State Taxation Tribunal - Rajasthan
Jaipur Oil Products Private Limited vs Commercial Taxes Officer on 10 June, 1997
Equivalent citations: [2003]133STC542(TRIBUNAL)
JUDGMENT
R.K. Nair (Technical Member).
1. This application for revision filed in the Rajasthan High Court under Section 15 of the Rajasthan Sales Tax Act, 1954 ("the RST Act") stood transferred to this Tribunal with the coming into force of Rajasthan Taxation Tribunal Act, 1995. It is directed against the judgment dated March 26, 1987 in Appeal No. 35/86/Jaipur of the Rajasthan Sales Tax Tribunal (as the Rajasthan Tax Board hereinafter referred to as "the Board", was then known).
2. The brief facts of the case are that the assessing authority (AA) made an assessment order dated June 6, 1985 for the assessment period July 1, 1979 to June 30, 1980 in which inter alia, he assessed the sale of Rs. 1,04,395 of rice bran by the assessee-petitioner which the assessee had taken to be exempt being cattle feed to be exigible to tax at three per cent. The AA did not accept rice bran to be cattle feed. The Deputy Commissioner, Appeals upheld the order of the AA on this point as did the Board by its impugned order.
3. Section 4(1) of the RST Act reads as under :--
"Section 4(1).--No tax shall be payable under this Act on the sale or purchase of any of the exempted goods if the conditions specified in column 3 of the Schedule are satisfied :"
4. Under item 9 of the Schedule appended to the RST Act cattle feed is exempt from tax. The entry reads as under :
schedule Sl. No. Description of goods Conditions and exceptions subject to which exemption is allowed.(1) (2) (3)
9.
Cattle feeds, excluding gowar, cotton-seeds and oil-cakes.
5. Notification No. F.4(67) FD Gr.IV/76-23 dated September 8, 1976 issued by the State Government under Section 5 of the RST Act in so far as relevant reads :--
"In exercise of the powers conferred by Section 5 of the RST Act, 1954, and in supersession of all previous notifications issued in this behalf under this section, the State Government hereby notifies that with immediate effect the rate of tax payable by a dealer in respect of the goods specified in column 2 of the list annexed hereto shall be as shown against them in column 3 of the said list.
Sl. No. Description of goods Rate of tax (1) (2) (3)
1. Paddy, rice and wheat in all their forms including atta (flour) and bran thereof but excluding maida, suji, wheat-flakes and sewaiyan :
3% Provided that where tax has been levied in respect of paddy, the tax leviable on rice procured out of such paddy, shall be reduced by the amount of tax levied on such paddy."
Provided that where tax has been levied in respect of paddy, the tax leviable on rice procured out of such paddy, shall be reduced by the amount of tax levied on such paddy."
6. This notification was amended by Notification No. F.4(67) FD/Gr.IV/76-42 dated April 20, 1977 to add an explanation to the effect that "bran of rice" shall also include "rice polish".
7. The AA has determined the sales in question of rice bran to be exigible to tax under these notifications.
8. We have heard the learned counsel for the parties.
9. On behalf of the petitioner it was contended by the learned counsel that rice bran is a cattle feed and exempt under Section 4(1) of the RST Act and that a notification prescribing the rate of tax under Section 5 would not have overriding effect over an exemption granted to the sale of goods mentioned in the Schedule appended to the RST Act in terms of Section 4(1), RST Act. He cited [19781 42 STC 470 (All.) (Commissioner of Sales Tax v. Narain Das Barey Lal), [1990] 76 STC 10 (Mad.) (Sree Ramakrishna Cattle-feed Manufacturers v. Commercial Taxes Officer), and [1986] 61 STC 88 ; (1986) 16 STL 18 (Mahavir Industries v. Board of Revenue) in support.
10. On behalf of the respondent it was contended by the learned counsel that the Board had rightly held that rice bran was not "bhusi" or cattle feed and was therefore not exempt and cited [1975] 36 STC 440 (Commissioner of Sales Tax v. Naveen Traders), [1975] 36 STC 442 (Commissioner of Sales Tax v. Jamuna Prasad), [1975] 36 STC 445 (Commissioner of Sales Tax v. Dhanmamal Ram Gopal) (all of Allahabad High Court), [19781 42 STC 91 (sic) and [1991] 82 STC 258 (Raj) (Commercial Taxes Officer v. Udaipur Kukkut Utpadak Sahbari Samiti) in support.
