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TMI Blog1980 (9) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... e-The United Coffee Supply Co. Ltd., Palghat is a dealer in raw coffee beans, roasted coffee beans, pure coffee powder, French coffee, etc. According to the assessee, the company had effected purchases of raw coffee beans in the State of Kerala, despatched those goods to its factory at Coimbatore where it was processed, and converted it into different varieties, such as roasted beans, pure coffee, and French coffee. The question arising before us concerns the exigibility to tax of the turnover pertaining to the sales effected by the assessee of the aforesaid products which are said to have been received by him from the factory at Coimbatore and sold from its depot in Palghat. 3.. In the proceedings for assessment to sales tax under the Kerala General Sales Tax Act (hereinafter called the Act) taken against the assessee by the Sales Tax Officer, Palghat, for the years 1969-70 to 1971-72 (covered by the first group), the assessee claimed exemption from tax in respect of the entirety of the turnover relating to the sale of the aforementioned products on the basis that the goods in question had already been subjected to tax in the State of Kerala at the stage of purchase of the raw c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntending that no tax could be levied even in respect of the chicory content of the French coffee sold by the company. In those appeals the Tribunal was also concerned with the limited question as to whether what had been sold by the assessee under the name "French coffee" was liable to be taxed treating the sales effected by the assessee as first sale within the State in respect of the said commodity. 5.. For the years 1972-73 to 1947-75 covered by the second group, the Sales Tax Officer brought to tax the entire sales turnover of the assessee relating to all the three varieties of the products received from the Coimbatore factory, namely, roasted coffee beans, pure coffee and French coffee, holding that there was no evidence before him to connect those goods with the raw coffee beans in respect of which tax had been levied within this State on the occasion of the purchase effected by the assessee. The Appellate Assistant Commissioner, before whom the matter was carried in appeal by the assessee, adopted in respect of these years also the view taken by him while disposing of the appeals pertaining to the first group that only the chicory content of French coffee sold by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Assistant Commissioner was justified in assuming that the product sold by the assessee as roasted beans, pure coffee and French coffee (for the yews covered by the first group this question will arise only in respect of French coffee, since the department had not filed any appeal against the decision of the Appellate Assistant Commissioner) had been actually made out of the raw coffee beans purchased by the assessee in the State of Kerala and despatched to Coimbatore, the Tribunal upheld the contention of the State that the evidence produced by the assessee was not sufficient to establish the identity of the goods so as to justify the conclusion that the goods in question had already been subjected to tax once in this State. The finding of the Appellate Assistant Commissioner that the right to exemption claimed had been proved, was therefore vacated by the Tribunal, but the Tribunal considered that the interest of justice required that the assessee should be given an opportunity to produce further evidence by way of stock books and other records to establish that the coffee products sold in Kerala had been made out of coffee seeds purchased within the State. In this view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing chicory powder, the two having been mixed together in the process of manufacture. In Deputy Commissioner of Commercial Taxes v. Iyanar Coffee and Tea Co.[1962] 13 S.T.C. 457. a Division Bench of the Madras High Court had occasion to consider whether the expression "coffee" occurring in section 5(v) of the Madras General Sales Tax Act, 1939, would include French coffee. The learned Judges held that French coffee made by admixture of coffee powder and chicory powder is not the same as "coffee" mentioned in section 5(v) of the Madras Act. We are in respectful agreement with the said view. Tested with reference to the common man's understanding of the expression "coffee" or even with reference to the use of the said expression in commercial parlance, "French coffee " cannot be regarded as coffee. It was urged before us by the counsel for the assessee that pure coffee as well as French coffee are both put to the same use. As pointed out by us in Deputy Commissioner v. Western India Plywoods (P.) Ltd.[1980] 46 S.T.C. 331; 1980 K.L.T. 592., the test of user is not a safe or conclusive guide. The question to be considered is whether the goods in question can be regarded as the same as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t *Prevention of Food Adulteration Rules, 1955. from "coffee" and that any tin or other receptacle containing such a mixture should carry the description "French coffee" or the words "mixed with chicory" or "blended with chicory". Under the law of this land sales of food articles can be effected only in conformity with the aforesaid provision. Hence, nobody asking for coffee in a shop can legally be supplied with French coffee or coffee mixed with chicory. 10.. Such being the position, we are unable to agree with the view expressed by the Tribunal that French coffee is the same as "coffee" covered by entry No. 37 of the First Schedule. Hence the sales of "French coffee" effected by the assessee have to be treated as first sales within the State and are exigible to tax. The contrary view expressed by the Tribunal will stand set aside. 11.. Notwithstanding the contention advanced by the Government Pleader that the Tribunal was not justified in extending an opportunity to the assessee to adduce further evidence on the question as to whether the products received by him from Coimbatore were actually made out of raw coffee beans purchased in Kerala by the assessee, we do not fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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