TMI Blog1987 (1) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... ieties of pan masala. On the basis of a "fraud report" of the Inspector of Commercial Taxes, Cuttack I Circle, a notice under section 12(4) of the Act was served upon the petitioner, and on verification of the documents of his business it was found that the commodity in question, namely, "baba zarda", was shown by him as a chewing tobacco under the tax-free sale. The Sales Tax Officer took the view that the article was "zarda" and as such was taxable. He accordingly included the turnover of sale of zarda in the taxable turnover and charged sales tax at the appropriate rate. The appeals filed by the petitioner before the Assistant Commissioner of Sales Tax and the Sales Tax Tribunal also failed, but on an application under section 24(1) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king it in jaggery water and adding flavouring essences to it, then the leaf is shredded and the shredded tobacco is then packed and labelled, it has undergone a process of manufacture which would change the nature of the commodity from chewing tobacco to zarda. The Tribunal has also looked to the product, and one file was also produced before us by Mr. Agarwala. Mr. Agarwala placed strong reliance on the case of the State of Madras v. Bell Mark Tobacco Co. [1967] 19 STC 129, a case which had gone to the Supreme Court from the Madras High Court (Bell Mark Tobacco Company v. Government of Madras [1961] 12 STC 126), where the question was as to whether the sale of chewing tobacco prepared from raw tobacco remained the same commodity as raw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her excise duty could be levied or not. This case, therefore, in my view does not help to solve the riddle before us. 5.. No case laying down the distinction between "zarda" and "chewing tobacco" was cited at the Bar. Undisputedly, tobacco is the basic commodity for manufacture of zarda which is prepared after treating the tobacco in various forms. Mr. Agarwala also referred to the cases of the State of Gujarat v. Sakarwala Brothers [1967] 19 STC 24 (SC), Porritts Spencer (Asia) Ltd. v. State of Haryana [1978] 42 STC 433 (SC) and the State of Orissa v. Satyabadi Sahu Sons [1982] 51 STC 75 (Orissa) in support of his point. In the first case, the question was as to whether patasa, harda and alchidana fall within the definition of "sug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties from tax under the Act. In those circumstances, it was contended on behalf of the dealer that since zarda is a tobacco product, it was exempted from tax within the purview of the said notification. It was observed by the court that "zarda, according to its dictionary meaning and in common parlance, is nothing but a variety of chewing tobacco. Having regard to the substantial percentage of tobacco contents, zarda can certainly be held to be a tobacco product ......... Referring to the definition of "tobacco" in the Central Excises and Salt Act, 1944, in the absence of its definition at any other place, it was held that it was very comprehensive to cover tobacco and all its products and thus zarda was not exigible to sales tax in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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