11. In Commissioner of Sales Tax v. Naveen Traders [1975] 36 STC 440, Commissioner of Sales Tax v. Jamuna Prasad [1975] 36 STC 442, Commissioner of Sales Tax v. Dhannamal Ram Gopal [1975] 36 STC 445 the Allahabad High Court had matters before it which arose under the U.P. Sales Tax Act and more particularly under a Notification dated July 16, 1956 under which "cattle fodder including green fodder, chum, bhusi, chilka, chokar, cotton seed, gowar and oil-cake" were exempt from tax. In all the three cases the question that arose was whether rice bran was exempt under this notification being "bhusi", and it was held that rice bran was not "bhusi". These rulings are not relevant for our present purposes as the question whether rice bran was bhusi or not does not arise in the case in hand.
12. In Commissioner of Sales Tax, U.P. v. Narain Das Barey Lal [1978] 42 STC 470, a Division Bench of the Allahabad High Court had before it a matter in which the only question was whether rice bran was cattle fodder. It was held that it was. At page 471 of the report the Allahabad High Court said ;
"..............It cannot be denied that rice bran is primarily used for feeding cattle. The fact that a small portion of it is also used for extracting oil, will not alter the character of the commodity. It is a settled rule of interpretation that commodities have to be classified in accordance with their normal use, and words in a notification have to be interpreted as understood in -common parlance. As rice bran is used primarily for feeding cattle and, as in common parlance, it would be classified as a cattle fodder, it is not possible to take the view that it would go outside, the purview of cattle fodder only on account of the special use to which it was put by some consumers."
13. In Sree Ramakrishna Cattle-feed Manufacturers v. Commercial Taxes Officer [1990] 76 STC 10, a matter arose before the Madras High Court under the Tamil Nadu General Sales Tax Act, 1959 under which the State Government had exempted cattle-feed from tax under the Tamil Nadu General Sales Tax Act, 1959. The relevant entry in the notification was subsequently amended to read:
"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) cotton seeds, and."
Rice bran was cattle feed by definition. As a consequence the question that had earlier arisen before a Bench of the Madras High Court in State of Tamil Nadu v. M. Velmurugan (T.C. No. 324 of 1979, order dated 18th September, 1980) was whether cattle feed consisting of a mixture of rice bran, pulses, husk, and molasses and also a mixture of paddy husk with molasses would be exempt or not ? It was 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."
13.1. The notification granting amendment was further amended to substitute the entry cited above with :--
"hay or straw, green grass, rice bran, wheat bran and husk and dust of pulses and grams."
13.2 The question arose whether mixture of these commodities with an admixture of molasses and salt, would be exempt. It was held as follows :--
"............The amendment Notification........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.........."
13.3. It is quite clear that the Madras High Court was of the view that these commodities' original character including that of rice bran was as cattle feed and this had not undergone a change.
14. On the basis of these authoritative pronouncements it can safely be said that rice bran is a cattle feed.
15. The question of whether a rate of tax prescribed under Section 5, RST Act would override entry No. 9 in the Schedule of the Act came up before the Rajasthan High Court in Mahavir Industries v. Board of Revenue [1986] 61 STC 88 ; [1986] 16 STL 18 (Raj). In that case the matter pertained also to entry No. 9 of the Schedule, which, as has been seen, excludes gowar. By a Notification under Section 5, RST Act dated May 19, 1972, the State Government had prescribed the rate of tax applicable to inter alia, pulses (excluding moth but including gowar) in all their forms including "dal", "besan" and "bran" thereof under Section 5, RST Act. The question that arose was whether gowar churi or korma which are cattle feed was included in the gowar excluded in entry No. 9 of the Schedule and were taxable under the Notification on May 19, 1972. At page 21 of the report (page 92 of STC) it was held as follows :
"........it is clear that the fields of operation of Sections 4 and 5 of the Act are distinct and separate. The question before the Board and which has been canvassed before us is whether the word 'gowar' in entry 9 includes gowar churi or korma or not. The notification issued under Section 5 of the Act prescribing the rate of tax on gowar will not have overriding effect on entry 9 of the Schedule appended to the Act which deals with exemption. The notification on which reliance has been placed by the Board will not nullify entry 9 of the Schedule so far as the exclusion of 'gowar' from cattle feeds is concerned. As stated above the fields of operation of Sections 4 and 5 of the Act are altogether different................ We are of the opinion that the view taken by the Board in its order dated 16th October, 1984 on the basis of the notification dated 19th May, 1972, that gowar churi or korma is not exempt from payment of tax is erroneous in law......... we are of the opinion that gowar churi or korma is not included in gowar when gowar has been excluded from cattle feeds which are exempt from payment of sales tax." (emphasis* added) That is to say, it was held that the gowar churi or korma were exempt under entry 9 of the Schedule and could not be taxed under Section 5, RST Act. A notification under Section 5 cannot therefore be said to override the provisions of entries in the Schedule of the Act.
16. For the reasons given above the application for revision is accepted and it is declared that rice bran being cattle feed is exempt from tax under the RST Act and the orders of the subordinate authorities to the contrary are set aside with no order as to costs.