YARANA FEEDS AND FARMSHARIS MARINE PRODUCTS Vs. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES ASSESSMENTS HUBLI

JUDGEMENT

(1.) The petitioners are engaged in the business of manufacture and sale of poultry feed and cattle feed and are dealers registered under the provisions of the Karnataka Sales Tax Act. The petitioners purchase dry fish which is an ingredient in the manufacture of poultry feed. The said purchases are made both from unregistered dealers such as fishermen and also from registered dealers who deal in dry fish.

(2.) For the deepavali year ending 1st November, 1980, the assessment of the petitioner in W.P. No. 6316 of 1989, was completed by the assessing authority on 15th April, 1987. While concluding the assessment the assessing authority exempted the purchase turnover in dry fish from levy of purchase tax under section 6 of the Karnataka Sales Tax Act ("the Act") on the ground that the fish is exempt from tax under section 8 of the Act. This is what the assessing authority held in the course of the assessment order :

(3.) After the assessment was completed notice under section 12-A was issued by the Assistant Commissioner of Commercial Taxes (Assessments), Hubli, as per annexure-B on 18th February, 1989, proposing to levy purchase tax under section 6 on the turnover of dry fish on the value of Rs. 2,32,831.52. The reason for issuing this notice as can be seen from the notice itself is, that the Commissioner of Commercial Taxes, Bangalore has clarified that such turnover is to be subjected to tax when those goods are consumed by a manufacturer in cattle feed and poultry feed.