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TMI Blog2009 (12) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant that under section 3 of the Act, the charging section, sub-section (1) prescribes that tax is to be levied on every sale of goods in the State by registered dealer or dealer liable to be registered in accordance with the provisions of the Act and section 4 of the Act prescribes the liability to tax as also the rate of tax. It was contended that as per section 4(1)(a)(ii) of the Act, the rate of tax applicable to the goods specified in the Third Schedule is four per cent and goods which are not specified in the Schedule or in respect of which no notifications are issued either granting exemption attract tax at 12.5 per cent. It was contended that the Third Schedule as it stood originally incorporated in the Act with effect from April 1, 2005 specifying categories of goods at Sl. Nos. 1 to 81 and with reference to the product in question, the entry is at Sl. No. 61 which reads as under: "61. Spices in all forms including jeera (cumin seeds) methi, poppy seeds (kaskas), corriander (dhaniya), shajeera, somph, katha, azwan, kabab chini, bhojur phool, tejpatha, japatri, nutmeg (marathamoggu), kalhoovu, aniseed, turmeric, cardamom, pepper, cinnamon, dal chinny, cloves, tamarind a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct from April 1, 2006 the earlier entry 61 has been amended by insertion of the words "including cut chillies, spent chillies and chilly seeds" in entry 89 but excluding spices in the form of masala powder, instant mixes and other mixtures containing more than one spice or a spice with other materials by Amendment Act, 2006 with effect from April 1, 2006 which in fact includes the present product and thus, the same is also applicable to the period from April 1, 2005 to March 31, 2006 as the product which comes out after extraction is an independent product and sold as such in the market and accepted in common parlance. We have heard Sri Rabinathan, learned counsel appearing for the assessee and Sri Vedamurthy, learned Government Advocate appearing for the respondent. Sri Rabinathan, learned counsel for the appellant, in support of his submissions would press into service the Division Bench decision of this court in Habeeb Proteins & Fats Extracts, Hiriyur, Chitradurga District v. Commissioner of Commercial Taxes, Bangalore reported in [2007] 6 VST 87; [2005] 58 Kar. L.J. 155 (HC) (DB) particularly drawing our attention to para 26 of the judgment. Refuting the contentions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lies and chilly seeds are also regarded as dry chillies and therefore, were within the scope and ambit of the expression "dry chillies" in the old Sl. No. 61 of the Third Schedule to the KVAT Act, 2003 as it existed up to March 31, 2006 to be eligible for levy of tax at four per cent, the Authority for Clarification and Advance Ruling was right in having held otherwise and issued the clarification that for the period prior to April 1, 2006, cut chillies, spent chillies and chilly seeds were liable to tax under section 4(1)(b) at 12.5 per cent? In order to consider the contentions raised by the respective counsel, it would be necessary to extract the relevant provisions of the Act, viz., section 4(1)(b) and the Third Schedule of the Act which came to be amended with effect from April 1, 2006. Insofar as Sl. Nos. 61 and 89 as it stood for the period April 1, 2005 to June 6, 2005 and April 1, 2005 to March 31, 2006 has already been extracted herein supra. Section 4. Liability to tax and rates thereof.-(1) Every dealer who is or is required to be registered as specified in sections 22 and 24, shall be liable to pay tax, on his taxable turnover; (b) in respect of other goods, at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continue to remain as oil cakes with lesser content of oil, and the original commodity is not used in the manner as to cease to exist or cease to be available in that form for sale or purchase to attract levy of tax under section 6 of the Act. An article which is commonly and generally known as oil cake would not lose its identity merely because the purchasing dealer utilises the same for extraction of oil and therefore, the essential ingredients required to attract the levy of purchase tax under section 6 of the Act are not satisfied and accordingly it requires to be held that there is no consumption of oiled sunflower cake and oiled groundnut oil cake in the manufacture of other goods for sale nor there is any consumption otherwise, since even after extraction of oil, the oiled sunflower cake and oiled groundnut cake continue to remain as oil cake with lessor quantity of oil and therefore, they continue to remain the same commodity." This court while considering as to character of de-oiled cakes remaining after extraction from oil cake held that, it does not lose its identity as whole cake nor it ceases to exist as a oil cake. Applying the proposition laid down in the said judgm ..... 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