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TMI Blog1987 (4) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... alendar year. The relevant period of assessment is May 23,1981 to December 31,1981. In the quarterly returns submitted by it under the State Act and Central Act, the petitioner claimed that sales were of lax-paid goods and no tax was, therefore, payable under Section 2(r) (ii) of the State Act and under Notification No. 3326-3081/V-ST, dated October 11, 1977, under the Central Act and placed reliance on two decisions of the Allahabad High Court. According to the petitioner, by crushing lumps into chips and powder, there was no manufacture inasmuch as no different commercial commodity came into being. What was sold was also dolomite in the form of chips and powder, instead of lumps. However, the Sales Tax Officer rejected the claim of the petitioner and held that a different commodity is obtained by crushing dolomite lumps into chips and powder. Since there was a manufacture within the meaning of Section 2(j) of the Stale Act, he disallowed the claim of deduction on account of sale of tax paid goods under Section 2(r)(ii) of the Act. He assessed sales at Rs. 1,23,000 as taxable at 10 per cent and levied tax of Rs. 12,300 under the State Act and held sales of Rs. 3,62,000 in the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt commercial commodities and the prices are also different, depending upon the purpose for which it is purchased by the manufacturer. By a rejoinder, the petitioner reiterated that dolomite remains commercially the same commodity when lumps are crushed into chips or powder. The breaking of dolomite lumps into chips or powder will not mean "manufacture" within the meaning of Section 2(j) of the State Act, as no different commercial commodity is brought about by breaking. Dolomite chips and powder are mostly sold to glass manufacturers by the petitioner, who use lumps, chips and powder, as evident from the vouchers produced by the respondents. The only difference is that smaller pieces melt earlier and chips and powder are costlier. As dolomite lumps are purchased at the mines, these are sorted out and good quality transported to the place of crushing. Then they are packed in gunny bags and thereafter sent to the railway station for transportation by rail. This explains the difference in the prices between the lumps and chips or powder. 5. The only question for consideration is as to whether, the petitioner who purchased dolomite lumps from registered dealers, sells dolomite chips ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In BF grade, total insolubles up to 10 per cent is tolerated but for SMS it should be below 4 per cent. Ferro-manganese and ferro-silicon industries generally use SMS grade. Dolomite for such purposes should be hard and fine grained because crystalline dolomite gives fritting effect in the furnace, is also consumed in fertiliser industry for making calcium, ammonium nitrate and also as a costing material for fertilisers. Glass industry is another important consumer of dolomite where it is valued for its magnesium content in the manufacture of sheet and optical glasses. For this purpose consumers prefer to have dolomite free from iron content. Other minor uses of dolomite are many, such as in paints and varnishes, as filler in the manufacture of mineral wool, as hardening agent in rubber and as an accelerator in vulcanising process and some time as soil conditioner. Crystalline and metamorphosed dolomite takes good polish and is extensively used as decorative building material. Dolomite marble chips are used for floorings". R.K. Sinha, in his book, Industrial Minerals, 1982 Edition : crystalline dolomite in Bhedaghat of Jabalpur district is of exceptionally high purity, contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is required to be applied is: does the processing of the original commodity bring into existence a commercially different and distinct commodity?" 8. The Supreme Court in State of Orissa v. Titaghur Paper Mills Co. Ltd. - (1985) 60 STC 213, has held : "Timber and sized and dressed logs are one and the same commercial commodity. Logs are nothing more than wood cut up or sawn and would be timber. Planks, beams and rafters would also be timber." Again, in Sterling Foods v. State of Karnataka - (1986) 63 STC 239, the Supreme Court has held: "Processed or frozen shrimps, prawns and lobsters are commercially regarded the same commodity as raw shrimps, prawns and lobsters. When raw shrimps, prawns and lobsters are subjected to the process of cutting of heads and tails, peeling, deveining, cleaning and freezing, they do not cease to be shrimps, prawns and lobsters and become another distinct commodity. They are in common parlance known as shrimps, prawns and lobsters. There is no essential difference between raw shrimps, prawns and lobsters and processed or frozen shrimps, prawns and lobsters. The dealer and the consumer regard both as shrimps, prawns and lobsters." Further in.A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their basic character as timber and, therefore, purchase tax could not be levied under Section 8(1) of the Act'. It may be mentioned that the view taken in State of M.P. v. Wasudeo is contrary 10 the subsequent decision of the Supreme Court in State, of Orissa v. Titaghur Paper Mills - (1985) 60 STC 213. Relying on the decision of the Supreme Court in Deputy Commissioner of Sales Tax v. Pio Food Packers - (1980) 46 STC 63, a Division Bench of the Karnataka High Court in Reliable Rocks Builders and Suppliers v. State of Karnataka - (1982) 49 STC 110, has held that the process of breaking boulders into jelly cannot be described as a manufacturing process. A Division Bench of the Kerala High Court in Deputy Commissioner of Sales Tax v. Sulaiman - (1986) 61 STC 331, has held that the bone-meal manufactured for sale as fertiliser in market has a separate commercial identity distinct from those raw-bones purchased, even though the process of manufacture involved is only the crushing and powdering such raw-bones, by relying on the decision of the Supreme Court in Deputy Commissioner of Sales Tax v. Pio Food Packers. The Bench dissented from the contrary decision of the Division Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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