LexM/S. TUNGABHADRA INDUSTRIES LTD. versus THE COMMERCIAL TAX OFFICER, KURNOOL.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
I, I I . I October 18. 14 SUPREME COURT REPORTS (1961) M/S. TUNGABHADRA INDUSTRIES LTD. v. THE COMMERCIAL TAX OFI<'ICER, KURNOOL. (S. K. DAs, M. HIDAYATULLAH, K. C. DAs Gul'TA, J.C. SHAH and N. RAJAGOPALA AYYANGAB, JJ.) Sales Tax__;.Hydrogenated groundnut oil (Vanasf>ati), if groundnut oil-Madras General Sales Tax (Turnover and Assess- ment) Rules, Ig39, rr. 4, 5 and I8. The appellant purchased groundnuts out of which it manu- factured gro1mdnut oil ; it also refined the oil and hydrogenated it converting it into Vanaspati. It sold the oil in all the three states. Under the Madras General Sales Tax Act, 1939, and the Turnover and Assessment Rules, for determining the taxable turnover the appellant was entitled to deduct the purchase price of the groundnuts from the proceeds of the sale of all groundnut oil. The High Court held that the appellant was entitled to the deduction in respect of the sales of unrefined and refined ground- nut oil but not in respect of the sales of hydrogenated oil on the ground that Vanaspatt was not "groundnut oil " but a product of groundnut oil. Held, .that the appellant was entitled to the deduction in respect of the sales of hydrogenated groundnut oil also. The hydrogenated groundnut oil continued to be "groundnut oil" not- withstanding the processing which was merely for the purpose of rendering the oil more stable. To be groundnut oil two con- ditions had to be satisfied-it must be from groundnut and it must be "oil ". The hydrogenated oil was from groundnut and in its essential nature it remained an oil. It continued to be used for the same purposes as groundnut oil which had not undergone the process. A liquid state was not an essential characteristic of a vegetable oil ; the mere fact that hydrogena- tion made it semisolid did not alter its character as an oil. CIVIL APPELLATE JUBISDIOTION: Civil Appeal No. 498 of 1958. Appeal from the judgment and order dated Febru- ary 11, 1955, of the Andhra. Pradesh High Court in T. R. C. No. 120 of 1953 a.rising out of the judgment and order dated December 29, 1952, of the Sa.Jes Tax Tribunal, Madras, in Tribunal A ppea.l No. 857 of 1951. A. V. Viswanatha Sastri, M. Ranganatha Sastri and M. S. K. Sastri, for the appellants. D. Narasaraju, Advocate-General for the State of , • 2 S.C.R. SUPREME COURT REPORTS 15 Andhra Pradesh, T. V. R. Tatachari, D. Venkatappayya I960 Sastri and T. M. Sen, for the respondent. . M/s. Tungabhadra 1960. October 18. The Judgment of the Court Iudustries Ltd. was delivered by v. The Commercial AYYANGAR J.-This appeal on a certificate under Ta" Officer, Art. 133 of the Constitution granted by the High K"rnool Court of Andhr& Pradesh · raises for consideration principally the question whether hardened or hydro- A.yyanga• J. gena.ted groundnut oil (commonly called Vanaspati) is " groundnut oil " within the meaning of Rule 18(2) of the Madras Genera.I Sales-Tax (Turnover and Assess- ment) Rules, 1939. Tunga.bha.dra Industries Ltd.-the appellant in this appeal-has a. factory of considerable size at Kurnool in the State of Andhra. Pradesh. The company pur- chases groundnuts and groundnut kernels within the State and manufactures groundnut oil and also refined oil as well a.s hydrogenated oil all of which it sells. The appeal is concerned with the assessment to sales. tax of this company for the year 1949-50. Section 3 of the Madras General Sales-Tax Act, 1939, enacts: "3. (1) Subject to the provisions of this Act,- (a.) every dealer shall pay for ea.ch year a tax on his total turnover for such year ; and (b) the tax shall be calculated at the rate of three pies for every rupee in such turnover. (2) ................................................................ . (3) ••..•..•...•...•..•.•••••..•••....•••••...•..•...••...•.••..••. (4) For the purposes of this section and the other provisions of this Act, turnover shall be determined in accordance with such rules as may be prescribed : Provided that no such rules shall come into force unless they are approved by a resolution of the Legis- lative Assembly. (5) The taxes under sub-sections (1) and (2) shall be assessed, levied and collected in such manner and in such instalments, if any, as may be prescribed: Provided that- (i) in respect of the same transaction of sale, the buyer or the seller, but not both, as determined by such rules as may be prescribed, shall be taxed ; 16 SUPR
Excerpt shown. Read the full judgment & AI analysis in Lexace.