(1.) THE State Government through the Deputy Commissioner of Commercial Taxes (Special) has preferred this petition which is directed against an appellate order of the Karnataka Appellate tribunal, Bangalore, in S. T. A. No. 566 of 2000 dated July 21, 2000. We need to prefix this order with the observation that after the learned Government Advocate and the learned Senior standing Counsel who represents the respondents submitted that the appeal requires to be formally admitted which is accordingly done, the two learned counsel however have advanced their arguments in extenso with regard to the narrow issue that is in controversy and having heard them, we consider it appropriate from the point of view of both the parties who are before us, that the appeal requires to be disposed of on the merits.
(2.) BRIEFLY stated, the respondents Marico Industries Ltd. , produce and market coconut oil in containers of various dimensions. It is their case that this oil is pure coconut oil and that it is edible oil. According to them, this oil is marketed essentially for the purpose of cooking and allied purposes, all of them coming within the broad framework of the concept of edibility. The assessing authority after computing the relevant figures from the records produced before it for the assessment year in question which happens to be April 1, 1996 to March 31, 1997 completed the assessment on the footing that the product in question was edible coconut oil. The department through the Joint Commissioner of Commercial Taxes (Administration) then served notice on the respondents under Section 21 (2) of the Karnataka Sales Tax Act, 1957, dated february 25, 2000 regarding the solitary contention that the assessment requires to be revised since it was the case of the department that the oil in question was being used as a hair oil and that consequently, it would fall under Sl. No. 10 (i) of Part T of Schedule II of the Karnataka sales Tax Act, 1957 liable to basic tax of 12 per cent surcharge, cess and turnover tax thereon. To summarise the controversy briefly, the department's contention was that the original assessment order was incorrect because it categorised the product as attracting tax at a lower rate when in fact it qualified for a higher rate of tax on the ground that it was a hair oil. The revisional authority after hearing the respondents set aside the original assessment order and totally revised it on the footing that the product in question required to be classified as hair oil. We do not propose to comment much about the revisional order apart from observing that the main ground on which the authority proceeded appears to be based on the fact that the coconut oil in question apart from being marketed in relatively large containers was also being sold in small containers of 50 and 100 ml. and even in sachets which contain enough oil for one time use. There are some references to reports that have appeared in the press, etc. , but what essentially swayed the original authority was the fact that the oil which was being sold exclusively as edible oil was also being marketed in these smaller containers which according to the department were available at various dealers and outlets where edible oil is not sold but where toilet preparations such as hair oil is marketed. Practically speaking, the concept of the user test was applied and the authority drew on its knowledge that different sections of various communities use coconut oil as a hair oil and that for this reason the oil in question was being sold in a manner and through channels that left little doubt about the fact that it was intended to be used as hair oil and was in fact being done so, What we find from the revisional order is that for no ostensible reason, the revisional authority straightaway classified the entire production/sale of all the oil that was marketed by the respondents under the head of hair oil without considering the question as to whether and what percentage of the oil was being used or marketed as an hair oil or whether all of it qualified to be included under this definition.
(3.) THE respondent appealed against the revisional order to the Tribunal and the Tribunal after hearing the parties set aside the appellate order and restored the original assessment order. The state, being aggrieved by the Tribunal's order has preferred the present petition on the ground that interference by the Tribunal in the facts and circumstances of the present case was not justified.