LexSHAW WALLACE & CO. LTD. versus STATE OF TAMIL NADU
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795
SHAW WALLACE & CO. LTD.
v.
STATE OF TAMIL NADU
March 23, 1976
[A. N. RAY, C.J. AND JASWANT SINGH, JJ.]
Tamil Nadu General Sales J;ax Act, 1959-Sec. 3-First Schedule Entry 21-
Fertilizer mixture prepared by mixing manually some of cheniical fertilizers
1nentioned in Schedule whether exempted from tax-Whether same n1arketable
commodity-Whether 1nanufacturing process of relevant consideration.
TID.e appellant is a registered dealer under the Tamil Nadu General Sales
A
B
Tax Act. 1959. The appellant manufactures and deals in chemical fertilizers.
C
The appellant paid tax under the Act on certain cheniical fertilizers which
are shown as sub items 1 to 1§ of Serial No. 21 of the First Schedule to the
Act. The appellant prepared {ertilizer mixtures by dry-mixing various chemical
fertilizers which had already suffered tax. The appellants claimed exemption
for the turnover in respect of fertilizers mixtures on the ground that it cannot
be said to be a commodity different from the ingredients composing it which
had been purchased within the State and bad suffered t~x under item No. 21
of the First Schedule. The Assessing Officer disallowed the exemption.
On
D
appeal the
Appeilate Assistant Commissioner allowed the exemption on the
·ground that no manufacturing process was involved at the time of preparing
the fertilizer mixture and that the resultant product is not a product different
from the ingredients constituting it which had already suffered tax.
In an appeal, the Tribunal reversed the decision of the Appellate Assistant
Commissioner and refused to grant the exemption. The Revision Application
filed by the appellants to the Tamil Nadu High Court was dismissed at the
stage of admission on the ground that each of the competent article and the
fertilizer mixture have different chemical properties of their own and their use
.also is different and that. therefore, it is not possibJe to treat the fertilizer
mixture as the same article as the components themselves.
The appellants contended in appeal by special leave
E
(I) As s. 3(2) of the Act provides for levy of sales tax in respect of
~oods mentioned in the First Schedule at the rate and only at the
point specified thereunder and as the fertilizer mixture"! are prepared
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by mixing manually by means of shovels some of the chemical
fertilizers mentioned in sub items 1 to 15 in Entry 21 in the
Schedule without admixture of any organic manure, they are not
(2)
liable to tax inside the State.
Even if such fertilizer bears a specific commercial name, for the
purpose of the Act, it has no identity except as a chemical fertilizer
and secondly the mixing of one or more chemical fertilizers cannot
but be the same article entitled to application of single point scheme
in respect of its ingredients. This is the natural implication of the
expression 'chemical fertilizers' followed by the expression 'that is
to say'.
Dismissing the appeal,
G
HELD : (I) The pr.incipal question for determination in these appeals is
whether the fertilizer mixtures in question can be treated as the same article
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as chemical fertilizers composing them. A plain reading of s. 3 read with
item 21 of the First Schedule shows that it is only when a chemical fertilizer
specified in sub items 1 to 15 of item No. 21 of the First Schedule is sold
in the same condition in which it is purchased that it is not subject to a
A
B
c
D
E
F
G
H
796
SUPREME COURT REPORTS
[1976] 3 s.c.R.
fresh levy.
Fertilizer mixture it would be noted is not the same article as
the i~gredients composi1;1g it.
It is sold as a different commercial produLi. The
question w~~ther t~ere is _any manufacturing process involved in the preparation
of any fert1hzer mixture is wholly irrelevant for the present purpose.
[798A
G-H, 799AJ
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(2) The fertilizer mixture is a marketable commodity different from its
components, it is put to different use and has different properties. [800-G-1
State of Ta1nil Nadu v. Rallis lndia, 34 S.T.C. 532 and State of Ta1nil Nadu
v. Pyarelal Malhotra [1976] 3 S.C.R. 168, relied on.
Appeal by Special Leave from the Judgment and Order dated the
5-3-74 of the Madras High Court in Tax Cases Nos. 77 and 78/74.
K. S. Ramamurthi and A. T. M. Sampath for the Appellant.
S. T. Desai, A. V. Rangam and A. Subhashini; for Respondent.
The Judgment of the Court was delivered by
JASWANT SINGH, J.-These appeals by special leave Excerpt shown. Read the full judgment & AI analysis in Lexace.