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TMI Blog2010 (1) TMI 1118X X X X Extracts X X X X X X X X Extracts X X X X ..... ay 13, 2008 for the assessment year 2003-04 by which the Tribunal has imposed tax on the assessee for the production of khal, which emerges at the time when ghani oil is produced. The questions of law referred are as under: "(A) Whether the Tribunal was justified in treating oil cake (khal), which is a byproduct of ghani oil covered by Notification No. 709 dated February 27, 1997 manufactured by the applicant registered under the U.P. Ghadi and Gramodyog Board, as not exempt from tax, even though exemption has been granted in earlier assessment years? (B) Whether a byproduct would also be exempt from tax, like the main product, as per G.O. dated August 13, 1996, since production of byproduct (oil cake) is covered within the definition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment for non-maintenance of the manufacturing register and violation of the provisions of section 12(2) of the Act. By this order, the assessing authority imposed Rs. 28,000 tax on sale of oil manufactured from oil expeller and Rs. 20,000 on sale of oil cake. The version of the assessee with regard to the non-availability of the stock of oil or oil cake was accepted by the authority. It is the assessee's case that he was exempted from paying tax on the sale of ghani oil by virtue of a Notification No. 2-709 dated February 27, 1997. It is the assessee's case that since he was granted an exemption for sale of ghani oil, its byproduct would also be exempt as per circular No. 1498 dated November 16, 1993. It is the assessee's co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempted for reasons that byproduct only emerges when the main product is made. It cannot by itself become an item of manufacture. The learned counsel for the assessee has relied on a decision of this court in the case of Commercial Trade Tax, U.P. v. Royal Kala Sonpura, Varanasi reported in [2001] 19 NTN 432. This court also endorses the same view. Thus the questions A and B are answered. So far as the question C is concerned, the Tribunal has not shown any reason for coming to the conclusion that the assessee was manufacturing oil by way of expeller in the assessment year 2003-04. It is simply based on presumption that because in the assessment year there was expeller, which has been used. With regard to the question No. D for use of d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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