TMI Blog1960 (9) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... rticle 32 of the Constitution the petitioner, a partnership firm carrying on the business of manufacture of bidis and having its head office at Jabalpur within the State of Madhya Pradesh complain that its fundamental rights under Article 19(1)(f) and (g) of the Constitution have been violated by the illegal imposition of a purchase tax on certain purchases of tobacco made by it in the State of Bombay. It appears that the Sales Tax Officer, Baroda, made an order assessing the petitioner to a purchase tax under section 14, sub-section (6), of the Bombay Sales Tax Act, 1953 (Bom. Act III of 1953) for the period April 1, 1954, to September 29, 1955. The petitioner contends that this assessment was illegal inasmuch as these transactions are purchases "outside the State of Bombay" within the meaning of Article 286(1)(a) of the Constitution read with the Explanation and also because these transactions took place in the course of inter-State trade and commerce within the meaning of Article 286(2) of the Constitution. It was also urged that the provisions of the Bombay Sales Tax Act, 1953, do not authorise the imposition, levy or collection of any purchase tax on the transactions in questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom time to time in Schedule A and in the preceding entries." (An amendment by the Bombay Act 71 of 1958 added the words "and section 7A" after the words "Schedule A"). The question is whether these words "all goods other than those specified from time to time in Schedule A and in the preceding entries" amount to a specification of goods for the purpose of section 10. On behalf of the petitioner Mr. Pathak contends that only the mention of specific goods can amount to specification and mention of goods in such general language as "all goods other than those specified from time to time in Schedule A and in the preceding entries" cannot be said to be a specification of goods. We are unable to accept this argument. While it is true that mention of specific goods is specification for the purpose of section 10 as also for the purpose of sections 8 and 9 of the Act, we see no reason to think that mention of goods in a general way as "all goods other than those specified from time to time in Schedule A and in the preceding entries" of Schedule B itself is not a specification. We are of opinion that the entry 80 in Schedule B is a specification of goods within the meaning of section 10 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivators. In the respondents' counter affidavit it is stated that "the petitioners after purchasing raw tobacco from the cultivators in the State of Bombay, subject the raw tobacco so purchased to process leading to its conversion into bidi pattis for immediate use in the manufacture of bidis....................that marketable value of raw tobacco and bidi pattis differs and that both these are commercially different articles...................." There was no further affidavit filed on behalf of the petitioner to traverse the averments of the respondents that the raw tobacco is converted into bidi patti before it is despatched outside Bombay State and that the market value of raw tobacco and bidi patti differs. Mr. Pathak also conceded at the hearing the correctness of the statement that anybody could go to the market to purchase the article known as raw tobacco or akho bhuko and that he could also go and purchase from the market the article known as bidi patti. That itself is sufficient proof that raw tobacco and bidi patti are distinct and different commercial articles. It is the background of these facts that we have to consider the question whether tobacco was delivered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yarn is woven into cloth by the weaver; the woven cloth is made into wearing apparel by the tailor. At each of these stages distinct utilities are produced and what is produced is at the next stage consumed. It is usual and correct to speak of raw cotton being consumed in ginning; of ginned cotton being consumed in spinning; of spun yarn being consumed in weaving; of woven cloth being consumed in the making of wearing apparel. The final product-the wearing apparel-is ultimately consumed by men, women and children in using it as dress. In the absence of any words to limit the connotation of the word "consumption" to the final act of consumption, it will be proper to think that the Constitution-makers used the word to connote any kind of user which is ordinarily spoken of as consumption of the particular commodity. Reverting to the instance of cotton, mentioned above, it will be proper to hold that when raw cotton is delivered in State A for being ginned in that State, it is delivered for consumption in State A; when ginned cotton is delivered in State B for being spun into yarn, it is delivered for consumption in State B; when yarn is delivered in State C for being woven into cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cashew-nut kernels, are obtained. It follows, therefore, that the raw cashew-nut is consumed by the respondents in the sense I have mentioned." Das, J., here proceeded on the view that using a commodity so as to turn it into a different commercial article amounts to consumption within the meaning of the Explanation to Article 286(1)(a)-a view which he had earlier indicated at page 110 of the Report. We are not aware of any case where such use of a commodity has been held not to amount to consumption. It must therefore be held on the facts of this case that when tobacco was delivered in the State of Bombay for the purpose of changing it into a commercially different article, viz., bidi patti, the delivery was for the purpose of consumption. The purchases in this case therefore fall within the meaning of Explanation to Article 286(1)(a) and must be held to have taken place inside the State of Bombay. There remains for consideration the objection that the transactions took place in the course of inter-State trade or commerce within the meaning of Article 286(2) of the Constitution and the levy of tax was therefore prohibited by the provisions thereof. Even if these tran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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