DEPUTY COMMISSIONER OF SALES TAX Vs. SULAIMAN

JUDGEMENT

(1.) l these tax revision cases at the instance of the Deputy Commissioner of Saletax (Law) raise a common question whether the assessee is liable to tax under S.5A of the Kerala General Saletax Act, 1963 in respect of the purchase turnover of raw-bones converted into bone-meal for sale as fertiliser. The cases relate to 1975-76, 1976-77, 1977-78, and 1978-79. The assessments for the years 1975-76, 1976-77 and 1977-78 were completed on best judgment by the sales tax officer and separate orders for these years were issued fixing the taxable turnover and the sales tax due thereon. The sales tax officer later initiated proceedings under S.19 of the Act on the ground that the purchase turnover of raw-bones of the assessee during these years liable to tax under S.5A of the Act had escaped assessment. The assessing officer overruling the contentions of the assessee that the purchase turnover relating to raw-bones is not liable to tax, issued revised orders of assessment for these years. The order of assessment for the year 1978-79 took in also the purchase turnover of raw-bones as liable to tax under S.5A of the Act. In appeal by the assessee the Appellate Assistant Commissioner remanded all these cases for fresh disposal after giving the assessee a further opportunity to prove his case. The remand in respect of the assessment year 1978-79 took in also matters other than the assessee's liability to tax under S.5A of the Act. In further appeal The Sales Tax Appellate Tribunal, Ernakulam has set aside the re-assessment proceedings in respect of the years 1975-76, 1976-77 and 1977-78 holding that no tax is leviable on the purchase turnover of raw-bones under S.5A of the Act. The remand order in respect of the assessment year 1978-79 was, however, confirmed confining it to matters other than the assessee's liability to tax under S.5A on the purchase turnover of raw-bones. In regard to the purchase turnover of raw-bones it was held that the sale is not liable to tax under S.5A of the Act. It is against these orders of the Tribunal that the Deputy Commissioner of Sales Tax (Law) has come up in revision.

(2.) The relevant portion of S.5A(1) is extracted below:-"Every dealer who, in the course of his business, purchases from a registered dealer or from any other person any goods, the sale or purchase of which is liable to tax under this Act, in circumstances in which no tax is payable under S.5, and either

(3.) The bonemeal manufactured out of raw-bones has got a different commercial identity as fertiliser even though the process of manufacture involved is only the crushing and powdering the same. Counsel for the assessee relies on the decision of the Madras High Court in the State of Tamil Nadu v. Subbaraj (47 STC 30) wherein it is held that raw-bones cannot be said to have been "consumed in the process of bringing into existence the crushed bone, bone grist, bone-meal, fluff or horn hoof, apart from the distinctive meaning that will have to be attributed to the word "manufacture". Construing the wording in the corresponding S.7A(1)(a) of the Tamil Nadu General Sales Tax Act it is stated at page 34: