Commissioner of Sales Tax, U.P. Vs. Gouti Bandhu, Aligarh and Others
EmailAppeal: Civil Appeals No. 1122 of 1979 with No. 2859 of 1980
Petitioner: Commissioner of Sales Tax, U.P.
Respondent: Gouti Bandhu, Aligarh and Others
Apeal: Civil Appeals No. 1122 of 1979 with No. 2859 of 1980
Judges: A.M. AHMADI, C.J.I. & S.P. KURDUKAR, J.
Date of Judgment: Feb 27, 1997
Head Note:
SALES TAX
U.P. Sales Tax Act
Removal of husk from barley – If a manufacturing activity. Held Dehusking amounts to processing and not manufacturing. (Para 2)
U.P. Sales Tax Act
Removal of husk from barley – If a manufacturing activity. Held Dehusking amounts to processing and not manufacturing. (Para 2)
Cases Reffered:
1. Tilok Chand Prasan Kumar v. STO (1970) 25 STC 118 (All)
2. Union of India v. Delhi Cloth and General Mills Co. Ltd. 1963 Supp (1) SCR 586
3. B. Dar Laboratories v. State of Gujarat (1968) 22 STC 160 (Guj).
4. Gouti Bandhu v. CST 1978 UPTC 707
JUDGEMENT:
ORDER
CA No. 1122 of 1979
1. The question for consideration is whether barley after dehusking is a commercially different commodity liable to be taxed as such under the U.P. Sales Tax Act. In other words, the question is whether removal of husk per se amounts to the crea-tion of a commercially known different commodity and, therefore, can be the subject of purchase tax. The relevant assessment year is 1968-69. During that year the assessee purchased husked barley from certain registered dealers. The said registered dealers had initially purchased barley on which they had paid the tax and thereafter they had removed the husk and sold the barley to the respondents herein. The respondents contended that by merely dehusking the barley they did not bring into existence a new commodity and could not, therefore, be liable to pay once again purchase tax on the said article. However, the Department levied the purchase tax on the premise that a new commodity commercially known was brought into existence and that amounted to manufacture within the meaning thereof under the Act. The High Court relying on an earlier decision reported in Tilok Chand Prasan Kumar v. STO (1970) 25 STC 118 (All) held in favour of the assessee and against the Revenue. Hence, this appeal by the Revenue.
2. We have heard the learned counsel for the appellant. None is present on behalf of the respondents. In Tilok Chand case the Court relying on an earlier decision of this Court in Union of India v. Delhi Cloth and General Mills Co. Ltd. 1963 Supp (1) SCR 586 pointed out the material difference between processing and manufacturing and held that dehusking at the most amounts to processing and not manufacturing and, therefore, there is no element of manufacture. Reliance was also placed on the decision of the Gujarat High Court in B. Dar Laboratories v. State of Gujarat (1968) 22 STC 160 (Guj). After this decision, Explanation II came to be introduced by the Amending Act, 1970. The counsel for the Revenue contended that this Explanation applied retro-spectively. We are afraid we cannot accede to that contention as the Explanation does not say so whereas the subsequent Explana-tion introduced a little later expressly says so. That Explana-tion, therefore, cannot be given retrospective effect. That being so, as the law stood at the relevant point of time, the view taken by the High Court cannot be said to be erroneous. We, therefore, see no reason to interfere with the impugned order in this appeal. The decision may be different in the subsequent orders because of the amendments but we are not concerned with them.
3. In the result, this appeal fails and is dismissed with no order as to costs.
CA No. 2859 of 1980
4. The decision in this appeal was based on the decision of the Division Bench of the High Court in Gouti Bandhu v. CST 1978 UPTC 707. We have just disposed of the appeal arising from that deci-sion and since we have affirmed the view of the High Court there-in this appeal too must fail and is dismissed with no order as to costs.
CA No. 1122 of 1979
1. The question for consideration is whether barley after dehusking is a commercially different commodity liable to be taxed as such under the U.P. Sales Tax Act. In other words, the question is whether removal of husk per se amounts to the crea-tion of a commercially known different commodity and, therefore, can be the subject of purchase tax. The relevant assessment year is 1968-69. During that year the assessee purchased husked barley from certain registered dealers. The said registered dealers had initially purchased barley on which they had paid the tax and thereafter they had removed the husk and sold the barley to the respondents herein. The respondents contended that by merely dehusking the barley they did not bring into existence a new commodity and could not, therefore, be liable to pay once again purchase tax on the said article. However, the Department levied the purchase tax on the premise that a new commodity commercially known was brought into existence and that amounted to manufacture within the meaning thereof under the Act. The High Court relying on an earlier decision reported in Tilok Chand Prasan Kumar v. STO (1970) 25 STC 118 (All) held in favour of the assessee and against the Revenue. Hence, this appeal by the Revenue.
2. We have heard the learned counsel for the appellant. None is present on behalf of the respondents. In Tilok Chand case the Court relying on an earlier decision of this Court in Union of India v. Delhi Cloth and General Mills Co. Ltd. 1963 Supp (1) SCR 586 pointed out the material difference between processing and manufacturing and held that dehusking at the most amounts to processing and not manufacturing and, therefore, there is no element of manufacture. Reliance was also placed on the decision of the Gujarat High Court in B. Dar Laboratories v. State of Gujarat (1968) 22 STC 160 (Guj). After this decision, Explanation II came to be introduced by the Amending Act, 1970. The counsel for the Revenue contended that this Explanation applied retro-spectively. We are afraid we cannot accede to that contention as the Explanation does not say so whereas the subsequent Explana-tion introduced a little later expressly says so. That Explana-tion, therefore, cannot be given retrospective effect. That being so, as the law stood at the relevant point of time, the view taken by the High Court cannot be said to be erroneous. We, therefore, see no reason to interfere with the impugned order in this appeal. The decision may be different in the subsequent orders because of the amendments but we are not concerned with them.
3. In the result, this appeal fails and is dismissed with no order as to costs.
CA No. 2859 of 1980
4. The decision in this appeal was based on the decision of the Division Bench of the High Court in Gouti Bandhu v. CST 1978 UPTC 707. We have just disposed of the appeal arising from that deci-sion and since we have affirmed the view of the High Court there-in this appeal too must fail and is dismissed with no order as to costs.
