NAZARETH FOODS (P) LTD. Vs. ASSISTANT COMMISSIONER

JUDGEMENT

(1.) THE petitioners have filed these writ petitions seeking issuance of writ of Certiorarified Mandamus to call for the records of the first respondent in TIN/33161023402/2006-07, TIN/33161023402/2007-08, and TIN/33121024588/2006-07, TIN/33121024588/2007-08 respectively, quash the impugned proceedings dated 14.3.2011 and further direct the first respondent to grant exemption on the sale of "coriander powder" and "turmeric powder" in view of the Notification issued by the second respondent in G.O.Ms.No.36, CT & R (B1), dated 1.4.2008 substituting Entry 18, Part B, Fifth Schedule to the Tamilnadu Value Added Tax Act, 2006 being clarificatory in nature as held by the Apex Court in Government of India and others v. Indian Tobacco Association, (2005) 5 RC 379. The schedule relevant is Fourth Schedule and it has been wrongly stated as Fifth Schedule. The learned counsel for the petitioners sought for oral permission to amend the mistake and the same is granted.

(2.) THE petitioners were registered dealers under the Tamil Nadu General Sales Tax Act, 1959 (for brevity, "the TNGST Act") and are now registered dealers under the provisions of the Tamil Nadu Value Added Tax Act, 2006 (for brevity, "Act 32/2006") and under the Central Sales Tax Act, 1956. The petitioners are carrying on business in food and condiments.

(3.) THE Madras Chillies Merchants Association requested the Government of Tamil Nadu to clarify whether chilly powder, pepper powder and coriander powder are taxable or not consequent to withdrawal of levy of tax on the sale of chilly, turmeric and coriander. This was considered by the Government of Tamil Nadu and on the basis of several decisions of the Courts, namely (i) Rajasthan Roller Flour Mills v. State of Rajasthan, 91 STC 403 (SC); (ii) Krishna Chander Dutta (Spice) Private Limited v. Commercial Tax Officer and others, 93 STC 180 (SC); and (iii) Namputhiris Pickle Industries v. State of Kerala and another, 92 STC 1 (Full Bench of Kerala High Court), it was concluded that mere change into powder does not change the essential nature of the commodity or its substantial identity and that when the above goods are powdered there is only a change in the form. Therefore, the Government was of the view that chilly, pepper and coriander would include the powder form also. Thus, by G.O.(D) No.383, Commercial Taxes Department, dated 22.10.1998, the Government granted exemption to chilly powder, pepper powder and coriander powder in the following manner: "4. The Government consider that the Chillies Powder, Pepper Powder, Corriander Powder etc. are not taxable since the chilly, pepper and coriander etc. are exempted from the payment of tax under Tamil Nadu General Sales Tax Act."