TMI Blog1980 (9) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... ed bone; 15 per cent of raw bone is obtained as bone grist about 15 per cent is obtained as bone-meal; about 10 per cent is obtained as fluff about 5 per cent is obtained as horn hoof. The rest becomes waste. The dealers in T.C. No. 337 of 1979 exported crushed bone, but all the three dealers sold bone-meal, bone grist, fluff and horn hoof locally. As far as export is concerned, the Tribunal has remitted the matter back to the assessing officer in order to decide the question whether those sales fall within the scope of section 7-A(1)(b) or 7-A(1)(c) of the Tamil Nadu General Sales Tax Act, 1959, and whether the purchase tax is payable with reference thereto. With regard to the others, namely, bone-meal, bone grist, fluff and horn hoof, etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of section 7 shall apply to a dealer referred to in sub-section (1) who purchases goods [the sale of which is liable to tax under sub-section (1) of section 3] and whose total turnover for a year is not less than fifty thousand rupees but not more than one lakh of rupees; and such a dealer may, at his option, instead of paying the tax in accordance with the provisions of sub-section (1), pay tax at the rates mentioned in sub-section (1) of section 7. (3) Every dealer liable to pay purchase tax under sub-section (1), shall, for the purposes of this Act, be deemed to be a registered dealer." Consequently, for the purpose of section 7-A(1)(a) to apply, the goods purchased should have been consumed in the manufacture of other g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, the purchase turnover does not attract tax under section 7-A of the Act." The section came up for consideration again before this Court in T.C. No. 1183 of 1979 (State of Tamil Nadu represented by the Deputy Commissioner (C.T.), Salem v. K. Narayanaswamy Chetty and Sons). By judgment dated 11th December, 1979, this Court held as follows: "In this case, the assessees purchase turmeric from agriculturists, convert it into powder and sell the same, and the point that arises for consideration in this tax revision case is whether the purchase of turmeric from agriculturists will attract tax under section 7-A of the Tamil Nadu General Sales Tax Act, 1959. One of the conditions that should be fulfilled for attracting section 7-A is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Tax Act, namely, section 5A of that Act, before the Kerala High Court in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Pio Food Packers[1978] 41 S.T.C. 364 (Ker.). In that case, the assessee purchased pineapple and prepared pineapple slices by a process which included packing in tin containers for being made available in the market. The assessee purchased pineapple, washed it, removed the inedible portions, namely, the end, the crown, the skin and the core, sliced it, filled the slices in cans with some sugar added as preservative, sealed under temperature and put into boiling water for sterilisation and thus prepared pineapple slices. It prepared pineapple juice by crushing the pineapple and pressing it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the inedible portions, the core, the crown and the end of the fruit, and despite the processes involved in packing it in tin containers for being made available in the market, remains the same as pineapple, there is no 'consumption' of the commodity; nor any process of 'manufacture' of 'other goods'." This decision of the Kerala High Court was affirmed by the Supreme Court in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Pio Food Packers[1980] 46 S.T.C. 63 (S.C.).Their Lordships of the Supreme Court observed: "Section 5A(1)(a) of the Kerala General Sales Tax Act envisages the consumption of a commodity in the manufacture of another commodity. The goods purchased should be consumed, the consumption should b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in preparing pineapple slices from the original fruit, the commodity continues to possess its original identity, notwithstanding the removal of inedible portions, the slicing and thereafter canning it on adding sugar to preserve it......... In the result, we hold that when pineapple fruit is processed into pineapple slices for the purpose of being sold in sealed cans there is no consumption of the original pineapple fruit for the purpose of manufacture. The case does not fall within section 5A(1)(a) of the Kerala General Sales Tax Act. The High Court is right in the view taken by it." As pointed out by the Kerala High Court in its judgment, the most significant word occurring in section 7-A(1)(a) of the Act is the word "consumes". Ina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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