TMI Blog2008 (7) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... made by RAMESH RANGANATHAN J. This revision is preferred against the order of the Sales Tax Appellate Tribunal (STAT), Hyderabad in T.A. No. 642 of 1993 dated December 12, 1994. The petitioner is a dealer carrying on business in bone meal at Khammam. The Commercial Tax Officer, by order dated March 20, 1989, completed assessment for the year 1986-87 determining the net turnover of the assessee at Rs. 1,96,636 duly granting him exemption on a turnover of Rs. 26,06,922.95. The said order was revised by the Deputy Commissioner (Commercial Taxes) and the turnover relating to bones, bone sinews and bone meal was brought to tax under section 6A of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as, the APGST Act ), on the ground that the aforesaid commodities, including crushed bones, were different from raw bones and that such purchases made from unregistered dealers were liable to tax. Aggrieved thereby, the petitioner herein preferred an appeal and the TAT, by its order dated December 12, 1994 following the judgment of this court in P. Subba Raju Company v. State of A.P. [1989] 72 STC 317; [1988] 7 APSTJ 116, rejected the appeal holding that bone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary to read these two provisions in juxta osition with section 6A of the APGST Act. (a) consumes such goods in the manufacture of other goods for sale or otherwise; or (b) uses or disposes of such goods in any manner other than by way of sale in the State; or (c) despatches them to any place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce, shall, whatever be the quantum of the turnover relating to such purchase for a year, pay tax on the taxable turnover relating to such purchase for the year at the rates mentioned in section 5. (a) consumes or uses such goods in or for the manufacture of other goods for sale or otherwise, or (b) disposes of such goods in any manner or other than by way of sale in the State, or (c) despatches or carries 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 pay tax on the turnover relating to the purchase as aforesaid at the rate mentioned in section 3 or 4, as the case may be. (ii) Purchases any goods (the sale or purchase of which is liable to tax under this Act) from a person other than a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STJ 116, wherein the assessee had purchased raw bones from unregistered dealers and, after drying the bones, had got them crushed in a mill and had sold the resultant products, that though the judgment of this court related only to bone meal and bone sinews, crushed bones, horns and hooves were also obtained from raw bones in the same manner in which bone meal and bone sinews were obtained and as such the observations made by this court applied equally to crushed bones, horns and hooves. The Tribunal held that when raw bones are crushed they are consumed to bring into existence different goods, namely, crushed bones, horns and hooves as well as bone meal and bone sinews, that such goods are different in commercial and common parlance, that raw bones lose their identity and get consumed and, in their place, new commodities such as crushed bones, bone meal, etc., emerge, that such new goods emerging from the consumed raw bones have higher utility than the raw bones which were consumed and they must be held as commercially different commodities from raw bones. As is evident from the table extracted hereinabove, section 5A of the Kerala General Sales Tax Act, section 7A of the Tamil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not also clear whether bone meal was separately treated from bones under the Madras Act. In A.A. Sulaiman [1997] 105 STC 324 (SC), the question which fell for consideration was whether a dealer, who had purchased dry bones and had converted them into bone meal for sale as such in the market, could be said to be liable to pay purchase tax. The Supreme Court observed that the question had already been resolved in favour of the assessee, and against the Revenue, by the decision of the Madras High Court in Subbaraj and Co. [1981] 47 STC 30 and this decision of the Madras High Court was holding the field since the Supreme Court had rejected the special leave filed questioning the correctness of the view taken in this case. The Supreme Court, in A. A. Sulaiman [1997] 105 STC 324, saw no reason to take a different view and affirmed the issue in favour of the assessee. It is true that dismissal of the special leave petition filed against the order of the High Court would not attract the doctrine of merger. (K.S Krishnaswamy v. Union of India [2006] 13 SCC 215). The judgment of the Division Bench of the Madras High Court, in Subbaraj and Co. [1981] 47 STC 30, therefore, cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court does not dismiss the special leave petition but, after granting leave, decides the appeal finally by recording reasons such order can be said to be a judgment to which article 141 of the Constitution applies. Likewise, the doctrine of merger also gets attracted. All orders passed by the courts/ authorities below, therefore, merge in the judgment of the Supreme Court (A.V. Papayya Sastry v. Govt. of A. P. [2007] 4 SCC 221). While the judgment of the Division Bench of this court in P. Subba Raju Company [1989] 72 STC 317; [1988] 7 APSTJ 116 would no doubt bind benches of coordinate jurisdiction, the subsequent judgment of the Supreme Court in A.A. Sulaiman [1997] 105 STC 324, affirming the judgment of the Madras High Court in Subbaraj and Co. [1981] 47 STC 30, would necessitate the latter, and not the judgment of this court in P. Subba Raju Company [1989] 72 STC 317; [1988] 7 APSTJ 116 being followed for it is well settled that the law declared by the Supreme Court binds all courts in India (Rajeswar Prasad Misra v. State of W. B. AIR 1965 SC 1887). It is well to remember that, on the law having been declared by the Supreme Court, it is the duty of the High Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be assailed on the ground that certain aspects were not considered or the relevant provisions were not brought to the notice of the Court [see Ballabhdas Mathuradas Lakhani v. Municipal Committee, Malkapur AIR 1970 SC 1002 and AIR 1973 SC 794 (sic)]. When the Supreme Court decides a principle it would be the duty of the High Court or a subordinate court to follow the decision of the Supreme Court. A judgment of the High Court which refuses to follow the decision and directions of the Supreme Court or seeks to revive a decision of the High Court which had been set aside by the Supreme Court is a nullity. (See Narinder Singh v. Surjit Singh [1984] 2 SCC 402 and Smt. Kausalya Devi Bogra v. Land Acquisition Officer [1984] 2 SCC 324 (emphasis Here italicised. supplied). The Madras High Court, in Subbaraj and Co. [1981] 47 STC 30, held tha raw bones purchased by dealers cannot be said to have been consumed in the process of bringing into existence crushed bones, bone meal, fluff, horns and hooves and consequently, with regards purchase of raw bones and the end-products which are sold locally, section 7A(1)(a) of the Tamil Nadu General Sales Tax Act (similar to section 6A of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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