9911796707
TMI Blog1991 (7) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged in grinding of cotton-seeds, etc. The cotton-seed oil is sold in the State of Punjab as well as in other States. It is registered as a dealer under the Punjab General Sales Tax Act, 1948 and the Central Sales Tax Act, 1956 (hereinafter referred to as 'the 1948 and 1956 Acts", respectively). Originally the sales tax was levied on inter-State sales at the rate of 4 per cent. However vide Notification dated January 11, 1979, issued under section 8(5) of the 1956 Act, the Government of Punjab fixed the rate of sales tax at 1 per cent. The petitioner was assessed for the years 1981-82, 1982-83, and 1983-84 and sales tax on inter-State sales was charged at the rate of 1 per cent. Thereafter, the petitioner received notices under section 21 of the 1948 Act calling upon it to show cause as to why tax be not assessed at the rate of 4 per cent. It was also called upon to show cause against the imposition of penalty and interest. The petitioner appeared before the authority, viz., respondent No. 3, who vide orders dated November 24, 1986, a copy of which has been placed on record as annexure P4, created an additional liability of tax for an amount of Rs. 62,913 besides an amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efining and purifying the cotton-seed oil; (5) the fact that cotton-seed oil is permitted for use in the manufacture of edible, and vegetable oil products does not prove its worthiness to be declared as edible oil. There is no denying the fact that the Central Government has permitted the use of specified percentage of cotton-seed oil by mixing it with specified percentage of other refined oil for the manufacture of edible oil products; (6) the dealer has a plant. In this plant, after crushing cotton-seeds, the crude oil is taken to a vessel. It is heated to a certain degree by passing steam in the pipes fitted in the vessel and the fans fitted therein start thrashing the oil. Caustic soda is poured in the vessel so as to wash the cotton-seed oil. By this process, certain impurities settle down which come out of the vessel as 'gad'. The remaining oil lying on the surface of the vessel is taken out through pipes to a separate tank. At the most, we can say that the dealer sold washed cottonseed oil; (7) the cottonseed oil to assume the character of edible oil has to be refined; (8) a minimum refinery unit consisting of the three units, i.e., neutralising section, bleaching se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Mills Ltd. v. Commissioner of Incometax), AIR 1986 SC 1162 (Satyanarayana v. State of Karnataka) and [1973] 31 STC 302 (SC) (Commissioner of Sales Tax v. S.N. Brothers). 9.. Shri Brar representing the State brought to my notice that the question of cotton-seed oil being edible or not, was discussed quite succinctly in Appeal No. 65 of 1985-86 decided by this Tribunal where various provisions of the Prevention of Food Adulteration Rules, 1955, were also discussed. This Tribunal, vide order of January 27, 1987, in Appeal Nos. 411, 412 and 413 of 1985-86 held that the cotton-seed oil was not fit for direct human consumption and hence was liable to be taxed at the rate of four per cent. 10.. In view of these facts and after giving careful consideration to the arguments of Shri Goyal, as well as rulings cited by him and taking into account my order of January 27, 1987, I see no reason to upset the orders of the Assistant Excise and Taxation Commissioner dated November 24, 1986, and hence I dismiss these revision applications." The admitted position, therefore, is that the petitioner sold washed cotton-seed oil. Was this edible oil? This expression is not defined under the 1948 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as 'the 1954 Act"). He referred to standards of quality as specified in appendix "B" to the Prevention of Food Adulteration Rules, 1955, wherein the following entry appears: "A. 17.02-Cotton seed oil (Binole ka tel) means the oil extracted from clean, sound and decorticated cotton-seeds (genus gossypium), refined and dehydrated. It shall be clear, free from rancidity suspended or other foreign matter, separated water, added colouring or flavouring substances, or mineral oil. It shall conform to the following standards: (a) Butyro-refractometer reading at 40 C 55.6 to 60.2 (b) Saponification value 190 to 198 (c) Iodine value 98 to 112 (d) Unsaponifiable matter Not more than 1.5% (e) Free fatty acid as oleic acid Not more than 1.0% (f) There shall be no turbidity after keeping the filtered sample at 30 C for 24 hours." He has also relied upon the standard prescribed by the Indian Standards Institution at annexure R2. He also relied upon the decision of a Division Bench of the High Court of Hyderabad in Kishenlal Oil Mills v. Commissioner of Sales Tax [1955] 6 STC 650, wherein the following observations appear: "The second point, viz., whether cotton-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54. Thereafter, as far back as the year 1963, the Directorate of Marketing and Inspection had itself described washed cotton-seed oil as edible. Further, as recently as September, 1990, the Central Government has defined "edible oil" to mean any oil used for human consumption after processing. The oil produced by the petitioner conformed to these standards. It was processed. It is admittedly used for human consumption. There is nothing to show that it did not conform to the instructions issued by the Government in the year 1963 (vide annexure P9 in C.W.P. No. 264 of 1987). In fact, a perusal of the impugned order would show that respondent No. 3 has found as a fact that cotton-seed oil is consumed by many people like the palm-oil and that the petitioner "sold washed cotton-seed oil". Even the Presiding Officer of the Sales Tax Tribunal has found that the petitioner had sold washed cotton-seed oil. Even the specification issued by the Indian Standards Institution, inter alia, provides as under: "2.12. Washed cotton-seed oil-cotton-seed oil obtained by the process of expression which has been neutralised with alkali and subsequently washed and dried." In this view of the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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