RAJ LUBRICANTS Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THESE are petitions against the orders of the Sales Tax appellate Tribunal, Madras Bench, holding that the sale of mineral oil effected by the petitioners herein was liable to sales tax. The facts are not in controversy. The petitioners purchased mineral oil from the Indian Oil corporation under the brand name, Indrex Oil Light, and they paid tax thereon. Subsequently, this oil purchased by them was subjected to different chemical processes and the resultant oil was sold under different commercial names. The order of the Tribunal extracts the procedure adopted by the petitioners in the processing of the oil and the same is as follows :- "procedure for processing transformer oil.- The base oil used is a kind of mineral oil marketed by the Indian Oil Corporation, madras-2, under the brand name, Indrex Oil Light. The above oil is treated with sulphuric acid of 1 to 2 per cent strength for removing aromatic and unsaturated compounds present in the oil. The quantity of the acid used for treatment is 5 per cent of the total quantity of the oil taken for processing. The resultant purified oil is decanted by applying activated fullers earth. The quantity of fullers earth used is 4 per cent of the purified oil. Then the decanted oil is treated with solution of sodium carbonate (the quantity used being 2 per cent of the quantity of the decanted oil) for removing the acidity present in the oil on account of the initial treatment with sulphuric acid. The resultant oil is filtered by vacuum process for removing the residual impurities. The filtered oil is sold as transformer oil."

(2.) THE second procedure adopted by the petitioners is stated to be as follows : "the base oil used is mineral oil marketed by the indian Oil Corporation, Madras-2, under the brand Indrex Oil 10. This oil is mixed with cutting oil additives bought in the market as such. THE composition of the additive is not known, as it is trade secret of the sellers. THE quantity of the additive used is 20 per cent of the quantity of base oil taken for processing. "the third process is described as under : "THE base oil base used is waste oil bought of local registered dealers. THE waste oil is purified by adding 4 per cent of soda-ash and 10 per cent of sulphuric acid. THE purified oil is sold as Oil 91. "