LexCOMMISSIONER OF SALES TAX, U.P. versus M/S. LAL KUNWA STONE CRUSHER (P) LTD. ETC
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A B c D E F G H COMMISSIONER OF SALES TAX, U.P. v. MIS. LAL KUNWA STONE CRUSHER (P) LTD. ETC. MARCH 14, 2000 [S. RAJENDRA BABU AND S.N. PHUKAN, JJ.] SALES TAX: U.P. Sales Tax Act, 1948 : Section 2( e-1 ). Sales Tax-Commercial goods-Processing of-No change in identity of goods-Series of sales-Levy of tax-'-Pennissibility of-Stone boulders- Sales tax paid at the time of purchase-Crushing of boulders into stone chips, gitti and dust-Held such goods continue to be stone-They were not commer- cially different goods fort he purpose of saks tax-Notification dated 7.9.1981- Applicability of \ The respondent-company was purchasing stone boulders and crush- ing them into stone chips, gitti and dust for further sale. Its claim that as at the time of purchase of boulders sales tax has been paid and hence goods emerging out of boulders were not liable to tax again was rejected by the assessing authority. On appeal the Assistant Commissioner of sales tax accepted the claim of respondent holding that the trader had neither manufactured gitti nor has sold it having crushed boulders into small stones and dust. On second appeal, the Tribunal, by majority, upheld the view taken by the Assistant Commissioner. It held that the goods continue to be stone and they are not commercially different goods to be identified differently for the purposes of sales tax. The Revision Petition preferred by Revenue before the Allahabad High Court was dismissed. Hence this ap- peal. Dismissing the appeal, this Court . HELD : 1. The view taken by the m·ajority of the Tribunal and affirmed by the High Court is correct. The purpose of sales tax is to levy tax on sale of goods and not the sale of the substance out of which they may have been made. As soon as separate commercial commodities emerge or come into existence, they become separately taxable goods for purposes of sales tax. Where commercial goods, without change of their identity as 276 .:: ... COM.MR. OF SALES TAX v. LAL KUNWA STONE CROSHER (P) LID. 277 such goods, are merely subjected to some processing or finishing, they may remain commercially the same goods which cannot be taxed again, in a series of sales, so long as they retain their identity as goods of a particular type. [278-G-H; 279-A-B] 2. In the present case, the goods that are brought into taxation are enumerated in Entry 40 of the Notification dated September 7, 1981. Stone, as such, and gitti and articles of stones are all of similar nature though by size they may be different. Even if gitti, kankar, stone-ballast, A B etc. may all be looked upon as separate in commercial character from stone boqlders offered for sale in the market, yet it cannot be presume~ C that Entry 40 of the Notification is intended to describe the same as not stone at all. In fact the term 'stone' is wide enough to include the various forms such as gitti, kankar, stone ballast. [278-F -G; 279-D-E] State of Tamil Nadu v. Pyare I.Al Malhotra, [1978) 2 SCC 552, relied on. Reliance Rocks Builders & Suppliers v. State of Kamataka, (1983) 49 STC 110, held inapplicable. CIVIL APPELLATE JURISDICTION Civil Appeal No. 5654 of D 1998 Etc. E From the Judgment and Order dated 7 .11.97 of the Allahabad High Court in S.T.R. No. 656 of 1993. Ms. Niti Dikshit, Pradeep Misra, Kavin Gulati, (Adarsh Kumar Goel) Additional Advocate General and S.N. Bhatt for the Appellant. F Dhruv Agrawal and Praveen Kumar for the Respondents. The Judgment of the Court was delivered by RAJENDRA BABU, J. We are concerned in this case with the G notification dated 7.9.81 bringing to sales tax the following items at the point of sale to the consumer : "Ramraj, geru, surk.hi, sand, lime, bajri, marble-chips, moram, gitti, kankar, stone-ballast; stone and articles of stone except of glazed stone." H A B c D E F H 278 · SUPREME COURT REPORTS [2000) 2 S.C.R. The respondent is a dealer engaged in purchasing of stone boulders and crushing them into stone chips, gitti and dust for the purpose of further sale. The contention put forth by the dealer is that at the time of purchase of boulders, sales tax has been paid and hence goods emerging out of the same as small stones, dust, etc. are not liable to be taxed again. The process adopted by him in conversion of boulders to the aforesaid goods may be manufacture, still tax cannot be imposed as what has been produced by him is physically and chemically not differe
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