Madras High Court
Sree Ramakrishna Cattle-Feed ... vs Commercial Tax Officer, No. I, ... on 19 November, 1987
ORDER Nainar Sundaram, J.
1. The petitioner has been carrying on business in rice bran, wheat bran, husk, dust of pulses and grams. The petitioner admittedly sells these goods, mixing them up, and as well as with an admixture of molasses and salt. According to the petitioner, these products will come within the purview of "exemption" from the sales tax accorded as per notification therefor. The primary Notification is dated 4th March, 1974, and it reads as follows :
"In exercise of the powers conferred by sub-section (1) of section 17 of the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959), the Governor of Tamil Nadu hereby makes an exemption in respect of the tax payable by any dealer under the said Act on the sale of -
(1) bangles (other than those made wholly or partly of any metal), (2) cattle feed, and (3) firewood."
There was an amendment to this notification on 23rd March, 1974, and the amendment notification reads as follows :
"In exercise of the powers conferred by sub-section (3) of section 17 of the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959), the Governor of Tamil Nadu hereby makes the following amendment to the Revenue Department Notification No. II(1)/Rev/386(g)/74, dated the 4th March, 1974, published in Part II - Section 1 of the Tamil Nadu Government Gazette, Extraordinary dated the 4th March, 1974 :-
AMENDMENT In item (2) in the said notification, for the expression 'cattle feed, and', the following shall be substituted, namely :- 'cattle feed, namely, rice bran or wheat bran, or husk and dust of pulses and grams, but excluding -
(i) brokens of pulses and grams,
(ii) oil-cakes, and
(iii) cottonseeds, and'."
Construing the question as to whether the cattle feed, consisting of a mixture of rice bran, pulses, husk and molasses and also a mixture of paddy husk with molasses will go out of the category of "exemption" as per the above notification, a Bench of this Court in State of Tamil Nadu v. M. Velmurugan (Tax Case No. 324 of 1979 and Revision No. 130 of 1979, order dated 18th September, 1980) held as follows :
"The cattle feed involved in this case consisted of a mixture of rice bran, pulses, husk and molasses, and also a mixture of paddy husk with molasses. In both these categories, molasses is the only material not specified in the Government Order dated 23rd March, 1974. However, molasses is merely a sweetening agent, and its addition will not change the character of the cattle feed as held by a Bench of this Court in T.C. No. 732 of 1977 (State of Tamil Nadu v. K. Ramachandran, judgment dated 4th January, 1978). In view of this, the Tribunal rightly held that the mixtures in question were entitled to exemption provided for by the Government in their order dated 23rd March, 1974 and therefore, the tax revision case is dismissed. There will be no order as to costs."
2. On 12th April, 1979, there had been a further amendment and the amendment notification runs as follows :
"In exercise of the powers conferred by sub-sections (1) and (3) of section 17 of the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959), the Governor of Tamil Nadu hereby makes the following amendment to the Revenue Department Notification No. II(1)/Rev/386(g)/74 dated the 4th March, 1974, published in Part II - Section 1 of the Tamil Nadu Government Gazette, Extraordinary, dated the 4th March, 1974, as subsequently amended :-
AMENDMENT. - In the said notification, for item (2), the following item shall be substituted, namely :- '(2) hay or straw, green grass, rice bran, wheat bran and husk and dust of pulses and grams'."
3. The petitioner was first visited with a pre-assessment notice in respect of the goods which the petitioner markets in the manner noted above, on the ground they are not entitled to exemption and that is being put in issue in W.P. No. 13079 of 1986. Since this Court declined to continue the stay granted in that writ petition, proceedings for assessment have been prosecuted, and presently an assessment order has come to be made by the second respondent and that is being put in issue in W.P. No. 4965 of 1987. The second respondent, who has passed the order of assessment impugned in W.P. No. 4965 of 1987, has declined to grant the exemption to the petitioner on the grounds that the goods marketed by the petitioner are mixtures of the concerned commodities and further they have and admixture of molasses and salt and they could not have the benefit of the exemption as per the amendment on 12th April 1979.
4. Mr. S. Ramalingam, learned counsel for the petitioner, would say that the amendment on 12th April, 1979, has not in any way altered the ratio laid down by this Court in the earlier pronouncements and it still holds good and if it is applied, the petitioner is entitled to exemption in respect of the goods from sales tax liability. Mr. R. Lokapriya, Government Advocate (Taxes) would submit that the amendment on 12th April, 1979, has, in fact altered the position in that rice bran, wheat bran and husk, etc., will have the benefit of the exemption only if they are sold separately and further without an admixture of molasses and salt, and the rulings of this Court referred to above cannot be invoked by the petitioner to have the benefit of the exemption. The amendment Notification dated 12th April, 1979, as we could see from the extract made above speaks about rice bran, wheat bran, husk and dust of pulses and grams, apart from hay or straw and green grass. The expressions "cattle feed" occurring earlier have been omitted. But the commodities enumerated even earlier remain the same, except for additions of hay or straw and green grass. The exclusions set out earlier have been omitted. This is all the implications of the amendment. The ruling of this Court extracted above has countenanced mixtures of the commodities as being entitled to the exemption and has further held that the admixture of molasses could not be held to have changed the character of the commodities. The amendment on 12th April, 1979, could not be stated to have altered the position, and the ratio of this Court on the point must be held to be still applicable. By virtue of the mixtures of the commodities or by an admixture of molasses or salt or both with them, there is no exclusion as such, of the above commodities from the exemption expressed even in the amendment Notification dated 12th April, 1979. Admixture of molasses or salt or both does not matter, since by such admixture the character of the original commodity or commodities is not changed, and that is also not the case of the respondents. The rigour of the earlier rulings of this Court certainly applies to the present case and the view of the second respondent, which view is also being advanced by the learned Government Advocate (Taxes) that the amendment Notification dated 12th April, 1979, has altered the position is a misconception.
5. Learned Government Advocate would also say that the petitioner could as well resort to the statutory appellate remedy. Here, we find a case in respect of which the rulings of this Court squarely come to the rescue of the petitioner. As the impugned assessment order by the second respondent has come to be made in total ignorance of the rulings of this court, it will not be proper and fair to drive the petitioner to resort to the statutory appellate remedy, and that too at this stage. In this view, W.P. No. 4965 of 1987 is allowed. No costs. In view of the allowing of W.P. No. 4965 of 1987, which has served the purpose of the petitioner no independent order is necessary in W.P. No. 13079 of 1986 where only the pre-assessment notice is being impugned. In this view, W.P. No. 13079 of 1986 is dismissed. No Costs.
6. Writ Petition No. 4965 of 1987 allowed.
7. Writ petition No. 13079 of 1986 dismissed.