TMI Blog1983 (12) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... ption from the levy of tax only to "fertilizers, other than chemical fertilizers". According to the learned counsel "neem ki khali" cannot fall in the category of fertilizer and as such it cannot be exempted from levy of tax. The learned counsel contended that "neem ki khali" falls in the category of oil-cake and as such it would be covered by Notification No. ST-II-2995/X-6(7)-73 dated 3rd April, 1975, which was amended by Notification No. ST-II-8452/X-1(2)-75 dated 1st October, 1975, and as such purchase tax was liable to be paid at the rate of 4 per cent. Referring to these notifications learned Standing Counsel urged that the Tribunal legally erred in holding that no tax was liable to be charged on the aforesaid amount of the turnover of "neem ki khali". No one appeared on behalf of the assessee. I, however, requested Sri R.K. Gulati and Sri Bharatji Agrawal to agree and place relevant material so that proper decision may be arrived at on the undernoted question involved in the case: "Whether the Tribunal was legally justified in holding that there is no liability of tax on 'neem ki khali' (oil-cake of neem) being a fertilizer covered by Notification No. ST-3470/X dated 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to cattle fodder by Notification No. 2994/X6(7)-73 dated 3rd April, 1975, and it being made liable to pay tax by another notification of the same date cannot be construed to mean that "oil-cake" (khali) cannot be treated to be a cattle fodder. According to learned counsel, "oil-cake" (khali), which is used as cattle fodder, enjoyed exemption till 5th April, 1975, when it was made liable to pay tax in view of the aforesaid Notification No. 2995/X-6(7)-73 dated 3rd April, 1975, which became operative with effect from 5th April, 1975. Learned Standing Counsel further contended that in view of this later notification it is immaterial whether "oil-cake of neem" (neem ki khali) is capable of being used as cattle fodder or not because all "oilcake" (including de-oiled cakes) without any exception with regard to its variety, nature or quality and utility, have been made liable to tax. Thus, even if "neem ki khali" (oil-cake of neem) may not be found capable of being used as cattle feed, but even then it would be liable to tax. Learned counsel further contended that "oil-cake of neem" (neem ki khali) cannot be said to fall in the category of "fertilizer" so as to be treated as exempt fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orticulture. It is not used as cattle feed, except on occasions when it is administered as a curative to certain animal diseases. It's use as such cannot make it a cattle fodder. It is also common knowledge that all "oil-cakes" are not used as cattle feed and the "neem ki khali" is one falling in the exception. It is generally used as a "fertilizer" and would, therefore, be exempt from tax although it falls in the category of "oil-cake". In support of his argument that where there are two conflicting entries and the case of the assessee is covered by both entries, then the one granting exemption, which is more beneficial to assessee would be held to be applicable to it, the learned counsel referred to Diwan Rubber Industries v. Commissioner of Sales Tax (printed at page 329 infra) 1982 UPTC 618, in which it was held that "what could be the policy behind it and on what basis the classification in respect of goods has been made is not up for consideration but where there are two competing entries and manufacturer is covered by both then the entry granting exemption which is more beneficial to the assessee should be held applicable to it". In another case Commissioner of Sales Tax v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese, namely, "neem ki khali", would be exempt from tax being used as "fertilizers". It is well-settled that if once an exemption is granted under section 4 of the Act in respect of any class of goods or class of persons, then unless such exemption is withdrawn it shall remain in force. In the present case it is not disputed that Notification No. ST-3470/X dated 16th July, 1956, granting exemption to "fertilizers" has not yet been amended by excluding "oil-cake" from the ambit of said entry in the notification regarding "fertilizer". Similar questions cropped up for consideration before the Full Bench of the Punjab and Haryana High Court in Sheo Karan Dass Bhoj Raj v. State of Haryana [1974] 34 STC 94 (FB). Two questions arose in that case, firstly, whether on the basis of evidence it can be held that "oil-cake" is or is not fodder or "fertilizer" and secondly, whether on the facts and circumstances of the case "oil-cakes" fall within item 44 or 54 of Schedule B to the Act? It is to be noted that only "fertilizers" enjoyed exemption from tax, but while the aforesaid reference was pending for consideration before the High Court, the legislature intervened with an amendment exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... til 