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TMI Blog1984 (12) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... iods as per annexures E and F. The Deputy Commissioner on a perusal of the revision orders dated 10th June, 1975, in the two assessees' cases, passed by his predecessor, has sought to revise the same and to bring their purchase turnover in paddy to tax under section 6 of the Act, for the two periods in question. By order dated 10th June, 1975, the Deputy Commissioner had set aside and cancelled the orders passed by the assessing authority in so far as the levy of tax on purchase turnover in paddy was concerned, for the two periods. The Deputy Commissioner, in the said order, while exempting the purchase turnover of paddy, had observed as follows: "I am convinced that the converting of paddy into rice is not a process of manufacture. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsumption of paddy in the manufacture of other goods for sale or otherwise; (2) that the word 'dispose' involves an element of transfer of title in goods. Dehusking of paddy by itself cannot amount to disposal as there is no transfer of the paddy as such to anyone else and, therefore, it cannot be said that there has been disposal of the goods in any manner other than by way of sale; (3) that in regard to the rice got out of the paddy milled the assessees had been subjected to sales tax on the sales turnover of rice and the levy in regard to paddy or rice was at a single point. Therefore, the same transaction could not be subjected to tax both at the purchase point as well as the sale point; (4) that, therefore, the assessees were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner to withdraw the exemption granted earlier by his predecessor following the case of Raghurama Shetty [1975] 35 STC 360, are valid in law and the Deputy Commissioner had jurisdiction to revise the same for the reasons stated by him in the said notices. Shri Indrakumar appearing for the assessees has strenuously contended that notwithstanding the decision of the Supreme Court in Babu Ram Jagdish Kumar's case [1979] 44 STC 159 (SC), the Deputy Commissioner had no jurisdiction to issue notices proposing to revise the assessments for the reasons stated in the said notices. His contention is that the ruling that rice and paddy are different things in the ordinary parlance, was not laid down by the Supreme Court for the first time, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th effect from 15th January, 1968. The Supreme Court rejected the contention of the assessee and upheld the power of the State Government in amending Schedule C to the Act, as stated above. The second question related to the claim of the assessee for deduction from the gross turnover relating to the sale of paddy effected in his favour notwithstanding the inclusion of paddy in Schedule C to the Act. On the first question, however, the Supreme Court upheld the delegation in favour of the State Government to include both paddy and rice in Schedule C to the Act. So far as the second question was concerned, it was contended before the Supreme Court that paddy and rice were not different kinds of goods but one and the same and that therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of imposition of sales tax. It was urged by the appellants that merely because paddy was dehusked and rice produced, there was no change in the identity of goods. Hegde, J., speaking for the Bench and rejecting the contention of the appellants observed, "that the meanings of the word 'paddy' and 'rice' should be understood in common parlance, specially in commercial circles and held that the two are different things". It was, however, contended by Shri Indrakumar that the Supreme Court decision in Babu Ram Jagdish Kumar's case [1979] 44 STC 159 (SC) cannot be relied upon for initiating proceedings to revise the orders of the Deputy Commissioner for the two years in question. It is contended on behalf of the State by Shri Rajen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1979] 44 STC 159 (SC). The Supreme Court held, in reversing the decision of the Karnataka High Court, that the assessee (Raghurama Shetty) consumed the paddy purchased by him when he converted the paddy into rice and was therefore, liable to pay tax on his purchase turnover in paddy from agriculturists, which otherwise would be exempt under the Act. It was also held by the Supreme Court that the assessee would not be exposed to double taxation both as buyer of paddy and as seller of rice since paddy and rice are to be treated as different commodities liable to tax at single point. It may be relevant to notice that the Supreme Court while reversing the decision of this Court observed that "it is unfortunate that the High Court as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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