotton and sold ginned cotton to the customers. It was submitted on behalf of the manufacturer that he had paid tax on the purchase of unginned cotton which underwent a process of manufacture resulting into two products, that is, ginned cotton and cotton seeds. He should, therefore, be deemed to have paid tax on the purchase of cotton seeds and when he sold cotton seeds, he should have been allowed the deduction of that turnover from his purchase turnover. This submission was repelled by their Lordships with the following observations: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no doubt that entry (3) from Schedule 'C' to the Punjab Act was set out but no reference was made to it in the judgment nor was it considered relevant to decide whether cotton seeds were declared goods. I may emphasise that their Lordships considered cotton seed in relation to cotton and not in relation to oil-seeds for observing that "it is difficult to accept the contention that the sale of cotton seeds must be treated as a sale of declared goods for the purpose of section 15(a) or (b) of the Central Sales Tax Act, 1956." Their Lordships further observed: "There is hence no warrant for the contention that cotton seed is not different from cotton." That judgment, therefore in my opinion, does not lead to the conclusion that their Lordships decided that cotton seeds were not oil-seeds, as defined in entry (3) in Schedule 'C' to the Punjab Act or clause (vi) of section 14 of the Central Act. On behalf of the respondent, reliance has been placed on a judgment of Shamsher Bahadur, J., in Hans Raj Choudhri v. J.S. Rajyana, Excise and Taxation Officer[1967] 19 S.T.C. 489., in which the learned Judge held that groundnuts could not be treated as oil-seeds to justify the impositi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
