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"It appears that the residual oil becomes unfit for human consumption due to oxidative charge because of which the rancidity increases to a considerable extent. The fact that nothing is done to arrest this process will not change the character of the commodity. If it was groundnut oil to start with, it none the less remained groundnut oil even though because of the increased rancidity it may become unfit for human consumption.

Groundnut oil is generally used both for human consumption as well as for manufacture of soaps. If because of the oxidation process, it ceases to be available to one of its general use but is none the less still usable for manufacture of soaps, the mere circumstances that it has become non-edible will not change its nature or character as a commercial commodity. It does not, in our opinion, become an oil other than groundnut Oil."

16. In TUNGABHADRA INDUSTRIES LIMITED v. COMMERCIAL TAX OFFICER, 11 (1960) STC 827 the Supreme Court considered whether hydrogenated groundnut oil was 'groundnut oil'. The Supreme Court observed:

"It is this oxidative change and particularly the conversion into aldehydes that is believed to be responsible for the sharp unpleasant odour, and the characteristic taste of rancid oil. If nothing were done to retard the process the rancidity may increase to such an extent as to render it unfit for human consumption. The change here is both additive and inter-molecular, but yet it could hardly be said that rancid groundnut oil is not groundnut oil. It would undoubtedly be very bad groundnut oil but still it would be groundnut oil and if it does not seem to accord with logic that when the quality of the oil is improved in that its resistance to the natural processes of deterioration through oxidation is increased, it should be held not to be oil."

(emphasis supplied)

17. The above decisions make it clear 'edibility' or suitability for human consumption is not necessarily a relevant Criterion. A 'cereal' or 'fish' or 'vegetable oil' continues to be a 'cereal' or 'fish' or 'vegetable oil' even if it had become 'bad' and 'inedible' on account of chemical action or reaction, or pest/insect attack. As rightly observed in several decisions, if the exemption or concessional rate of tax was intended only to 'cereals' or 'fish' or 'oil' which is fit for human consumption, the relevant entry would have said so. Where the description is merely 'rice/wheat/ it will refer to inedible rice/wheat also and where the description is merely 'vegetable oil' it will include vegetable oil which has gone bad or rancid and therefore un-edible