TMI Blog2008 (1) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... nataka Sales Tax Act, 1957, dated March 10, 2005. The petitioner is a public limited company registered under the Companies Act, 1956. The petitioner-company, during the assessment year 1997-98, had purchased raw coffee from grower, unregistered dealer and registered dealer. It has also purchased cured and uncured coffee. The petitioner after purchasing berries got cured the same through a private curer and exported the coffee so purchased by it to a foreign buyer based on order placed by a foreign buyer. Thereafter, the assessee filed the return claiming exemption under section 5(3) of the Central Sales Tax Act. The return filed by the assessee/petitioner was accepted by the assessing officer. Thereafter the Joint Commissioner of Commercial Taxes exercising his power under section 21(2) of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as, the KST Act ) reopened the assessment, on the ground that the order of the assessing officer is prejudicial to the interest of the State and held that the petitioner is not entitled to claim exemption under section 5(3) of the Central Sales Tax Act, 1956 (hereinafter referred to as, the CST Act ) in regard to the coffee beans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Second Schedule of the KST Act has wrongly held that the coffee berry purchased by the petitioner and exported after curing are totally different commodities and that the assessee is not entitled to claim exemption due to curing of the berry purchased. According to him, curing of the berry cannot be treated as a manufacturing process while considering the exemption to be granted to the assessee in view of the entry 18 of Part C of the Second Schedule of the KST Act. To support his view he has relied upon the judgment of the apex court in State of Punjab v. Chandu Lal Kishori Lal and State of Punjab v. Krishna Cotton, Dal and Oil Factory reported in [1970] 25 STC 52. He also relied upon the judgments of the apex court in the Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Pio Food Packers reported in [1980] 46 STC 63 and Sterling Foods v. State of Karnataka reported in [1986] 63 STC 239. Relying upon these three judgments, he contends that the revisional authority as well as the Tribunal have committed a serious error in not granting exemption to the assessee by relying upon the decision of the apex court in Aspinwall and Co. Ltd. v. Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aler. It is also not in dispute that the assessee has purchased two varieties of coffee, i.e., cured and uncured coffee. It is also not in dispute that the coffee, uncured and cured coffee, purchased by the assessee have been exported by it pursuant to an order placed by a foreign buyer. It is also not in dispute that if the coffee purchased by an assessee has been exported pursuant to a foreign order to a foreign buyer, such coffee is exempted from payment of tax under section 5(3) of the CST Act, but the only dispute is in regard to the nature of coffee purchased and the nature of coffee exported by the assessee. If the coffee purchased and exported by the assessee are one and the same, then we have to answer the question of law in this petition in favour of the assessee and against the Revenue. In the circumstances we have to examine the nature of coffee purchased and the nature of the coffee exported by the assessee. In order to levy tax under section 5(3)(a) of the KST Act, entry 18 of Part C of the Second Schedule of the KST Act deals with the nature of coffee taxable under the Sales Tax Act which is extracted as hereunder: Coffee, that is to say, (i) Coffee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held: (at page 240) The question whether raw shrimps, prawns and lobsters after suffering processing retain their original character or identity or become a new commodity has to be determined not on the basis of a distinction made by the State Legislature for the purpose of exigibility to State sales tax (e.g. entry 13a of Schedule III to the Karnataka Sales Tax Act, 1957) because even where the commodity is the same in the eyes of the persons dealing in it the State Legislature may make a classification for determining liability to sales tax. This question, for the purpose of the Central Sales Tax Act, has to be determined on the basis of what is commonly known or recognised in commercial parlance and further held that the purchase of raw shrimps, prawns and lobsters by the appellant for the purpose of fulfilling existing contracts for export were exempt from purchase tax under the deeming provision of section 5(3) of the Central Sales Tax Act, 1956, even though after making such purchase the appellant subjected them to the process of cutting heads and tails, peeling, deveining, cleaning and freezing before export because they remained the same goods in commercial parlance af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Punjab v. Krishna Cotton, Dal and Oil Factory reported in [1970] 25 STC 52. In Aspinwall's case [2002] 125 STC 101 (SC); [2001] 251 ITR 323 (SC) their Lordships have not considered the judgment rendered by the Supreme Court in State of Punjab v. Chandu Lal Kishori Lal and State of Punjab v. Krishna Cotton, Dal and Oil Factory reported in [1970] 25 STC 52 since there was no occasion for their Lordships to consider the case as their Lordships were dealing with the provisions of section 32A of the Income-tax Act. Therefore, the judgment delivered by their Lordships in Aspinwall's case [2002] 125 STC 101 (SC); [2001] 251 ITR 323 (SC) is under a different context and it has no bearing on the facts of the case. Considering the Aspinwall's case [2002] 125 STC 101 (SC); [2001] 251 ITR 323 (SC), we are of the opinion that the Tribunal as well as the revisional authority was not justified in modifying the order of assessment passed by the assessing officer as there is no change in the product even after curing the uncured coffee. Therefore, in the light of entry No. 18 of the Second Schedule of the KST Act, we are of the opinion that, whether the coffee is purchased by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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