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Commissioner of Sales Tax Vs. Jayantilal Mannilal - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case NumberM.C.C. No. 154 of 1980
Judge
Reported in[1983]52STC188(MP)
AppellantCommissioner of Sales Tax
RespondentJayantilal Mannilal
Appellant AdvocateS. Kulshrestha, Deputy Government Adv.
Respondent AdvocateS.C. Goyal, Adv.
Cases ReferredEranakulam v. Pio Food Packers
Excerpt:
.....of the conditions for claiming exemption was that the assessing authority should be satisfied that there was no change in the form or identity of the goods at the time of their sale in the course of inter-state trade or commerce and that the goods had already been subjected to tax under the state act......claimed in respect of sale of tamarind worth rs. 34,320 on the ground that it was in the course of inter-state sale and that tamarind was purchased from registered dealers in the state after payment of tax under the state act. the assessing authority held that though tamarind was purchased after payment of tax, yet no exemption could be allowed as tamarind was sold in the course of inter-state trade after separating the seeds and hence it could not be said that tamarind was sold in the same condition. the appeal against this order was dismissed by the deputy commissioner of sales tax. on further appeal, however, the board held that the applicant was entitled to claim exemption as there was no change in the form and identity of goods. aggrieved by this order, the department sought a.....
Judgment:

G.G. Sohani, J.

1. By this reference under Section 44 of the M. P. General Sales Tax Act, 1958, the Board of Revenue has referred the following question of law to this Court for its opinion :

Whether, in the facts and circumstances of the case, the Tribunal was justified in holding that tamarind and tamarind flower are not different commodities

2. The material facts as set out in the statement of the case briefly are as follows :

The assessee deals in kirana goods and foodgrains and was assessed to sales tax under the Central Act for the year 1969-70. Exemption was claimed in respect of sale of tamarind worth Rs. 34,320 on the ground that it was in the course of inter-State sale and that tamarind was purchased from registered dealers in the State after payment of tax under the State Act. The assessing authority held that though tamarind was purchased after payment of tax, yet no exemption could be allowed as tamarind was sold in the course of inter-State trade after separating the seeds and hence it could not be said that tamarind was sold in the same condition. The appeal against this order was dismissed by the Deputy Commissioner of Sales Tax. On further appeal, however, the Board held that the applicant was entitled to claim exemption as there was no change in the form and identity of goods. Aggrieved by this order, the department sought a reference and it is at the instance of the department that the aforesaid question of law has been referred to this Court for its opinion.

3. It was not disputed before us that one of the conditions for claiming exemption was that the assessing authority should be satisfied that there was no change in the form or identity of the goods at the time of their sale in the course of inter-State trade or commerce and that the goods had already been subjected to tax under the State Act. It has been found that the sale by the assessee of tamarind in question, was in the course of inter-State trade in the State. The claim for exemption was, however, rejected by the assessing authority on the ground that there was change in the identity of the goods as seeds were removed from the tamarind before it was sold in the course of inter-State trade. The short question for consideration, therefore, is whether removal of seeds from tamarind amounts to change in the identity of the tamarind. In this connection, we may usefully refer to the decision of the Supreme Court reported in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Eranakulam v. Pio Food Packers [1980] 46 STC 63 (SC). The question in that case was whether processing of pineapple fruits into pineapple slices for being sold in the sealed cans amounted to consumption of pineapple fruits for the purpose of manufacture. The Supreme Court held that there was no essential difference between pineapple fruit and the canned pineapple slices, and that though sliced pineapple was a presentation of fruit in a more convenient form, the pineapple slices must be held to possess the same identity as the original pineapple fruit. The Supreme Court held that although a degree of processing is involved in preparing pineapple slices from the original fruits, the commodity continues to possess its original identity, notwithstanding the removal of inedible portions. In view of this decision, it must be held that even after removal of seeds from tamarind, the Board was justified in holding that the goods possessed the same identity and that there was no change in the identity or form of the goods at the time of their sale in the course of inter-State trade or commerce.

4. For all these reasons, our answer to the question referred to us is in the affirmative, against the department. In the circumstances of the case, parties shall bear their own costs.


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