TMI Blog1976 (3) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... he First Schedule to the Tamil Nadu General Sales Tax Act, 1959, hereinafter referred to as "the Act", shall be disposed of by this judgment. The appellant, Tvl. Shaw Wallace Co. Ltd., a public limited company, is a registered dealer under the Act and is an assessee on the rolls of the Commercial Tax Officer IV, Central Assessment Circle-23, Madras. Amongst other things, the appellant manufactures and deals in chemical fertilisers. It also prepares fertiliser mixtures. For the assessment years 1969-70 and 1970-71, the appellant claimed exemption on a turnover of Rs. 2,35,01,129.47 and Rs. 2,07,94,490.73 respectively relating to sales of fertiliser mixtures. The case of the appellant was that as the fertiliser mixtures were prepared by dry mixing of various chemical fertilisers [shown as sub-items (1) to (15) of serial No. 21 of the First Schedule to the Act] according to the standard formula approved by the Director of Agriculture at its mixing works manually by means of shovels and as the resultant product could not be said to be a commodity different from the ingredients composing it which had been purchased within the State and had suffered tax under item No. 21 of the Fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and the manure mixture have different chemical properties of their own and their use also is different. It is not, therefore, possible to treat the manure mixture as the same article as the components themselves......... Whether the process adopted (in the preparation of manure mixture) is manufacture or otherwise, if the resultant product obtained by mixing the various articles of chemical fertilisers referred to in item 21 is sold as a different commercial product and for a different user, it has to be treated as a different article from the components." In rendering this decision, the Madras High Court relied on the ratio of the decision of its own court in Imperial Fertiliser and Company v. State of Madras [1973] 31 S.T.C. 390. to the effect that if the mixture sold has different chemical properties and is treated as a different commodity in commerce, its sale cannot be taken to be a second sale of chemical fertiliser merely because the components have suffered tax at an earlier stage as chemical fertilisers. After failing to obtain a certificate of fitness for appeal to this court, the appellant applied for special leave to this court, which was granted, vide order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) ammonium nitrate; (3) urea; (4) ammonium chloride; (5) sodium nitrate; (6) calcium ammonium nitrate; (7) super phosphate single; (8) super phosphate triple; (9) kotka phosphate; (10) di-calcium phosphate; (11) potassium chloride (muriate of potash); (12) sulphate of potash; (13) mono-ammonium phosphate; (14) di-ammonium phosphate; (15) bone-meal; (16) any mixture of one or more of the articles mentioned in items (1 to 15) and one or more of the organic manures. Point of levy is at the point of first sale in the State, rate of tax is 3 per cent." 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 manufacturi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no identity between the product purchased and the product sold, it is not possible to treat the sales of the product by an assessee as second sales. In State of Tamil Nadu v. Rallis India Ltd.[1974] 34 S.T.C. 532., it was held that as manure mixture prepared from one or more of the articles mentioned in sub-items (1) to (15) of item No. 21 of the First Schedule has chemical properties different from its components and its use is also different, it is not possible to treat the manure mixture as the same article as the components themselves. The following observations made in this decision are pertinent: "If the product obtained by mixing the various chemical fertilisers referred to in item 21 is sold as a different commercial product and for a different user, it has to be treated as a different article from the components, whether the process of such mixture is one of manufacture or not." In State of Tamil Nadu v. Pyare Lal Malhotra [1976] 37 S.T.C. 319 at 324, 325-326 (S.C.)., (Civil Appeals Nos. 58-59 of 1971 and 880-883 of 1971 decided on January 19, 1976) a Bench of four Judges of this Court, to which one of us, namely, my Lord the Hon'ble Chief Justice was a party, h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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