SIGGIL INDIA LIMITED FORMERLY THE SOUTH INDIA CARBONIC GAS INDUSTRIES LIMITED MADRAS 2 Vs. COMMERCIAL TAX OFFICER PARK TOWN II MADRAS

JUDGEMENT

(1.) THE petitioner has sought for issuing a writ of declaration under Art.226 of the Constitution of India, declaring that Serial No.25, Part E of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 is ultra vires Sec.3(2) of the Act, and in any view void and unenforceable being ultra vires Arts. 14, 19(l)(g) and 301 of the Constitution of India.

(2.) THE petitioner states that it is a company incorporated under the Companies Act, 1956. THEy have factories in Tamil Nadu at Manali and Tuticorion, and at Vizagapattinam in Andhra Pradesh. THE factories in Tamil Nadu are adjacent to Madras Fertiliz- ers Limited, Manali and Southern Petro Chemical Industries Corporation Limited, Tuticorin respectively. THEy purchase carbon dioxide (co2) from these two suppliers which is a by produce in the course of manufacture of fertilizers. Carbon-di-ox-ide purchased are received in compressed form at a pressure of 150 to 200 P.S.I. (Pounda/Sq.inch) as against normal atmospheric pressure of 14 to 15 P.S.I. THE gas is passed through a pottassium permanganate scrubber and then through sodium carbonate solution and finally given a waterwash. Thus impurities such as over flow traces and contaminations are removed in the process. THE gas is then passed on through the compressor to inter cooler where it is cooled with water and sent to the trap for removal of moisture and oil. This is repeated for second time and sent to a de-humidifier which is an alumina gel dryer which removes moisture from the gas. Finally it is passed through activated carbon to remove all the final traces of odour. Before it is taken for filling in cylinders. THE analysis of the products received and issued are as follows: Carbon-di-oxide(Co2) supplied by Souther Petro-Chemical Industries Corpn. Ltd. Madras Fertilizers Ltd. Co2 (Carbon-di-oxide) 99.20% 99.00% H2 (Hydrogen) - 0.75% N2 (Nitrogen) 0.46% 0.25% Oxygen & Argon 0.044% - Moisture 0.08% - Co2 as processed by SIGGIL. the petitioners herein Co2 (Carbon-di-oxide) 99.8% Acid and Sulphuri dioxide passess through test. Phosphine and Hydrogen -do- Moisture 0.176%

(3.) THIS being the position the authorities like the first respondent purported to impose a single point tax under item 106 of the first schedule a both at the hands of the Madras Fertilizers Limited and Southern Petro Chemical Industries Corporation Limited, as well as at the hands of the petitioner, stating that by virtue of the treatment like improving the gas they became different goods. According to the petitioners the authorities imposed a fresh tax notwithstanding the tax paid by the suppliers, In the light of the several demands raised the petitioners filed W.P. No.2 of 1988 and ultimately a writ of mandamus as prayed for was issued on 16.8.1989. Inspite of the said order the authority proceeded in imposing a multi stage tax, which unfortunately was confirmed by the Sales Tax Appellate Tribunal in T.A. No.779 of 1988 dated 23.12.1989 in respect of the assessment year 1985-86. Thereafter the petitioners filed revisions under Sec.38 of the Tamil Nadu General Sales Tax Act 1959 ( for short, the Act) which was ultimately decided in South India Carbonic Gas Industries Limited v. State of Tamil Nadu, 80 S.T.C. 30, as the petitioners were the known. In view of this position, the authorities were disabled from imposing two stage taxation. THIS Court held that Carbon-di-oxide at the hands of the petitioners was not a different commodity and commercially was the same. There was no change in the identity of the commodity at the hands of the petitioners.