RALLIS INDIA LIMITED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) These civil appeals are directed against the judgment of the High Court of Judicature at Madras passed in Tax Case (Appeal) Nos.871-872 of 1983 dated 28-7-1992 and Tax Case (Appeal) Nos. 1100-1101 of 1992 dated 21-9-1992 wherein the High Court has held that the goods in question, namely, Gelatine would fall within the description of chemical as described in Entry 138 of the First Schedule to the Tamil Nadu General Sales Tax Act 1959 (for short the Act).

(2.) The appellant herein is incorporated under the Companies Act and under Memorandum dated 1-9-1983 has succeeded to the business of the erstwhile M/s. Protein Products of India Limited which was approved by the order of the Madras High Court dated 29-1-1986. the erstwhile M/s. Protein Products of India Ltd. was assessed towards sales tax for the years 1977-78 and 1978-79. Subsequently the said orders of assessment were revised under Section 16 of the Act by the Deputy Commercial Tax Officer on finding that the sales of product Gelatine have been wrongly assessed at 4% multi point as against liability at 8% in terms of Enquiry 138 of the First Schedule to the Act. M/s. Protein Products of India Ltd. filed appeals before the Appellate Assistant Commissioner, Coimbatore under Section 31 of the Act. The Appellate Assistant Commissioner held that Gelatine was made from Ossein which was the raw material and Ossein is a direct derivative of bone composed of animal proteinoid matter which was a natural mixture of biologicals obtained as a dried extract and thus Gelatine would not fall within the meaning of chemicals under Entry 138. Consequently, revised assessment orders were set aside and the appeals were allowed. Subsequently, the Joint Commissioner, Madras exercising suo moto revisional power to revise the appellate orders issued notices to M/s. Protein Products of India Ltd. After hearing, the Joint Commissioner, Madras held that Gelatine falls within the description of a chemical. Consequently, the appellate orders were set aside and the assessment orders for the 1977-78 and 1978-79 were restored as proposed by order dated 21-7-1983.

(3.) M/s. Protein Products of India Ltd. and the appellant filed appeals before the High Court of Judicature at Madras against the orders dated 21-7-1983, passed by the Joint Commissioner. When the matters were taken up for hearing the appellant brought to the notice of the High Court the judgment of the Sales Tax Appellate Tribunal in Tax Appeal No. 642/85 and Tax Appeal No. 1/86 decided on 30-3-1987 in order to show that the tribunal after having gone into the fact, as a fact finding body, has concluded that Gelatine cannot be treated as a chemical and that Gelatine cannot produce any chemical effect or resulting chemical change when used and further Gelatine was not also an intermediary product. Further it was brought to the notice of the Court that the Revenue has not appealed against the said judgment of the Tribunal and it has become final between the parties. The High Court relying on certain decision, without any kind of additional material or without examining or adverting to the findings of the Tribunal held that Gelatine falls within the description of a chemical falling under Entry 138 of the First Schedule of the Act. It is in this way the appellant has come to this Court by filing special leave petitions.