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TMI Blog2014 (2) TMI 1258X X X X Extracts X X X X X X X X Extracts X X X X ..... er mixtures obtained by the appellant out of the chemical fertilizers, which had already suffered local sales tax under the KST Act, were allowed exemption from the levy of turnover tax under section 6B of the said Act in terms of the three notifications dated March 31, 1997, March 31, 1998, March 31, 1999. 3. Subsequently, reassessment under section 12A of the Act was passed on the basis of the judgment dated November 25, 2004 of this court in the case of Pali Chemical Industries, Nippani, Belgaum v. Additional Commissioner of Commercial Taxes, Zone I, Bangalore reported in [2008] 11 VST 926 (Karn); [2005] 58 KLJ 54 (HC) (DB), that the chemical fertilizer mixture is not eligible for exemption from turnover tax even if its components have already suffered local tax under the Act. Appeal filed by the assessee against the said order also came to be dismissed. It is against the said order, the assessee preferred an appeal before the Karnataka Appellate Tribunal. 4. The Tribunal after noticing that, while delivering the judgment in Pali Chemical Industries case [2008] 11 VST 926 (Karn); [2005] 58 KLJ 54, the &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities were in error to have recorded a finding to the contrary effect. The assessee has exclusively sold only such chemical fertilizer mixtures which were entirely made from locally purchase KST suffered fertilizers. Such fertilizer mixtures are entirely outside the purview of the aforesaid Schedule entry. Therefore, there is no justifiable reason to refer to the said Schedule entry for interpreting the afore- mentioned notifications exempting the levy of turnover tax on the second and subsequent sales of chemical fertilizers. The Legislature clearly recognizes that the fertilizer mixture is to be understood as a collection of individual fertilizers and not as a manufactured commodity different and distinct from the components thereof and therefore, it was held that there was no justification to reassess these cases under section 12A of the Act which are followed by rectification orders." and set aside the order. 6. Aggrieved by the said order of the Tribunal, the State has preferred these revision petitions. 7. Before going to the merits of the case, we would like to place on record that we are very much disturb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 11(ii) of the Second Schedule to the Act speaks of chemical fertilizer mixtures of two or more chemical fertilizers on the turnover relating to components thereof, viz., individual chemical fertilizers which have not already suffered tax. The expression 'chemical fertilizers' occurring in the opening part of the entry speaks of individual chemical fertilizers and the Legislature specifically excludes items falling under sub-entry (ii) from chemical fertilizers. The chemical fertilizer mixture is a mixture of two or more chemical fertilizers. The mixtures and its components have different chemical properties of their own and their use is also different. If an assessee purchases chemical fertilizers and brings about a new product by mixing one or more of the said products, the mixed product cannot be said to be chemical fertilizers and the mixed product will have different properties of its own and it cannot be said that it retains the same characteristics or properties of any one of the chemical fertilizers which went to make up the resultant mixture. Secondly, the intention of the Legislature appears t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h as manure or sewage. Others are manufactured from certain minerals or synthetic compounds produced in factories. There are two kinds of fertilizers, namely, mineral and organic. Manufacturers produce mineral fertilizers from certain minerals or synthetic substances. Organic fertilizers come from decayed plant or animal matter. Fertilizer is produced in four basic forms. Straight good fertilizer is any chemical compound that contains one or two fertilizer elements. Bulk blend fertilizer is a mixture of straight goods in certain proportions. Manufactured fertilizer consists of two or more chemicals that are mixed and then formed into small grains. Chemical fertilizer mixtures consist of two or more chemical fertilizers in addition to a few other articles such as gypsum, leather meal, etc. The chemical fertilizer mixtures that are produced out of two or more chemical fertilizers are different commercial commodities, since it has different use and has different chemical properties. 14. Now let us notice the notification issued by the State Government in No. FD.32.CSL.81 dated June 29, 1981. The notification reads a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 522 (SC), while dealing with chemical fertilizer has categorically held as under (page 525 in 37 STC): "A plain reading of the above-mentioned provisions would show that it is only when a chemical fertiliser specified in sub-items (1) to (15) of item No. 21 of the First Schedule is sold in the same condition in which it is purchased that it is not subject to a fresh levy. Fertiliser mixture, it would be noted, is not the same article as the ingredients composing it. It is sold as a different commercial product. It is put to a different use and has different chemical properties. As such, it has to be treated as a different article from its component parts. The question whether there is any manufacturing process involved in the preparation of any fertiliser mixture or whether shovel mixing of the chemical fertilisers amounts to manufacture or not is wholly irrelevant for the purpose of the determination of the question before us." Noticing that the entries in Part C of entry 11 of the Second Schedule, had been set out in Re Shaw Wallace's Co Ltd. . . ., analysing entry 11 of the Second Schedul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the question of Division Bench or the Tribunal following the said judgment to decide the case under the Act would not arise especially when entry 11 of the Act specifically contains entry under the heading chemical fertilizers other than those falling under item (ii) below and item No. (ii) dealing with chemical fertilizer mixtures of two or more chemical fertilizers on the turnover relating to components therefore, viz., individual chemical fertilizers which have not already suffered tax. Therefore, the question of the Division Bench in the case of Pali Chemical Industries' case [2008] 11 VST 926 (Karn); [2005] 58 KLJ 54, noticing the earlier judgment, following or distinguishing the same did not arise. 13. According to the Tribunal, yet another decision rendered in B. H. Vasu- deva Pai & Sons v. State of Karnataka [2006] 146 STC 232 (Karn) has not been noticed. Though this is also a judgment under the provisions of the Act, the entry therein was regarding insecticides or pesticides and the question that arose for consideration of the court was whether it includes copper sulphate. Therefore, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held by the Division Bench of this court in the case of B. H. Vasudeva [2006] 146 STC 232 (Karn). There- fore, the argument was that the chemical fertilizer includes chemical fertilizer mixture. The observations of the Division Bench cannot be taken out of context. In B. H. Vasudeva's case [2006] 146 STC 232 (Karn), the court was interpreting entry 117 of the Second Schedule which dealt with insecticide and pesticides. Fungicides, weedicides, herbicides, etc., were added to this entry with effect from April 1, 1992. If fungicides and herbicides also fall under the category of pesticides and insecticides, then the need for the Legislature to add fungicides, weedicides and herbicides in entry 117 vide Karnataka Amendment Act No. 4/1992, would not have been there. It was further observed that the Legislature had chosen to include fungicides, herbicides, etc., in entry 117 of the Second Schedule in 1992, since those chemical compounds are different from insecticides and pesticides. That was a case where dealers claimed exemption from payment of turnover tax in respect of copper sulphate relying on the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This benefit was not extended to chemical fertilizer mixture. Therefore, when the Legislature made a distinction between chemical fertilizer and chemical fertilizer mixture from the inception, a notification exempting from payment of turnover tax on chemical fertilizer cannot be extended to chemical fertilizer mixture. If that is done by the interpretation process, the court would be adding to the notification which the Legislature and the Government did not intend to. 18. The courts have no power to legislate, to add or to remove from the notification issued by the Government. When the Government notification specifically refers to the chemical fertilizer, there is no scope for interpretation also. In that view of the matter, we do not see any substance in the said contention. In fact, in the Pali Chemical Industries case [2008] 11 VST 926 (Karn); [2005] 58 KLJ 54, the Division Bench, as stated earlier, has extracted the entries, examined the entire scheme of entry 11, followed the judgment of the apex court, looked into the very same notification and has placed interpretation, which, in our opinion, is also proper ..... X X X X Extracts X X X X X X X X Extracts X X X X
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