TMI Blog1982 (3) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1957 (hereinafter referred to as the State Act), after the amendment of the Central Sales Tax Act by Act No. 103 of 1976, which came into force with effect from 7th September, 1976. While the petitioners contend that items 144 and 147 of the First Schedule no longer have any legs to stand, the respondents contend that the position remains unchanged: The main contention advanced on behalf of the petitioners is that ravva and rice are one and the same commodity. Ravva is nothing but granulated rice or rice made into small particles. No manufacturing process is involved. No new substance is added and since rice was included in section 14 of the Central Sales Tax Act (hereinafter called the Central Act) as one of the declared goods by the Central Sales Tax (Amendment) Act (103 of 1976) with effect from 7th September, 1976, the levy of tax by the State is subject to the restrictions contained in section 15(a) of the Central Act which says that the tax payable under the State law in respect of any sale or purchase of such goods inside the State shall not exceed four per cent of the sale or purchase price thereof, and such tax shall not be levied at more than one stage. Hence the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th September, 1976. Prior to 7th September, 1976, they were subject to tax at the rates mentioned and as per the conditions laid down in the respective entries relating to these commodities in the First Schedule under section 5(2) of the State Act. In respect of declared goods, under section 15(a) of the Central Sales Tax Act, the State can impose sales tax on the sale or purchase subject to certain restrictions, namely, that the tax payable shall not exceed four per cent and cannot be levied at more than one stage. This provision is introduced to be in conformity with the restrictions contemplated under article 286(3) of the Constitution of India. The resultant position is that rice, wheat, gram and gulab gram cannot be taxed at the rate of more than four per cent and at more than one stage with effect from 7th September, 1976. Consequent on the amendment of the Central Act specifying these commodities as goods of special importance they were included in the Third Schedule to the State Act, the caption of which is "Declared goods in respect of which a single point tax only is leviable under section 6" of the State Act as items 15, 16 and 22 which say tax shall be levied at the rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined out of iron and steel. By a reading of section 14 we have no hesitation in holding that it is only the goods that are mentioned by name in section 14 are declared goods and not any other commodity or any other goods made or obtained from out of that commodity. Parliament intended that the items mentioned therein are the only goods of special importance. Otherwise, they would have mentioned rice in all its forms or wheat in all its forms just as they said in the case of other goods. Even from the view-point of goods of special importance in inter-State trade and commerce, one differs from the other in essential aspects. Take for instance, rice and wheat. They constitute the chief item of consumption as food in most of the parts of the country-rice particularly in the south and wheat in other parts, whereas ravva which is made out of these commodities is not used for consumption as regular food but for making some preparations to be eaten occasionally. Ravva is not used for preparing food for regular consumption. So also gram is used for several purposes whereas fried Bengal gram is essentially used for making chutney and occasional munching. Their value as items of constant u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not so treated. From this decision it is clear that one of the tests is whether in commercial parlance the commodity is treated as one and the same. In this case, the Madras High Court relied upon two decisions, namely, City Oil Mill v. joint Commercial Tax Officer [1970] 25 STC 33 and Avadh Sugar Mills Ltd. v. Sales Tax Officer [1973] 31 STC 469 (SC). In State of Tamil Nadu v. Syam Steel Rolling Mills (P.) Ltd. [1977] 40 STC 156 a question arose whether purchase of M.S. rounds after paying tax and sale after conversion into M.S. angles and M.S. squares were again liable to tax or whether they are entitled to the benefit of single point tax. In considering this question a Division Bench of the Madras High Court held that for the purpose of enjoying the benefit of single point taxation, the article must retain its identity as a commercial commodity. Once that identity is lost and a different commercial commodity emerges as a result of a manufacturing or any other process, then the resultant commodity cannot be said to be the same commodity as the one from which it resulted, and therefore, a dealer cannot claim exemption from tax in respect thereof on the ground that the orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m paddy that has met tax under this Act" and relied upon the meaning of paddy as contained in the dictionary as "rice in the husk" and held that when it was converted into parched rice and puffed rice, it is only a process of converting rice grain into a different form of it by heating or parching. In that connection, the learned Judges held that the process of heating or parching does not convert them into separate items for the purposes of entry 66 in the First Schedule to the Act. In that case, the question of interpretation of the provisions of the Central Act had not arisen as in the present case. Up to 7th September, 1976, rice as well as ravva and fried Bengal gram were separate entries, namely, 144 and 147, and are taxable at the rates mentioned in the First Schedule. It was only after 7th September, 1976, rice was removed from the First Schedule and included in the Third Schedule, as rice, wheat, and gram became declared goods under section 14 of the Central Sales Tax Act in respect of which a single point tax is only leviable under section 6 of the State Act. In Tungabhadra Industries Ltd. v. Commercial Tax Officer [1960] 11 STC 827 (SC) the question was whether hydroge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clared goods under section 14 of the Central Act. Section 15(d) of the Central Act which was referred to by the Madras High Court, in our opinion, shows a contrary intention. Section 15(d) says that each of the pulses referred to in clause (vi-a) of section 14, whether whole or separated and whether with or without husk, shall be treated as a single commodity for the purposes of levy of tax under the law. While taking care to mention that pulses whole or separated, husked or dehusked should be treated as a single commodity, the section does not mention about fried dhall. For all the above reasons, we hold that entries 144 and 147 of the First Schedule to the State Act are intra vires and continued to hold good even after the Central Sales Tax Act is amended by Act No. 103 of 1976 with effect from 7th September, 1976. The commodities mentioned in items 144 and 147 cannot be considered as declared goods under section 14 of the Central Act and consequently section 6 of the State Act. has no application to the goods mentioned therein. In the result, the writ petitions and the T.R.C. are dissmissed, but in the circumstances without costs. Advocate's fee Rs. 100 in each. An oral ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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