30th July, 1981, whereby ice-cream and ice-candy, kulfi, milk-shake and lassi were excluded from entry No. 10 granting exemption to milk and milk products. The question arose whether prior to the aforesaid amendment the notifications under section 4 of the Act would prevail over the notifications issued under section 3-A of the Act. It was held that "while on the one hand, section 3-A brings to tax 'ice-cream and lassi' sold to consumers, the notifications issued under section 4 grant exemptions to 'milk products' which on judicial interpretations include 'ice-cream and lassi'. It would, thus, appear that the transactions or sales which enjoy exemptions have to be included in the gross turnover, but they are exempted when the net turnover is calculated as there were notifications under section 4 of the Act. Even though ice-cream and lassi have been made taxable under section 3-A of the Act, but on account of the notifications issued under section 4 of the Act the turnover of these items could not be included in the net taxable turnover. Thus, the view taken by the revising authority that the sale of ice-cream was not taxable in view of the exemption granted under the notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is used as "fertilizer". All "oil-cakes" are resultant products received under the process of extracting oil contents of seeds or fruits of plants or trees having oil contents. The "oil-cakes" are brought in use in various ways. Certain varieties of "oilcakes" are used as cattle feed, like mustard oil-cakes, linseed oil-cakes, etc. It is generally known that "neem ki khali", because of its contents and smell, etc., is not used for cattle feed and it is generally used as manure. Although the process of production of "oil-cakes" of all varieties is the same and then reach the consumers through the same channel of distribution, but these are brought to use differently. If any particular variety of "oil-cake", namely, "neem ki khali", is capable of being used as "fertilizer" the same would be exempted from taxation being covered by the aforesaid Notification No. ST-3470/X dated 16th July, 1956, granting exemption to "fertilizers". But those "oil-cakes", which are not generally used as "fertilizers", but, are generally utilised as cattle feed, the same would be liable to tax being covered by Notification No. ST-II-2995/ X-6(7)-73 dated 3rd April, 1975. It is common knowledge that "neem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance in this revision. It is, accordingly, dismissed. I, however, direct the parties to bear their own costs. Appendix [The judgment of R.M. SAHAI, J., of the Allahabad High Court in Diwan Rubber Industries v. Commissioner of Sales Tax (S.T.R. No. 477 of 1981 decided on 3rd May, 1982) is printed below: ] DIWAN RUBBER INDUSTRIES V. COMMISSIONER OF SALES TAX SAHAI, J.-Sales Tax Tribunal, Meerut, while exercising jurisdiction under section 10 of the U.P. Sales Tax Act, allowed the application dated 27th January, 1978, of assessee filed before Assistant Commissioner (Assessment) for change in the recognition certificate granted under section 48 of the Act for assessment year 1977-78 by substituting words, "accessories and parts of bicycle" instead of "tyres and tubes". To appreciate the rival contentions it is necessary to quote the relevant Notification No. 7551 dated 31st December, 1976, and the entries in the annexure attached to it. "(1) No tax shall be payable on the sale to or, as the case may be, purchase by a 'new unit' in respect of 'raw materials' required by it for use in the manufacture of the goods mentioned in annexure I or for the packing of the said goods manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ......... 8..................... 9.................... 10. Tyres and tubes 11....................... 12....... to (24)..... Annexure II List of districts (1) Almora (2) Azamgarh (3) Bahraich (4) Ballia (5) Banda (6) Barabanki (7) Basti (8) Badaun (9) Bulandshahr (10) Chamoli (11) Deoria (12) Etah (13) Etawah (14) Faizabad (15) Farrukhabad (16) Fatehpur (17) Garhwhal (18) Ghazipur (19) Gonda (20) Hamirpur (21) Hardoi (22) Jalaun (23) Jaunpur (24) Jhansi (25) Lalitpur (26) Mainpuri (27) Mathura (28) Moradabad (29) Pilibhit (30) Pithoragarh (31) Pratapgarh (32) Rae Bareili (33) Rampur (34) Shajahanpur (35) Sitapur (36) Sultanpur (37) Tehri-Garhwal (38) Unnao (39) Uttar Kashi. Annexure III List of notified goods referred to in clause (2): 1.. Bicycles, tricycles, perambulators and accessories and parts thereof. 2......................... 3.........to (25)........" From a perusal of the two entries at serial No. 10 of annexure I and serial No. 1 of annexure III it is apparent that latter is specific in nature. Former may in absence of any specification apply to tyres and tubes of not only cycles but cars, scooters, etc. In sales tax if an item is covered both ..... X X X X Extracts X X X X X X X X Extracts X X X X
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