TMI Blog1988 (3) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) of the section requires that the goods in question should be transferred to some person otherwise than by way of sale. In this case, there was no evidence of any transfer at all, therefore, there was no 'disposal' of the goods as known to law. The High Court records that admittedly there was no transfer of the cashew shells, the lime shells or the consumed stores in this case. These were used by the assessee himself as fuel in the case of cashew shells for the maintenance of kiln. Sub-clause (b) of Section 5A(1) was, therefore, not applicable. In the background of the facts of this case, the High Court, in our opinion, was right. Appeal dismissed. - Special Leave Petition (Civil) No.8747-49 of 1987 - - - Dated:- 14-3-1988 - Sabyasa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed in clause (a), (b) or (c) of Section 5A of the Act were satisfied- 3. The assessee had also purchased during the relevant years in question, lime shell and certain stores described as consumed which had been used in the maintenance of the kiln and the factory. These purchases were also claimed as non-taxable in view of the conditions prescribed in clause (a), (b) or (c) of Section 5A of the Act, being not satisfied. The assessing authority and the First Appellate Authority overruled the contentions of the assessee and brought these purchases to tax under Section 5A(1) of the Act. 4. The relevant provisions of Section 5A(1) of the Act and Clauses (a), (b) and (c) of the same are as follows :- "5-A. Levy of purchase tax - (1) Every ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o no consumption of those goods in the manufacture of other goods for sale or otherwise. In this view of the matter the Tribunal held that these items were not taxable under Section 5A of the Act. 6. The revenue being aggrieved went to the High Court. The High Court upheld the decision of the Tribunal and rejected the Revenue's contention. 7. The construction of Section 5A of the Act came up for consideration before this Court in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Pio Food Packers [1980, Vol. 46 STC 63 = 1980 E.L.T. 343 (S.C.)]. That was a case dealing with pine apples sliced for being sold in sealed cans. It was held that there was no consumption of the original pine apple fruit for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduct. These have not been used as raw materials in the manufacture of the goods. These have been used only as an aid in the manufacture of the goods by the assessee. Consumption must be in the manufacture as raw material or of other components which go into the making of the end product to come within the mischief of the section. Cashew shells do not tend to the making of the end product. Goods used for ancillary purposes like fuel in the process of the manufacture, do not fall within Section 5A(1)(a) of the Act. Cashew shells, therefore, do not attract levy of tax under the said section. The same is the position with regard to the lime shell and consumed stores, which have been used only in the maintenance of the kiln and the factory not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough without reference to Ganesh Prasad's case (supra) in the passage set out hereinbefore in Deputy Commissioner of Sales Tax v. Pio Food Products (supra). The expression consumption otherwise must in the context mean consumption of other goods for purposes other than sale. 12. Another contention raised before the High Court was that the goods had been disposed of otherwise than by way of sale within the State and, hence, liable to tax by virtue of Section 5A(1)(b) of the Act. The question, therefore, is whether there is any disposal of these goods in any manner otherwise than by way of sale within the State. Disposal means transfer of title in the goods to any other person. The expression "dispose" means to transfer or alienate. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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