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TMI Blog2001 (4) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Supreme Court reported in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Thomas Stephen Co. Ltd. [1988] 69 STC 320 and that of the Madras High Court reported in State of Tamil Nadu v. Arcot Cans [1993] 88 STC 285. 3.. This order was revised by the Joint Commissioner in the suo motu revision, by holding that levy of tax under section 7A of the Tamil Nadu General Sales Tax Act is contemplated under the Tamil Nadu General Sales Tax Act, 1959, even if the goods are used in the manufacture of paper boards, inasmuch as the manufacturing process warrants the use of coconut shell and groundnut shell also as fuel. The Joint Commissioner relied on the ratio of the decision of the Supreme Court reported in State of Tamil Nadu v. M.K. Kandaswami [1975] 36 STC 191 and also the ratio of the decision of the Andhra Pradesh High Court reported in Sri Ram Khandsari Sugar Mills v. State of Andhra Pradesh [1988] 71 STC 392. Hence, the present appeals. 4.. Mr. V. Sundareswaran, learned counsel for the appellants, contended that the present case is identical to the issue considered by the Supreme Court in the case reported in [1988] 69 STC 320 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable, if the goods have been purchased without sufferance of tax at the earlier stage. As held in Manickam and Co. v. State of Tamil Nadu [1977] 39 STC 12 by the apex Court, the subsequent legislation may be looked into to see proper construction to be put upon the earlier Act. This Special Tribunal has also in T.C. (R) Nos. 3041 of 1997 and 2929 of 1997 dated August 20, 1999* referred to the subsequent amendment to consider the classification of the commodity, "hoists" with reference to the earlier classification of the commodity, "lifts". Unless there is a transfer of the goods in the manufactured product, the levy of purchase tax is not in order, as held in the decisions reported in State of Tamil Nadu v. Arcot Cans [1993] 88 STC 285 (Mad.), P.C. Balaramaraja v. State of Tamil Nadu [1994] 94 STC 212 (Mad.) and State of Tamil Nadu v. P.C. Balaramaraja [1992] 85 STC FRSC 5. Unless there is a transfer of goods relating to the raw materials in some other form, there is no case to levy purchase tax and in any event, the goods used as fuel cannot attract purchase tax, as clearly held by the Supreme Court in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e find that the contentions of the petitioner have no force at all, in view of the categorical decision of the Constitution Bench of the Supreme Court in the decision reported in Assistant Commissioner (Intelligence) v. Nandanam Construction Company [1999] 115 STC 427. In fact, in that case, the learned counsel for the respondent/assessee submitted that the view taken in Pio Food Packers case reported in [1980] 46 STC 63 (SC), which was followed in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Thomas Stephen Co. Ltd. [1988] 69 STC 320 (SC), must be accepted and that at any rate, if two views are possible, the assessee should get the benefit of doubt and tax ought not to be imposed. The Supreme Court, on considering the submission, categorically overruled the view expressed in Pio Food Packers case [1980] 46 STC 63 (SC), which was followed in the decision reported in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Thomas Stephen Co. Ltd. [1988] 69 STC 320 (SC). The Supreme Court approved the earlier decision of the Supreme Court in the case of Ganesh Prasad Dixit reported in [1969] 24 STC 343 (SC). The relevant port ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that tax will be attracted when such goods are consumed in the manufacture of other goods or are consumed otherwise. Therefore, while agreeing with the view in Ganesh Prasad Dixit [1969] 24 STC 343 (SC); [1969] 3 SCR 490, on this aspect, we overrule to this extent the view expressed in Pio Food Packers [1980] 46 STC 63 (SC); [1980] 3 SCR 1271." 8.. The case reported in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Pio Food Packers [1980] 46 STC 63 (SC) related to pineapple sliced for being sold in sealed cans. It was held that there was no consumption of the original pineapple fruit for the manufacture of sliced pineapple, by removing the ineligible portion. It was contended by the learned counsel for the Revenue that even if no manufacturing process was involved, still the case would fall under section 5A(1)(a) of the Kerala General Sales Tax Act, 1963 because the statutory provision speaks not only of goods consumed in the manufacture of other goods for sale, but also goods consumed otherwise. This submission was rejected by the Supreme Court by observing as follows: "The clause, truly read, speaks of goods consumed in the manufacture of othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vance to the present facts of the