Balakrishna Eradi, J.
1. These two Tax Revision Cases raise a common question and have, therefore, been heard together.
2. The revision petitioners are registered dealers conducting trade in articles of footwear made of rubber. The petitioner in T.R.C. 65/66 has her place of business at Kottayam while the petitioner in T.R.C. 125/66 conducts his trade in Eranakulam. They were assessed to tax by the respective Sales Tax Officers in respect of the turnover relating to the sale of rubber chappals and it is the legality of the assessment of such turnover that is questioned before us in these two revision cases.
3. It is common ground that the petitioners purchased the two component parts which went to make the chappals, namely, the foam rubber soles and the strap mouldings from manufacturers within the State and that Sales Tax had been levied on the sales of such parts effected by the manufacturers to the petitioners
4. Under Section 5(vii) of the General Sales Tax Act, 1125 (Act 11/1125) which if the relevant statute governing these cases, the sale of goods specified in column (2) of Schedule I shall be liable to tax only at such single point in the series of sales by successive dealers as may be specified by the Government by notification in the Gazette; and, where the taxable point so specified is a point of sale, the seller shall be liable for the tax on the turnover for which the goods are sold by him at such point. The following goods are mentioned as Item No. 5 in Schedule I:--'Rubber products other than cycle tyres and tubes and rubber accessories of cycles' and the rate of tax in respect of them is specified as 7 per cent By Notification S R. O No. 100/62 the Government have specified the taxable point in respect of such goods as the point of first sale in the State by a dealer who is not exempt from taxation under Section 3(3) of the Act.
5. The contention of the petitioners is that what has been sold by them as chappal is a rubber product on which tax has been already levied at the point of first sale within the State namely, the sales to them of the soles and strap mouldings by the manufacturers and that therefore, the further sales effected by them of such rubber products are not liable to be taxed. In other words, their contention is that what has been sold by them as chappal is the same rubber product which has already been subjected to tax at the point of first sale within the State. The assessing authorities rejected this contention holding that even though the chap-pals sold by the petitioners were undoubtedly rubber products, they were not the same as the rubber products which had been previously subjected to tax at the point of first sale by the manufacturers. In the view of the assessing authorities, the finished product, namely the chappal, sold by the petitioners had a distinct commercial identity of its own, different from that of the soles and strap mouldings purchased by the petitioners and that therefore, it could not be said that the disputed turnover relating to sales of the same rubber product which had been purchased by the petitioners from the manufacturers under sales already subjected to tax. The assessing officers accordingly held that the sales of chappals effected by the petitioners were the first sales within the State of that particular commodity and were therefore, liable to be taxed. The assessments were confirmed by the Appellate Assistant Commissioners and also by the Sales Tax Appellate Tribunal whereupon the petitioners have approached this court by these Tax Revision Cases.
6. The learned counsel for the petitioners contended that the chappals sold by his clients being admittedly rubber products, they are covered by item 5 of the first schedule to the Act and that therefore, the turnover relating to the sales of chappals by his clients should not have been subjected to taxation since the sales effected by his clients were not the first sales of the particular goods within the State. The argument is that the chappal consists of only two component parts, namely, the rubber sole and the rubber strap moulding, both of which had been purchased by his clients under sales which had been subjected to tax, and that the mere fact that they fixed the strap on to the sole and sold the combination as chappal would not in any way, alter the identity of the articles so as to attract liability to tax. Counsel laid considerable stress on the fact that for attaching the strap to the sole no elaborate process of manufacture was necessary and that all that was involved in assembling the two parts was the application of a little physical pressure. It was, therefore, urged that the assessing officers and the appellate authorities were not justified in holding that what was sold by the petitioners as chappal was a rubber product different from what had been purchased by them as soles and strap mouldings.
7. Reliance was placed by counsel on the decision of the U. S. Supreme Court in East Texas Lines v. Frozen Food Express, (1956) 351 US 49=100 Law Ed. 917 in support of his contention that the soles and straps purchased by his clients cannot be regarded as having ceased to be the same rubber products even after they were assembled into chappals. Under Section 203(b)(6) of the Federal Motor Carrier Act, Motor vehicles used in carrying property consisting of agricultural commodities (not including manufactured products thereof) were exempted from the scope of the Regulatory provisions of PartII of the said Act subject to certain conditions. Construing this provision, the U.S. Supreme Court held that the exemption extends to vehicles carrying fresh or frozen dressed poultry. The court expressed the view that a chicken that has been killed and dressed still remains a chicken and that the removal of its feathers and entrails only made it ready for the market. On this ground, it was held that the processing which made a chicken marketable without changing its substantial identity did not turn it into a 'manufactured' commodity. In our view, this decision would, if at all, only help the petitioners to contend that the straps, the soles as well as the chappal are all rubber products, and would not advance their case any further. In fact, it is not disputed by the respondents that 'chappal' falls within the category of 'rubber products' and what is contended is only that it is not a rubber product in respect of which there has been an anterior transaction of sale by any dealer within the State liable to be assessed to Sales Tax. We find nothing in the aforesaid decision which would throw any light on the question as to whether the product sold by the petitioners as chappal can be said to be the same or identical commodity which they purchased separately as straps and soles from the manufacturers of these component parts.
