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TMI Blog2001 (10) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... er also buys furfural which is used by it in the manufacture of goods for sale. Such purchase by the assessee of the petroleum products from the marketing companies, as also of the furfural, was made in circumstance in which no tax was payable. The assessing authority invoking section 7-A of the Tamil Nadu General Sales Tax Act, 1959, subjected the turnover of such purchases to purchase tax as the petroleum products bought by the assessee had been consumed by it in running the vehicles and furfural had also been consumed by it in the manufacture of other goods for sale. The assessing authority did not, while making such an assessment specify the sub-clause in sub-section 7-A(1) which was being invoked. On appeal, the Deputy Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le so holding, it was observed in that case that there was no evidence of any transfer at all. Therefore there was no disposal of the goods as known to law. 3.. Counsel also invited attention to the case of State v. B. Raghurama Shetty [1975] 35 STC 360, a decision rendered by the Karnataka High Court in which also the meaning of the word disposal was considered. At para 14 of the judgment, the court quoting the Corpus Juris Secundum (Volume 27), set out the meaning of the word disposal given therein: Passing out of control from one to another, either temporarily or permanently, as distinguished from a mere change of use of the owner. The statement in the Corpurs Juris Secundum with regard to the expression dispose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench of the Supreme Court in the case of Assistant Commissioner (Intelligence) v. Nandanam Construction Company [1999] 115 STC 427 resolved the conflict with regard to the manner in which such clause occurring in different State statutes should be interpreted. After examining the matter, the court held, referring to the analogous provision in the Andhra Pradesh General Sales Tax Act, in section 6-A(ii)(a), thus: To our mind, it appears that the object of section 6-A(ii)(a) of the Act is to levy purchase tax on goods consumed either for the purpose of manufacture of other goods for sale or consumed otherwise. If the view in Pio Food Packers [1980] 46 STC 63 (SC); (1980) 3 SCR 1271, is accepted the result would be that the expression ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low item 159 in the First Schedule to the State Act as it stood at the relevant time. That Explanation which refers to items 151 to 159 which set out various petroleum products reads thus: Explanation I. For the purposes of items 151 to 159, a sale by one oil company to another oil company shall not be deemed to be the first sale in this State and accordingly any sale by one oil company to any other person (not being an oil company) shall be deemed to be the first sale in the State. This Explanation does not treat a sale from one oil company to another as a transaction which falls out of the definition of sale in the Act. On the other hand, it recognises the fact that a sale does take place between two oil companies. All that it doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t do so, as, under the scheme by which it was governed, it was required to sell the entire stock of petroleum products to the marketing company. These factors, in our opinion, do not in any way affect the taxability of the transaction. As observed earlier, the Explanation does not confer immunity from tax for oil companies. It merely declares that sales effected by one oil company to another will not be treated as first sale in the State and those transactions continue to remain sale and do not cease to be so by reason of the Explanation. 9.. So far as the submission that the assessee would be subjected to an additional burden by the imposition of the tax under section 7-A is being cast on the assessee. The petroleum products that it w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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