case. Further this very contention was negatived, though without reference to Ganesh Prasad's case [1969] 24 STC 343 (SC); [1969] 3 SCR 490 in the passage set out hereinbefore in Deputy Commissioner of Sales Tax v. Pio Food Packers [1980] 46 STC 63 (SC). The expression consumption otherwise must in the context mean consumption of other goods for purposes other than sale." 12.. Thus, it is quite clear that the apex Court in the decision reported in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Thomas Stephen Co. Ltd. [1988] 69 STC 320, categorically held that the expression "consumption otherwise" must in the context mean consumption of other goods for purposes other than sale. In arriving at this decision, the apex Court followed the earlier decision of the Supreme Court in Pio Food Packers case reported in [1980] 46 STC 63. 13.. In the decision reported in [1999] 115 STC 427 (SC) in the case of Nandanam Construction Co., this decision in Pio Food Packers [1980] 46 STC 63 (SC) relating to the expression "consumption otherwise" which was followed in the decision reported in Deputy Commissioner of Sales Tax (Law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to such sale." 17.. It was contended that the natural gas is a consumable within the meaning of the aforesaid provision and therefore, entitled to the concessional rate of tax. Only in that context, the Supreme Court observed as follows and referred to the earlier decision in the case of Thomas Stephen Co. reported in [1988] 69 STC 320 (SC) as indicated below: "The word 'consumables' in the said provision takes colour from and must be read in the light of the words that are its neighbours, namely, 'raw material', 'component part', 'sub-assembly part' and 'intermediate part': So read it is clear that the word 'consumables' therein refers only to material which is utilised as an input in the manufacturing process but is not identifiable in the final product by reason of the fact that it has got consumed therein. It is for this reason that 'consumables' have been expressly referred to in the said provision, though they would fall within the broader scope of the words 'raw material'. In the case of Thomas Stephen Co. Ltd. [1988] 69 STC 320 (SC) relied upon in the impugned judgment, it was held that cashew shells used as fuel did not get consumed in the manufacture of othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hole, suitable rephrasing of the section has been made." But, on the basis of the Sixth Amendment Act (Act No. 60 of 1997) alone, it cannot be said that levy of purchase tax on fuel could be levied only from April 1, 1996 inasmuch as in terms of the Supreme Court decision reported in Assistant Commissioner (Intelligence) v. Nandanam Construction Company [1999] 115 STC 427, the purchase tax could be levied even with reference to the earlier expression of "or otherwise" found in section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act, 1959. 21.. In this connection, it is relevant to refer to the decision of the Supreme Court in the case of Indian Aluminium Company Limited v. Assistant Commissioner of Commercial Taxes (Appeals) reported in [2001] 121 STC 510; JT 2001 (2) SC 66. Though this case related to levy of entry tax, still the principle in regard to Legislature intent is quite relevant to the present case before us. In that case, entry tax was levied on furnace oil with reference to entry 11 of the Karnataka Tax on Entry of Goods Act, 1979 pertaining to petroleum products, which reads as follows: "All petroleum products, that is to say, petrol, diesel, crude oil, lubric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se before us: "Coming to the notification of March 30, 1994, it is quite obvious that as on that day the judgment of the single Judge in Indian Aluminium Co.'s case held the field and as a result thereof the State was unable to impose entry tax on the import of furnace oil into the State. The only way by which this could have been done, pending the outcome of the letters Patent Appeal, was to make a specific provision which it did by the said notification of March 30, 1994. The entries being clear, the subsequent notification of March 30, 1994, cannot be invoked for the purpose of creating ambiguity where none exists." 25.. Thus, in the present case before us also, an amendment to section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act, was brought into effect retrospectively with effect from April 1, 1996 by the Amendment Act No. 60 of 1997, so as to overcome the situation that has arisen as a result of the decision of the Supreme Court reported in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Thomas Stephen Co. Ltd. [1988] 69 STC 320, which was followed by the other decisions of the High Courts. The note to the Amendment Act No. 60 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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