TMI Blog1979 (7) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... hin item 21 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. Consequently, the exemption conceived by that entry was not available to the assessee and, therefore, the turnover would have been taxed under section 3(1). With reference to the turnover under section 3(1), the contention of the assessee was that it was entitled to exemption under G.O. Ms. No. 976, Revenue, dated 28th March, 1959. As the inorganic mixture had already suffered tax and a mere mixing operation would not amount to a manufacturing process, it was submitted that the tax-suffered ingredients could not be taxed under item 21 of the First Schedule. This contention having been negatived by the sales tax authorities, the matter came before the Sales Tax Appellate Tribunal. The Tribunal held that even a mixture of pure inorganic chemicals with fillers like gypsum, chinaclay and deoiled cake will fall under item 21 of the First Schedule and, consequently, G.O. Ms. No. 976, Revenue, dated 28th March, 1959, would not be attracted. As regards the claim for exclusion of the turnover on the ground that the ingredients had already suffered tax, the Tribunal relied on the decisions of this Court in State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted ------------------------------------------------------------------------------- 43. Sales by Co-operative Wholesale Exemption applies to the Stores in the State of Madras to tax payable under secprimary Co-operative Stores which tion 3(1) of the Act only. are members of such Co-operative Wholesale Stores. ------------------------------------------------------------------------------Section 3(1) provides that every dealer whose total turnover for a year exceeds the minimum amount not taxable shall pay a tax for each year at the specified percentage of his taxable turnover. Sub-section (2) of section 3 provides that notwithstanding anything contained in subsection (1), in the case of goods mentioned in the First Schedule, the tax under the Act shall be payable by a dealer at the rate and only at the point specified therein on the turnover in each year relating to such goods whatever be the quantum of turnover in that year. The First Schedule contains a list of the goods in respect of which single point tax is leviable under sub-section (2) of section 3. Item 21 of the said list, as it was in force in the relevant year, ran as follows: --------------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the listing itself loses all meaning and would be without any purpose behind it." The result of this interpretation was that unless a commodity fell within the enumerated category it would not come within the scope of the provisions of section 14. Similarly, in the present case, unless the fertiliser sold by the assessee came within the enumerated category, the turnover in such item would not fall for consideration of single point levy of tax. In this connection, the decisions of this Court, which have considered the interpretation to be put on item 21 of the First Schedule, may now be referred to. In State of Tamil Nadu v. Rallis India Ltd.[1974] 34 S.T.C. 532., the disputed turnover represented sales of manure mixtures effected by the assessee. The contention of the assessee was that the sales were second sales of chemical fertilisers and, as such, were exempt from tax. The assessing authority treated the disputed turnover as first sales of chemical fertilisers taxable at single point under item 21 of the First Schedule. The Appellate Assistant Commissioner upheld that view of the assessing authority. On further appeal, the Tribunal took the view that though the manure mixtu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court). was also decided and the same conclusion was reached. The case of Shaw Wallace and Company Ltd. was taken up in appeal to the Supreme Court and the Supreme Court decision is reported in Shaw Wallace Co. Ltd. v. State of Tamil Nadu[1976] 37 S.T.C. 522 at 524, 526 (S.C.). The Supreme Court affirmed the decision of this Court on the basis that the mixtures produced by the assessee were different from their component parts, that their properties and uses were also different, and that they were sold as different commercial products. It was, therefore, held that the assessee was not entitled to the exemption on the ground that the tax had been paid on the components at an earlier stage. One aspect which may be noticed at this stage with reference to the decision in Shaw Wallace and Co. Ltd. v. State of Tamil Nadu[1976] 37 S.T.C. 522 at 524, 526 (S.C.). is that this was a case of a mixture of chemical fertilisers consisting of sub-items (1) to (15) of item 21 of the First Schedule. The Supreme Court had not to deal with the question as to whether the case came within the scope of sub-item (16) of item 21. That the decision has to be understood in the above manner would be clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a mixture of less than two articles. Since similar expression has been used in respect of organic manures and both the expressions are joined together by the word 'and', it is indisputable that for a mixture to fall under item (16), it must be a mixture of at least one or more of the articles mentioned in items (1) to (15) and at least one organic manure." The result can be summed up as follows: If there is only a mixture of sub-items (1) to (15), then the product will not fall within the scope of item 21 as the mixed product is a commercially different one and is not the same as the components. If there is a mixture of sub-items (1) to (15), and an organic manure, then it will fall within sub-item (16) and come within the scope of item 21. If there is a mixture of sub-items (1) to (15) with any other foreign substance, which is not an organic manure, then it would not fall within the scope of item 21 at all. It is in the light of the above that the question will have to be considered by the Sales Tax Appellate Tribunal when it considers the matter afresh as a result of our decision in this case. The result is that the matter is remanded to the Tribunal to consider the matter a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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