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TMI Blog2006 (9) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased from the unregistered dealers as first dealer under the provisions of the KST Act? Facts in brief are as under: Respondent is a dealer registered under the provisions of the Karnataka Sales Tax Act, 1957. The respondent is engaged in the manufacture of refined edible oil. For the assessment years 1998-99, 1999-2000, 2000-01 and 2001-02, the assessing authority has concluded the assessment levying purchase tax on URD purchase of soya bean seeds under section 6 of the Act and levied tax on de-oiled soya bean cake as first dealer and has determined the total and taxable turnover at Rs. 66,46,88,178, Rs. 18,29,28,139 for the assessment year 1998-99, Rs. 26,37,39,371, Rs. 11,66,26,740 for the assessment year 1999-2000, Rs. 32,47,46,741, Rs. 12,53,70,651 for the assessment year 2000-01, Rs. 55,08,38,397 and Rs. 24,73,94,059 for the assessment year 2001-02, respectively. These assessment orders were challenged before the first appellate authority and the first appellate authority allowed the appeal in part for the assessment year 1998-99 and dismissed the appeals preferred against the assessment orders for the assessment years 1999-2000, 2000-01 and 2001-02 confirming that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho in the course of his business purchases any taxable goods in circumstances in which no tax under section 5 is leviable on the sale price of such goods, and (i) either consumes such goods in the manufacture of other goods for sale or otherwise or consumes otherwise, or disposes of such goods in any manner other than by way of sale in the State, or (ii) despatches them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce, shall be liable to pay tax on the purchase price of such goods at the same rate at which it would have been leviable on the sale price of such goods under section 5." The sum and substance of section 6 is that in the event of consumption of purchased goods, the purchase tax is leviable. Admittedly, in the case on hand, soya bean seeds are purchased and the same are used for the purpose of extraction of oil. After extraction of oil, it is seen that soya bean cake/extraction is available. The Tribunal holds that no tax is leviable. Case laws are not wanting in this regard. The Madras High Court in Deputy Commissioner of Commercial Taxes v. R. Kuppuswamy Chettiar [1976] 38 STC 587 has chos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing, germinate. An article which while being a seed is capable also of yielding oil can be described as an "oil-seed". The Supreme Court has considered "manufacturing" in Aspinwall and Co. Ltd. v. Commissioner of Income-tax [2002] 125 STC 101; [2001] 251 ITR 323, in paras 13 and 14 (1) of its order as under: "13. The word 'manufacture' has not been defined in the Act. In the absence of a definition of the word 'manufacture' it has to be given a meaning as is understood in common parlance. It is to be understood as meaning the production of articles for use from raw or prepared materials by giving such materials new forms, qualities or combinations whether by hand labour or machines. If the change made in the article results in a new and different article then it would amount to a manufacturing activity. 14.. This court while determining as to what would amount to a manufacturing activity held in Deputy Commissioner of Sales Tax (Law) v. Pio Food Packers [1980] 46 STC 63 (SC); [1980] Supp SCC 174, that the test for determination whether manufacture can be said to have taken place is whether the commodity which is subjected to the process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use. In the case on hand, State would contend that the decision of the Supreme Court in Berger Paints India Ltd. v. Commissioner of Income-tax [2004] 266 ITR 99, stands on a different footing and certain material aspects were not brought to the notice of the Tribunal. It was a case of default and in that situation, the State cannot be prevented from challenging the subsequent decision in the light of better facts as has been done in the case on hand. The dictum of the Supreme Court in Berger Paints India Ltd. v. Commissioner of Income-tax [2004] 266 ITR 99 is not applicable to the given situation. Sri Lakshmi Coconut Industries v. State of Karnataka [1980] 46 STC 404 (Karn), is pressed into service with regard to the acceptance of soya bean seed as being not different from soya bean cake. We have carefully seen the said judgment. That was a case in which the court was considering the issue as to whether the "desiccated coconut" prepared out of coconut purchased within State after paying tax would not be liable to Central sales tax on the sales turnover under section 8 of the Central Act. The court noticed the entry "oil-seed" for the said purpose in the said c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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