9911796707
TMI Blog1986 (12) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... ashed cotton seed oil and convert it into refined cotton seed oil. 2.. The controversy centres around the question whether the petitioner unit could be termed as "edible oil unit" within the meaning of section 2(12A) of the Bombay Sales Tax Act, 1959, as far as the activity of the petitioners of procuring washed cotton seed oil and converting it into refined cotton seed oil is concerned. The relevant section which falls for interpretation is as follows: "2. (12A) 'Edible oil unit' means an eligible unit engaged in- (i) delinting, decorticating or processing of groundnuts or other oil seeds; (ii) crushing of groundnuts or other oil seeds and manufacture of edible oil; (iii) refining of edible oil; or (iv) hydrogenation of edibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is refined cotton seed oil. Further, by his order dated 30th May, 1986, the Deputy Commissioner of Sales Tax, Nagpur Division, Nagpur, held that since the finished product and the commodity after refining is a completely new one and for a different commercial purpose, the petitioners are manufacturing edible refined cotton seed oil, and, therefore, the petitioners' unit falls under the category 2(12A)(ii) and (iii) of the Bombay Sales Tax Act, i.e., "refining and producing of edible oil " and it is in that event that the unit will have to be made assessable to sales tax even for production of such refined cotton seed oil. It is this order at annexure G which is impugned by the petitioners in this petition. 4. Shri V.R. Manohar, Advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble and is liable to be quashed. He also pointed out that, in that event, the petitioners' unit cannot be termed as "edible oil unit" when it deals with the activity of merely refining the washed cotton seed oil into refined cotton seed oil, and the petitioners' unit for that activity would be exempted from sales tax as per the scheme for which the petitioners had started the said unit sometime during 1979-83. Further, the petitioners would be entitled to the time-bound exemption provided under the Bombay Sales Tax Act for the agreed period. 5.. On the other hand, the learned Government Pleader, Shri M.A. Garud, supported the impugned order and contended that since the product which is manufactured in the petitioners' unit is an edible oi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said unit would be squarely covered under section 2(12A)(ii) of the said Act and would be liable for sales tax on that product. In so far as the petitioners' unit dealing with the activity of refining washed cotton seed oil into refined cotton seed oil is concerned, the question that arises is whether this activity would be covered by the definition of "edible oil unit". A close look at section 2(12A), item (ii) and (iii), would show that what is required is either "crushing of groundnuts or other oil seeds and manufacture of edible oil" or "refining of edible oil". That means to come within item No. (ii), both the activities of crushing of nuts or oil seeds and manufacture of edible oil will have to be carried out in continuation means t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion means the same oil received by crushing will be refined then the said unit will be covered by that item, i.e., "edible oil unit". 10.. We have to then find out whether the petitioners' unit is covered by item No. (iii) of section 2(12A) of the Bombay Sales Tax Act. It is an admitted position, even as per the statement in the impugned order, that the petitioners purchase their raw materials, i.e., washed cotton seed oil, and then refine it into the refined cotton seed oil in their unit. Washed cotton seed oil has been held to be a non-edible oil as per the order of the Commissioner of Sales Tax, Bombay (annexure E). It is, therefore, obvious that the petitioners' unit is not refining edible oil, but non-edible oil and in that case al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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