M/S RAVI PRAKASH REFINERIES (P) LTD. versus STATE OF KARNATAKA

Citation: [2016] 5 S.C.R. 565 · Decided: 03-05-2016 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Case Partly allowed

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Judgment (excerpt)

[2016] 5 S.C.R. 565 
MIS RAVI PRAKASH REFINERIES (P) LTD. 
v. 
STATE OF KARNATAKA 
(Civil Appeal No. 4 760of2016) 
I 
MAY03,2016 
[DIPAK MISRA AND SHIVA KIRTI S~GH, JJ.] 
A 
B 
Central Sales Tax Act, 1956 - s.9(2) - Sale of 'Superjlower 
~ 
De-oiled Cake' in the course of inter-State trade and commerce - In 
respect of which assessee-seller produced Form 'C' - Assessing 
C 
Officer levied tax on the said transaction at 2% giving benefit of 
reduction in rate of the tax, in terms of Notification dated 31.5.2002, 
on production of Form 'C' - Succeeding Assessing Officer reopened 
the assessment opining that there was escapement of tax as inter-
State sale of 'Sunflower De-Oiled Cake' was liable to tax at 4% 
and not 2% - Tax levied at 4% - Appellate Authority set aside order 
of re-assessment on the ground that change oJ opinion cannot be a 
ground for re-opening of assessment in exercise of power u!s. 12-A 
of Karnataka Sales Tax Act - Assessee preferred appeal seeking 
finding on rate of tax on 'Oil-Cake' and 'De-Oiled Cake' - Appellate 
Tribunal held that the 'Oil-Cake' in Notification dated 31.5.2002 
would include 'De-Oiled Cake' and allowed benefit of reduction in 
rate of tax to 2% - High Court, in Revision, held that 'Oil-Cake' 
and 'De-Oiled Cake' are two different .commodities and hence sale 
of "De-Oiled Cake' would be subjected to tax at 4% - On appeal, 
held: High Court rightly held that 'Oil-Cake' and ''De-Oiled Cake' 
are two_ different commodities - 'De-Oiled Cake' did not fall within 
purview of the Notification and thus could not have -been taxed at 
reduced rate - However. it was not permissible to re-open. the 
assessment as the initial assessment was on the bas'is of available 
material brought on record - Therefore, the assessee would reap 
the benefit of initial assessment - Central Sales Tax Notification 
No. FD 119 CSL 2002 (2) dated 31.52002 - Karnataka Sales Tax 
Act, 1957 - s.12-A. 
Partly allowing the appeal, the Court 
HELD: 1. The Government of Karnataka in exercise of its 
. 565 
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G 
H 
566 
A 
B 
c 
D 
E 
F 
I . 
SUPREME COURT REPORTS 
[2016] 5 S.C.R. 
powers conferred by Section 8 (5) of the Central Sales Tax Act 
(CST Act), issued Notification No.119 FD 119 CSL 2002(2) dated 
31.05.2002 granting reduction in the rate of central sales tax 
payable on inter-State sales of goods specified in Serial Nos.1 to 
11 of the notification, subject to the condition that the Dealer 
produces declarations in Forms 'C' obtained from the registered 
Dealers/Government to whom the goods are sold. 'Oil Cake' is 
one of the goods specified in serial No. 6 of the Notification. [Para 
16)(574-A-B] 
2.1 There is a distinction between the 'Oil-Cake' and 'De-
Oiled Cake' and they are two different commercial products. Thus, 
the assessee cannot be allowed to advance a plea that the 
commercial parlance test should be adopted to determine the 
said goods for the purposes of CST Act. [Para 18)(576-E-F] 
Agricultural Produce Market Committee v. Biotor 
Industries Limited and Am: (2014) 3 SCC 732 - relied 
on. 
2.2 From the Notification No. FD 119 CSL 2002 (2) dated 
31" May, 2002, it is evident that the competent authority while 
exercising power under sub-section (5) of Section 8 of the CST 
Act, has kept the reduction of tax qua 'De-Oiled Cake' from the 
purview of Notification and has only provided 'Oil Cake' to be 
taxed at the reduced rate of tax. Thus, the goods have distinct 
and different identity which also get recognition from the 
Notification. The finding of the High Court, as regards 'Oil-Cake' 
and 'De~Oiled Cake' being different products, is correct. [Para 
19, 21] [577-D-E, G-H] 
Mis Sterling Foods v. State of Karnataka (1986) 63 STC 
239 - distinguished. 
State of Karnataka v. Mis Goa Granites 2007 (5) VST 
434 (Kar); Mis Habeeb Protiens and Fats Extracts, 
G 
Hiriyur, Chitradurga District v. Commissioner of 
Commercial Taxes, Bangalore and Am: 2005 (58) Kar. 
L.J.155; Dy. CST v. Pio Food Packers 1980 SCR 
1271 = 1980 Suppl. SCC 174 - referred to. 
3. However, there should not have been reopening of 
H 
M/S RAVI PRAKASH REFINERIES (P) LTD. v. STATE OF 
KARNATAKA 
assessment, as the assessing authority had expressed the opinion 
with regard to the rate of tax on the 'De-Oiled Cake' while 
scrutinizing 'C' Forms which is an expression of opinion on the 
available materials brought on record. Therefore, the first 
appellate authority as well as the Tribunal was' justified in 
concurring wi

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