8. The petitioners' counsel cited before us the rulings reported in Raghbir Chand Som Chand v. Excise and Tax Officer, (1960) 11 STC 149 (Punj.), Iyanar Coffee and Tea Co. v State of Madras, (1962) 13 STC 290 (Mad) and State of Madhya Bharat v. Hiralal, (1966) 17 STC 313=(AIR 1966 SC 1546). These decisions merely interpret and explain the scope and ambit of the words 'Cotton', 'Coffee' and 'Iron and Steel' occurring in the concerned statutes governing those cases and they are not therefore of any assistance to the petitioners.
9. Another decision relied on by the learned counsel for the petitioners is the ruling of our Supreme Court reported in Tungabhadra Industries Ltd. v. Commercial Tax Officer, (1960) 11 STC 827=(AIR 1961 SC 412) wherein it was held by their Lordships that hydrogenated groundnut oil continued to be 'groundnut oil' notwithstanding the processing which was done merely for the purpose of rendering the oil more stable. Their Lordships pointed out that the hydrogenated oil was extracted from groundnut and that even after hydrogenation no change had occurred in its essential nature and it remained an oil. In repelling the contention that by reason of the absorption of hydrogen atoms in the process of hardening involved in hydrogenation, and the consequent intermolecular changes, the identity of the substance was necessarily affected, their Lordships have observed thus at p. 835 (of STC)=(at p. 417 of AIR):
'Both the Tribunal as well as the High Court have pointed out that except for its keeping quality without rancidity and ease of packing and transport without leakage, hydrogenated oil serves the same purpose as a cooking medium and has identical food value as refined groundnut oil. There is no use to which the groundnut oil can be put for which the hydrogenated oil could not be used, nor is there any use to which the hydrogenated oil could be put for which the raw oil could not be used. Similarly we consider that hydrogenated oil still continues to be 'groundnut oil' notwithstanding the processing which is merely for the purpose of rendering the oil more stable thus improving its keeping qualities for those who desire to consume groundnut oil.'
If the test of user indicated by their Lordships is to be applied to the present case, it does not admit of doubt that the foam rubber sole or the strap moulding cannot by itself be used for the purpose for which 'chappal' is normally used. Going by this test therefore, the petitioners' contention that the commodity purchased by them as soles or straps and that sold by them as chappal are identical cannot stand.
10. In Hajee Abdul Shukoor and Co. v. State of Madras, (1964) 15 STC 719 (AIR 1964 SC 1729) the Supreme Court had to consider the question whether tanned hides and skins are different commodities from raw hides and skins and whether they could be validly treated as different goods for the purposes of the Madras General Sales Tax Act. Their Lordships answered the question in the affirmative on the ground that 'hides and skins in the untanned condition are undoubtedly different as articles of merchandise than tanned hides and skins.' Reference may also be made to State of Travancore-Cochin v. S V. C. Factory, (1953) 4 STC 205=(AIR 1953 SC 333) in which the Supreme Court held that raw cashewnuts become a different commodity commercially after the application of certain process as a result of which they are converted into edible kernels in Commissioner of Sales Tax v Jaswant Singh Charan Singh, (1967) 19 STC 469 = (AIR 1967 SC 1454) the Supreme Court, while affirming the decision of the Madhya Pradesh High Court that the word 'coal' occurring in entry 1 of Part III of Schedule II to the M.P. General Sales Tax Act, 1958 would include 'charcoal', has observed as follows at p. 473 (of STC = (at D 1457 of AIR).
'The result emerging from these decisions is that while construing the word 'coal' in entry 1 of Part III of Schedule II, the test that would be applied is what would be the meaning which persons dealing with coal and consumers purchasing it as fuel would give to that word A sales tax statute, being one levying a tax on goods must, in the absence of a technical term or a term of science or art, be presumed to have used an ordinaryterm as coal according to the meaning ascribed to it in common parlance. Viewed from that angle both a merchant dealing in coal and a consumer wanting to purchase it would regard coal not in its geological sense but in the sense as ordinarily understood and include charcoal in the term 'coal'. It is only when the question of the kind or variety of coal would arise that a distinction would be made between coal and charcoal; otherwise, both of them would in ordinary parlance as also in their commercial sense be spoken as coal.'
11. Thus, another test to be applied for determining whether the commodity purchased by the petitioners is the same as what has been sold by them is whether a person dealing in footwear or a consumer purchasing such goods would understand the word 'chappal' to mean either a sole or the strap by itself. Though the chappal is an article consisting of a combination of the strap moulding and the rubber sole, it is commercially distinct from these Darts or ingredients and has an identity of its own as a well-known variety of footwear. When the strap and the sole are combined and sold as chap-pal, the produce is a different entity and has a new identity.
12. There is also the further fact that the straps as well as the soles are commodities saleable as such in the market. The petitioner in T R C No. 125 of 1966 has himself effected several sales of cut-soles and straps as such during the assessment year in question and the relative turnover has been exempted from taxation on the ground that he is not the first seller in respect of those articles. It would thus be clear that the straps and the soles have a separate commercial identity of their own quite distinct from that of a chappal.
13. We are therefore, of the view that the turnover in dispute does not represent sales by the petitioners of the very same commodities which they had purchased from the manufacturers as soles or straps. The sales of chappals effected by the petitioners were first sales of the said goods within the State and were therefore rightly assessed to tax.
14. The Revision Petitions, therefore,fail and are accordingly dismissed with costs.