TELANGANA STEEL INDUSTRIES Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) Leave granted.

(2.) In the present cases, we are concerned with one of the grey areas of the legal world. The same is as to when a new commercial commodity comes into existence following processing or manufacturing undergone by the parent object, which in most cases serves as a raw material for the end product. This aspect of the matter assumes importance when a law taxes sale of goods. To find out whether a particular goods is exigible to sale tax or not despite the raw material used in the production having been taxed earlier, the test evolved is whether a new commercial commodity has come into existence.

(3.) As to when it can be said as aforesaid has been a subject matter of catena of decisions. We do not propose either to catalogue them or even (sic) them to find out as to why in one case it was felt that a new commercial commodity had not come into existence and in another a different view was taken. It would be enough if we note some of the leading decisions. These are : (1) Tungabhadra Industries Limited v. Commercial Tax Officer, 11 STC 827: (AIR 1961 SC 412) wherein hydrogenated groundnut oil (commonly called Vanaspati) was not held to be a different product from groundnut oil. (2) Hindustan Aluminium Corporation Ltd. v. State of Uttar Pradesh (1982) 1 SCR 129 : (AIR 1981 SC 1649), where rolled products and extrusions were regarded as different commercial commodity from aluminium ingots and billets, (3) Dy. Commr. of Sales Tax v. Pio Food Packers, 46 STC 63 : (AIR 1980 SC 1227), where pineapples slices sold in sealed cans after processing the pineapples were not regarded as different goods, (4) Alladi Venkateswarlu v. Govt. of Andhra Pradesh, 41 STC 394 : (AIR 1978 SC 945). where parched rice (Atukulu) and pulled rice (Muramaralu) were held not different from rice, (5) Ganesh Trading Co. v. State of Haryana, 32 STC 623: (AIR 1974 SC 1362); and Babu Ram Jagdish Chemical Co. v. State of Punjab, 44 STC 159: (AIR 1979 SC 1475) in both of which rice was accepted as a different commodity from paddy, (6) State of Karnataka v. Raghuram Shetty, 47 STC 369: (AIR 1981 SC 1206) in which certain observations were made regarding bread being different from wheat flour inasmuch as flour is consumed in the production of bread and so a new commodity comes into existence.