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TMI Blog2001 (10) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... of the First Schedule to the Act on the ground that they are second sales in the hands of the petitioner. The relevant turnovers are Rs. 9,16,046 and Rs. 3,58,341 during the assessment years 198485 and 198586 respectively. For the assess ment year 198586 the Commercial Tax Officer levied tax at 5 per cent of sales on firewood cases and plywood cases treating them as containers falling under entry No. 19 of the First Schedule to the Act. When the matter stood thus, the Deputy Commissioner (CT) acting under section 20 of the Act withdrew the exemption granted by the Commercial Tax Officer on second sales of planks and brought them to tax treating the sale of bale boards as packing material treating them as unclassified goods exigible to tax at every point of sale for both the assessment years 198485 and 198586. The Deputy Commissioner (CT) also revised the rate of tax for the assessment year 198586 on sales of wooden cases and plywood cases treating them as coming under items Nos. 145 and 91 of the First Schedule to the Act levying tax at 7 per cent and 9 per cent respectively. 3.. The petitioner being aggrieved by the orders of the Deputy Commissioner (CT), preferred appeals befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 63 or entry No. 145 of the First Schedule to the Act. 7.. On the other hand, learned Special Government Pleader for Taxes, while supporting the order of the learned Tribunal would, in the first place, maintain that production of bale boards involves manufacturing activity and, therefore, it should be treated as different goods from the goods which are used as raw materials in its manufacture and, therefore, they should be treated as unclassified goods and they are liable to be taxed accordingly. Alternatively, learned Special Government Pleader for Taxes would contend that even assuming that production of bale boards does not involve manu facture as such, the bale boards produced and sold by the petitioner are undoubtedly different from the goods, i.e., the wooden planks, which are used for the production of bale boards. In support of his contention, the learned Special Government Pleader for Taxes would place reliance on the judgments in Vijayalaxmi Cashew Company v. Deputy Commercial Tax Officer [1996] 100 STC 571 (SC), Rajasthan Roller Flour Mills Association v. State of Rajasthan [1993] 91 STC 408 (SC), A.P. Products, Hyderabad v. State of Andhra Pradesh [2001] 123 STC 619 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l labour or by mechanical process should be on a large scale and should pass as a commercial commodity from hand to hand. If the aforementioned two tests are applied to the facts of this case, the above judgment of the Calcutta High Court, instead of supporting the case of the petitioner, would support the stand taken by the department. In Vaiswaner Trading Co.'s case [1964] 15 STC 586 (Guj), the question that arose for decision was whether riveted baling hoops which are nothing but pieces of rolled steel sections joined together by riveting, fall within entry 4 in Schedule AA of the Bombay Sales Tax Act, 1953. The Bombay High Court opined that despite the fact that pieces of rolled steel sections are joined together by riveting, they still retain the same form in which rolled steel sections are directly produced by the rolling mills. In Pio Food Packers case [1980] 46 STC 63, the Supreme Court held that when pineapple fruit is processed into pineapple slices for the purpose of being sold in sealed cans there is no consumption of the original pineapple fruit for the purpose of manufacture and the case does not fall within section 5A(1)(a) of the Kerala General Sales Tax Act, 1963 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leaves from perishing, making them fit for transporting and marketing. In Chowgule Co. Pvt. Ltd. case [1981] 47 STC 124 (SC), the word "processing" occurring in section 8(3)(b) of Central Sales Tax Act, 1956 and rule 13 of the Central Sales Tax (Registration and Turnover) Rules, 1957 fell for interpretation in the absence of definition of that word in the statute. The Supreme Court, dealing with the question when an activity is said to involve process of manufacture, laid down a test to answer such question. The test is, does the processing of the original commodity bring into existence a commercially different and distinct commodity? The purport of this test is that if the processing of the original commodity ultimately results into production of a commercially different and distinct commodity, it should be held that the said process involves process of manufacture. In Sterling Foods case [1986] 63 STC 239, the ques tion that arose for decision before the apex Court was whether raw shrimps, prawns and lobsters after undergoing the process of cutting of heads and tails, peeling, deveining, cleaning and freezing, retain their original character or identity or become a new commodit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The process involved in the manufacture of bale boards is described by the Deputy Commissioner (CT) as follows: "The commodity bale board is packing material made of cheap wood. The process of manufacture is that five or six pieces of wooden planks are joined together thereafter at both the ends reapers are put as a border and nailed together to keep them intact and form into a board. Thereafter all the four corners of the board so formed are severed and brought into round shape. As such it is altogether a different commodity and accordingly nothing to do with the planks which are used in its manufacture." 13.. The raw material used in the production of bale boards is admittedly cheap wood. The process of making bale boards involves joining 5 or 6 pieces of wood planks together, putting reapers at the ends and nailing the boards to keep the planks jointed intact and in a good condition. It also involves severance of all the four corners in order to create a round shape bale board. The production of bale boards is on large scale and they have a distinct purpose for packing tobacco and, therefore, it cannot be said that the cheap wood which is used as raw material for production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Sales Tax Act, 1956. In a recent judgment in Scindia Rubber Works case [2002] 125 STC 318 (AP), dealing with the question whether RMA rubber sheets are classifiable under entry 10 of the First Schedule to the Act or it is taxable as a general item, this Court has opined that RMA rubber sheets are different goods than latex or natural rubber and that RMA rubber sheets are the endproducts of the process to which latex or natural rubber is subjected to. In the conspectus of the ratio of the judgments of the Supreme Court and of this Court noticed above, we have no hesitation to hold that bale boards are undoubtedly different and distinct commodities than cheap wood which is used as raw material in their production. In the light of this finding, no exception can be taken to the view taken by the learned Tribunal. The same reason holds good to reject the contention of the learned counsel for the petitioner that bale boards could be brought either under entry No. 63 or entry No. 145 of the First Schedule to the Act, because timber and logs cut into sizes such as beams, rafters and planks, and the bale boards cannot be treated as the same goods. Added to this, it is also relevant to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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