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TMI Blog1990 (7) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... rought into the purview of the West Bengal Sales Tax Act, 1954, by Notification No. 885-F.T. dated May 1, 1955, issued under section 25 of the said Act. The relevant entries in the notification are extracted below: "Black and white pepper, known locally as gol marich, that is to say, the berry of the plant 'piper nigrum', whole, broken, ground or powdered, or of any other form or description whatsoever;" "Turmeric, known locally as haridra or halud, that is to say, the product obtained from the plant 'curcuma longa', whole, broken, ground or powdered or of any other form or description whatsoever." We are narrating only so much of the case of the applicants as has been urged at the time of hearing and as may be necessary for our decision: 4.. The applicants' case is that they purchased turmeric and black pepper in whole form from the local market on payment of due sales tax, crushed the same into powder and then sold the powdered articles without collecting sales tax at the time of sale. Their prayer for grant of a certificate of registration under the 1954 Act made on December 13, 1974, was rejected ex parts on February 7, 1976. It was, however, held by the Commercial Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm and sale thereof after affixing the label of the applicants do not involve any processing, since these commodities have been notified under the 1954 Act in both whole and powder forms. When whole turmeric and whole black pepper are converted into powder, allegedly it cannot be said that a different commodity is produced by way of processing. The scheme of the 1954 Act being to impose tax on the first point of sale, tax cannot be levied on multiple points or on the last point of sale. 5.. The case of the respondents is that the applicants are dealers under section 2(b) of the 1954 Act, as they sell turmeric and black pepper after converting the same into powder form. Accordingly, they are liable to pay tax on sales of such commodities. The applicants, it is alleged, are not simply resellers. They are manufacturers, makers or processors of turmeric and black pepper in powder form. Conversion of whole commodities into powder form is said to be an act of processing. 6.. Although several points were taken in the writ application, at the time of hearing Mr. P. Basu, learned Advocate appearing for the applicants, canvassed only two points, namely, (a) Turmeric and black pepper h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 1954 Act in order to find out its scheme, there is a need to evaluate the assertion of fact made in paragraphs 20 and 28 and elsewhere in the application that the same commodities in whole form had been subjected to sales tax at the time of purchase by the applicants. Respondents dealt with the aforesaid assertion in paragraph 16 of their affidavit-in-opposition, denying the submissions and allegations made in a number of paragraphs of the application including paragraphs 20 and 28. Even though the applicants made various annexures to the writ application, no cash memo, voucher or any other document was annexed thereto, nor produced at the hearing, showing that sales tax was charged by the local sellers at the time of sales made to the applicants. It is common ground and there is no controversy that the provisions of the 1954 Act authorise levy of tax on sales of turmeric and black pepper in the whole and unprocessed, unmade or unmanufactured form, only when those are imported into West Bengal from outside the State for the purpose of sale. The statements made in paragraphs 17, 19, 20 and 28 of the writ application and the oral submissions made on behalf of the applicants at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g dealer directly in manufacturing, making, processing or packing in West Bengal for sale in West Bengal shall be taxable at the rate of one per centum on the turnover. The rate was increased to two per centum with effect from October 1, 1982. So, during the disputed period the rate was only one per centum on the turnover. In terms of the proviso to section 23A, the selling dealer must furnish a declaration filled up and signed by the purchasing dealer in order to avail of the concessional rate. 11. Upon a consideration of the aforesaid provisions of the 1954 Act, the scheme of the Act till April 7, 1975, appears to be that there would be sales tax at the first point of sale, where notified commodities are brought into West Bengal from outside the State for the purpose of sale in West Bengal and where notified commodities are. sold in West Bengal after manufacturing, making or processing the same. It may be to an extent misleading to say in a sweeping manner that the Act imposes a single point tax and no tax is payable on a second point of sale. True, a reseller simpliciter does not appear to be envisaged as a dealer and, therefore, he is not liable to pay sales tax. But, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to these terms in any decision having the value of a precedent, binding or persuasive. Black's Law Dictionary, 5th Edition, defined the word "process" as "continuous operation, mode or operation, whereby a result or effect is produced", and .......... "mode, method or operation whereby a result is produced; and means to prepare for market or to convert into marketable form". Some meanings given in K.J. Aiyar's Judicial Dictionary, 10th Edition, are reproduced below: "The expression 'who processes any goods' refers to the subjecting of any goods to a treatment or process" [Collector of Sales Tax v. Abdul Rehman Alladin [1963] 14 STC 803 (Guj); AIR 1964 Guj 27]. "Processing of goods. All that is required within the meaning of this expression is that the goods must be adapted for a particular use. The variety of acts performed in respect of goods or their subjection to a process need not be such as may lead to the production of any new article. The act of subjecting goods to a particular temperature for a long period of time, as in the cold storage amounts to processing of goods." [Additional Commissioner of Income-tax v. Farrukhabad Cold Storage (P.) Ltd. [1977] 107 ITR 816 (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and Chowgule Co. Pvt. Ltd. v. Union of India [1981] 47 STC 124 (SC). The decision in [1973] 77 CWN 382 (Cal) (Eastern Drug Co. Ltd. v. State of West Bengal) was rendered in the context of sections 2(g) and 6 of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. It was held that manufacture implies a change, but every change in the raw material is not manufacture. It must bring into being something known in the market according to its ordinary dictionary meaning. If in the process a thing ordinarily known in the market as a thing or a goods or a preparation is brought into being, the fact that it is an intermediate process in the ultimate preparation of some other medicinal product, would not also make any difference. Mr. Basu sought to apply the ratio of this case to the case before us. But, the facts and the ratio both are clearly distinguishable. In the present case, the point of discord is whether powdering amounts to processing. The question of manufacture is not at all involved here. The next case relied on by Mr. Basu is [1979] 44 STC 392 (SC); AIR 1980 SC 169 (Commissioner of Sales Tax v. D.S. Bist Sons). It was a case under the U.P. Sales Tax Act, 1948. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be processing. In the case of [1976] 37 STC 554 (Cal) (Sudhir Ch. Mukherjee v. Additional Commissioner of Commercial Taxes) the question involved was whether garlands and bouquets made from flowers amounted to manufacture of a new commodity. Naturally, the answer was in the negative. The question of manufacture is not relevant in the present case. The dispute is confined to mere processing. 15.. It was held in [1965] 16 STC 935 (Cal) (Sri Om Prakas Gupta v. Commissioner of Commercial Taxes) which was relied on behalf of the respondents, that the word "process" used in section 2(b) of the 1954 Act has been used in the general sense, requiring only continuous and regular action or succession of actions leading to the accomplishment of some result, but it is not one of the requisites that the activity should involve some operation on some material in order to its conversion to some other stuff. In the facts of that case, B.N. Banerjee, J., held that by converting camphor powder into camphor cubes, the petitioner processed camphor powder into camphor cubes and fell within the definition of "dealer" in the 1954 Act. This decision was confirmed in appeal by Anil Kumar Sen and M.N. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of Debi Prosad Pal, J., in [1973] 31 STC 628 (Cal) (Mahabirprasad Birhiwala v. State of West Bengal) was virtually per incuriam and that one does not become a processor, if he grinds whole turmeric into powder. We are in respectful agreement with D.P. Pal, J., in the case reported in [1973] 31 STC 628 (Cal) (Mahabirprasad Birhiwala v. State of West Bengal) and with respect we do not feel persuaded by the view taken in [1982] 51 STC 248 (Cal) (Rasoi Products v. Commercial Tax Officer). Our view finds support from [1965] 16 STC 935 (Cal) (Sri Om Prakas Gupta v. Commissioner of Commercial Taxes) and [1976] 38 STC 73 (Cal) (Om Prakash Gupta v. Commercial Tax Officer). Further, we feel bound by the ratio of the decision in [1981] 47 STC 124 (SC) (Chowgule Co. Pvt. Ltd. v. Union of India) rendered in the context of a similar expression in the Central Sales Tax Act. We are of the view that conversion of whole turmeric and whole black pepper into powdered form for the purpose of sale, as in the instant case, amounts to processing within the meaning of sections 2(b) and 23A(1) of the 1954 Act, that the applicants are dealers under section 2(b), and that sales of the said commodi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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