TMI Blog1991 (2) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... endment Act 18 of 1985. It is common case that such rice has not suffered sales tax but whether paddy from which it was extracted has suffered tax under the Act or not was considered irrelevant by the authorities. The facts in T.R.C. No. 26 of 1990 arising out of the Tribunal Appeal No. 264 of 1985 pertaining to the assessment year 1981-82 are considered as illustrative of the controversy. The assessing authority, viz., the Commercial Tax Officer, had brought to tax such "ravva" under item 144(a) of the First Schedule at 5 per cent. This was confirmed in appeal by the Deputy Commissioner. The Tribunal has taken the view that it is exigible under item 144(b) of the First Schedule at 1 per cent. This decision of the Tribunal is assailed bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em 59 of the First Schedule was omitted and a distinction was made between "ravva" extracted from wheat and "ravva" extracted from rice and maize. "ravva" extracted from wheat was separately numbered as item 60 of the First Schedule under which "ravva", maida and atta obtained from wheat that had met tax under the Act was taxable at 1 per cent, while these commodities extracted from wheat which has not met such tax were taxable at 4 per cent and the wheat itself was taxable at 3 per cent. The result was that "ravva" extracted from cereals other than wheat became taxable as general goods under section 5(1) of the Act at multiple points. Apparently, for this reason, the Government issued exemption notification under section 9 in G.O. Ms. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by item (b) At the point of 4 paise in the below first sale in the rupee. State. (b) Obtained from wheat, rice do. 1 paisa in the or maize, that has met tax rupee." under this Act. -------------------------------------------------------------------------- By Act 18 of 1985 which was enforced from July 1, 1985, item (b) of entry 144 of the First Schedule was amended as follows: "obtained from wheat, rice including paddy out of which rice is produced or maize that has met tax under this Act". As noticed earlier, the controversy is regarding the period prior to the amendment by Act 18 of 1985. However, for completing the narration of the history of rates of tax it is useful to notice that subsequently, by Act 4 of 1989 and G.O. Ms. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Central Sales Tax Act. It was at about this time that by the State Amendment Act 49 of 1976, as noticed earlier, "ravva" whether extracted from wheat, rice or maize was put as one entry, viz., 144 of the First Schedule. Again by the Third Amendment Act, that is, 59 of 1976, "ravva" extracted from wheat was deleted from item 60 of the First Schedule. The Third Schedule was also amended by adding the newly declared goods. We are concerned with entries 21 and 22 so introduced and explanation III which reads as follows: ---------------------------------------------------------------------------------- "21. Paddy (Oryza At the point of last purchase 4 paise in the sativa L): in the State. rupee. Provided that no tax shall be levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rice is extracted from paddy grown within the State and the paddy would have suffered tax at the point of its purchase. For practical purposes, no tax will be payable in respect of rice which is extracted from paddy, if paddy has suffered tax. "Ravva" is no doubt a distinct commercial commodity. It can be made from wheat, maize or rice extracted from paddy but not from paddy directly. A very small percentage of rice produced in the State is made into "ravva". Ignoring the circumstance whether paddy has suffered tax or not and insisting that rice must have suffered tax for determining the exigibility to tax of "rice ravva" is apparently irrational. If this background is kept in view, we can understand the intention and language of the second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he judgment of the Tribunal as noticed earlier. Though the Tribunal has held that the G.O. to be not applicable, as there has been a subsequent change of the taxability from section 5(1) to section 5(2) of the Act, the circumstance that the Government have rescinded it after the appeal is disposed of also indicates that there was an assumption that the benefit of the G.O. was still available. Without going into the aforesaid controversy about the rescinding of G.O. in 1988 it has to be held that taxation on "ravva" made from rice after introduction of item 144(b) by Act 49 of 1976 was only 1 per cent, if the rice or paddy had suffered tax and the subsequent legislations are only clarificatory in nature. The conclusion of the Tribunal is, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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