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TMI Blog2002 (9) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... e business as Indian Drugs Merchants. In the assessment under the Act for the year 1992-93 the assessee claimed exemption on the sales turnover of "sugar candy". The assessee's contention that "sugar candy" is an item falling in category of sugar under entry 56 of the Third Schedule to the Act was not accepted by the assessing authority. Assessee's appeal before the first appellate authority was unsuccessful. However, the Tribunal by order dated July 23, 1997 in T.A. No. 49 of 1996 allowed the appeal of the assessee holding that "sugar will include sugar candy" and therefore, it is exempted from payment of sales tax under entry 56 of the Third Schedule to the Act. 3.. The learned Government Pleader appearing for the revision petitioner sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is necessary to refer to the relevant provisions of the Act and also the relevant provisions of the Central Excise Tariff Act to which reference is made in entry 56 of the Third Schedule to the Act. Entry 56 of the Third Schedule to the Act reads as follows: "Sugar covered under sub-heading 1701.20, 1701.31, 1701.39 and 1702.11 of the Schedule to the Central Excise Tariff Act, 1985" (Central Act 5 of 1986). Chapter 17 of the Central Excise Tariff Act deals with "sugar and sugar confectionery". Paragraph 2 of the said chapter reads as follows: "For the purpose of sub-heading Nos. 1701.10, 1701.20, 1701.31 and 1701.39, 'sugar' means any form of sugar in which the sucrose content, if expressed as a percentage of the material dried to con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alchidana" are not commercially known as and cannot be asked for or obtained as sugar. Entry 47 of Schedule A to the Bombay Sales Tax Act, 1959 reads as follows: "Sugar as defined in item 8 of the First Schedule to the Central Excises and Salt Act, 1944." Item 8 defines sugar: "sugar means any form of sugar containing more than 90 per cent of sucrose". The Gujarat High Court observed that the Advocate-General was right when he says that the articles known as patasa, harda and alchidana bear a distinct and different name for sugar and are not commercially purchased or sold as sugar. The High Court, however, observed as follows: "The Legislature in entry 47, does not use the word sugar simpliciter. It has in terms stated that what is covere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid stress on the argument that patasa, harda and alchidana were sweets used on festive occasions. But this circumstance has no relevance on the question of legal classification for the purpose of the Bombay Sales Tax Act. On the other hand, it appears from the judgment of the Tribunal that it is possible to convert these articles into sugar by dissolving them in water and by subjecting the solution to an appropriate process. It is stated by the Tribunal that these articles can be put to the same use to which sugarcandy can be put. It is, therefore, manifest that patasa, harda and alchidana are only different forms of refined sugar with the requisite sucrose contents. It is argued by Mr. Bindra that the phrase 'any form of sugar' referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sugar candy. The said question has to be considered only in the light of the provisions of the Central Excise Tariff Act which we have already extracted above. 8.. Thus the only question to be considered is as to whether "sugar candy" dealt with by the respondent contains more than 90 per cent sucrose content. In the instant case, the Tribunal has found that the sugar candy dealt with by the assessee satisfied the definition of sugar in clause 2 of Chapter 17 of the Central Excise Tariff Act. We do not find any illegality in the order of the Tribunal. However, the Government Pleader appearing for the revision petitioner, as already noted, relied on the decisions reported in Una Subba Rao v. State of Orissa [1986] 61 STC 49 (Orissa), Kaype ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 86 of List C goods subject to sales tax the claim of exemption pleaded was rightly rejected. A Division Bench of the Karnataka High Court in Praveen Corporation v. Commissioner of Commercial Taxes [1997] 107 STC 614 reversing the judgment of the Single Bench reported in [1997] 107 STC 290 which held the view that "sugar candy" is not "sugar" under entry 31-B of the Fifth Schedule to the Karnataka Sales Tax Act held that sugar candy made from sugar contains more than 90 per cent of sucrose and therefore it definitely falls within the statutory definition of sugar as set out for the purpose of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and the Central Excise Tariff Act, 1985. It was accordingly held that sugar c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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