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TMI Blog2016 (9) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant in STR/6/2009. Ms. Uma Palsuledesai AGP for the appellant in STR/68/2009. Mr. C. B. Thakar for the respondent in both appeals. ORAL JUDGMENT:- (S. C. Dharmadhikari, J.) 1) This reference by the tribunal vide its order dated 24th November, 2006 seeks, according to the tribunal, opinion and answer by this court on a question of law. That question, as framed in the order of reference dated 24th November, 2006 in Reference Application Nos. 105 and 106 of 2006 reads as under:- Whether on the facts and the circumstances of the case, the Tribunal was justified in holding that the sale of 'bagasse' is a tax free sale under section 5 of the Bombay Act covered under schedule entry A-44? 2) Since this question is common to both these references, we would take the facts from Sales Tax Reference No. 6 of 2009. 3) The tribunal had before it two appeals being Second Appeal Nos. 558 and 869 of 2005. It delivered a common judgment therein on 24th February, 2006. 4) The Revenue sought a reference of the above question because, according to it, the respondent dealer is a co-operative society manufacturing sugar. It is duly registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961 is concerned, there, a specific exemption from tax on sugarcane was provided. While dealing with such an issue, the Allahabad High Court held that:- ..... The learned counsel for the assessee has argued on the 2nd point that the bagasee being the residue of the sugarcane should not be treated as a different commodity exigible to the sales tax but the learned Tribunal has committed an error of law by treating it as a different commodity attracting liability of sales tax. He has further submitted that the revisionist had paid purchase tax on the purchase of sugarcane out of which bagasse has been left out in the manufacturing process and no tax on sale of bagasse can be levied under the U. P. Sales Tax Act in view of the bar created by section 13 of the U. P. Sugarcane (Purchase Tax) Act, 1961. The learned Standing Counsel has however submitted that the bagasse is a commodity different from sugarcane and as such it attracts sales tax on its sale under the Act. Therefore the substantial question arising for consideration is whether the bagasse will be treated as a different commodity exigible to sale tax under the Act. In support of his contention Mr. Bharat Ji A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set aside. I hold that bagasse being the residue and the result of the sugarcane after its processing is not exigible to sales tax under the Act even on its sale. .. 8) The tribunal, while passing the order on the second appeals, held as under:- ..... 9. It further appears that the department has filed SLP against that judgment, which was also rejected by the Supreme Court. There is no other decision of our High Court or any other High Court wherein contrary view has been taken than the view taken by the Allahabad High Court. Mr. Akhade was unable to satisfy us as to why the meaning of Baggasee explained by the Allahabad High Court should not be accepted, and as to why the same is not applicable in the context of the Bombay Act. It is our considered view that the Baggasee is a residue of the sugarcane lift after the processing and continues to be residue of the sugarcane and certainly not be a different commercial commodity if juice sucrose and water contents are squeezed out of sugarcane. It is also rightly pointed out by Mr. Ghanekar that in the case of M/s. Kisan Sahakari Chini Mills Ltd. (STI 1989 All. 294), the Allahabad High Court held that so far as Baggasee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as sugarcane. Factually, Sugarcane seedlings apparently are sugarcane which is cut into smaller pieces and sold as a seed for sugarcane. Even then considering the nature, characteristic and utility, the Andhra Pradesh High Court held that sugarcane seedlings are different commodity than sugarcane. It is also pointed out that the High Court of Punjab Haryana in the case of M /s. Jagraon Sugar Mills Limited (94 STC 98) has held that, 'molasses and bagasse' according to the dictionary meaning are in the nature of 'by-product residue' in the process of manufacture of 'sugar'. According to him, a by-product cannot be termed as the same commodity from which or in the process of which the by-product is generated. It also appears that in the case of M/s. Madurantakam Co-op. Sugar Mills (38 STC 238), the Madras High Court, on the tax enhancement petition filed by the revenue against the Tribunal order held the sale of 'bagasse' of ₹ 16.84 lacs, as liable to tax. Now as there is no direct judgment of our high court on the present issue and as there is a possibility of different view than expressed by the Hon'ble Allahabad High Court in the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and bagasse. Sales of molasses were disallowed, whereas the sales of bagasse were partially allowed. It is in these circumstances Mr. Nair would submit that it is not appropriate to hold that there is no material or evidence in this case. Therefore, all the judgments relied upon are distinguishable. 12) Mr. Nair has relied upon the following judgments:- (i) Union of India vs. DSCL Sugar Ltd., 2015 (322) E. L. T. 769 (S. C.). (ii) Motipur Zamindary Co. (Private) Ltd. vs. The State of Bihar and Anr., 1962 STC Vol. XIII 1. (iii) Sakthi Sugars Limited and Ors. vs. Deputy Commercial Tax Officer, Bhavani and Ors., 1969 STC Vol XIII 232. (iv) Ramavatar Budhaiprasad vs. The Assistant Sales Tax Officer, Akola and Anr. 1961 STC Vol. XII 286. (v) Etikoppaka Co-operative Agricultural and Industrial Society Ltd. vs. Commercial Tax Officer, 2000 STC (Vol. 20) 608. (vi) M/s. Indo International Industries vs. Commissioner of Sales Tax, Uttar Pradesh, AIR 1981 SC 1079. (vii) Dhampur Sugar Mills Limited vs. Commissioner of Sales Tax, U. P. Lucknow, 1996 STC (Vol. 100) 434. 13) On the other hand, Mr. Thakar appearing for the dealer would submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to assume jurisdiction. It is in that context the Madras High Court held thus:- What is the jurisdictional fact that confronts us in this case? It is whether sugar-cane setts are sugar-cane, and if it is so established, then the revenue will have jurisdiction to assess the petitioners and the appellant and if not, the absence of the jurisdictional fact is apparent. This leads us to enquire as to what is a sugar-cane sett. Sugar-cane sett is a portion of cane stalk (cutting) such as is used for planting. It is a seedling which could be propagated and multiplied idefinitely from cuttings See Encyclopaedia Britannica. Sugar-cane seed is very small, rather silky and rarely viable See Van Nostrand's Scientific Encyclopaedia. It is said that sugar-cane seeds are so small that nearly 100 sugar-cane seeds would be required to equal the weight of a single wheat grain (Encyclopaedia Britannica). Therefore, propagation of sugar-cane is by cuttings 8 to 10 inches long known as seeds , made from the upper joints of old canes. They are placed in trenches and merely covered with soil. They begin to sprout in about two weeks and the crop is harvested in 10 to 20 months. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nderstood by the common man and the commercial community in different and distinct ways. Thus, we find that sugar-cane setts are not classifiable as sugar-cane and therefore the respondent had no jurisdiction to issue the impugned notices and pass the impugned assessment orders. Even so the order of the Board of Revenue in T. C. No. 2 of 1968 is unsustainable. 18) It is in these circumstances and when sugarcane setts were attempted to be equated with sugarcane and noticing their usage, the Division Bench found that if sugarcane is asked for, sugarcane setts cannot be supplied by a merchant. It is in these circumstances that sugarcane setts are not sugarcane as is understood in commerce and trade. We have no such material before us. Rather, ours is a case as close as could be found to the facts and circumstances in the Allahabad High Court judgment. 19) Even the judgment in the case of Ramavatar Dudhaiprasad (supra) was clear. The word vegetable in Item 6 of Schedule II of the C. P. and Berar Sales Tax Act, 1947 requires consideration not in any technical sense nor from the botanical point of view but as understood in common parlance. Having not been defined, it must ..... X X X X Extracts X X X X X X X X Extracts X X X X
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