GODREJ SOAPS LTD Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THE petitioners, M/s. Godrej Soaps Ltd. , mumbai have filed this petition under Article 226 of the Constitution of India to challenge the amendment to section 2 (17) of the Bombay Sales Tax Act, 1959 ("act" for short), by Maharashtra Act No. IX of 1989 ("act No. IX of 1989) with retrospective effect i. e. with effect from 1st January, 1960, contending it to be illegal, invalid and ultra vires the constitution of India.

(2.) THE factual matrix depicts that petitioner no. 1 is a public limited company engaged in manufacturing and selling of soaps, toiletries and fatty acids, etc. The petitioners purchase expeller groundnut oil and soyabean oil from other dealers in maharashtra; who are registered under section 22 of the Act. the petitioners also purchase such oil from dealers located in different States of the country.

(3.) ACCORDING to the petitioners, the oil so purchased is edible. It can be used for human consumption without refining. However, with a view to find out a better market for the oil, petitioners carry on activity of refining of oil only to put the oil purchased in a more acceptable condition. The petitioners, during the calender year 1981, under legal advice based on the judgment of the Supreme court in the case of Tungabhadra Industries v. Commercial Kurnool Tax Officer, Kurnool, (1960) 11 STC 827, that the process of refining oil does not amount to manufacture, did not pay tax on the sale of the oil which was purchased from the registered dealers in the State of Maharashtra; on which tax was paid at the time of purchase because they were entitled to claim resale without payment of tax by virtue of section 8 of the Act.