NARENDRA OIL REFINERIES Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) The first two petitioners herein are oil refineries and are challenging the interpretation of section 2(12A) of the Bombay Sales Tax Act, 1959. Admittedly, the petitioner are dealing in the manufacture of edible oil as well as non-edible oil and they also deal with the activity of manufacturing oil by crushing oil seeds. The petitioners also manufacture cakes, refined oil and soaps. One of the other activities of the petitioners-refineries is that they procure washed cotton seed oil and convert it into refined cotton seed oil.

(2.) The controversy centres around the question whether the petitioner unit could be termed as "edible oil unit" within the meaning of section 2(12A) of the Bombay Sales Tax Act, 1959, as far as the activity of the petitioners of procuring washed cotton seed oil and converting it into refined cotton seed oil is concerned. The relevant section which falls for interpretation is as follows :

(3.) Be it as it may, after the new Act came into force, the petitioners raised a dispute before the Commissioner of Sales Tax under section 52 of the Bombay Sales Tax Act (annexure F to this petition). It was contended on behalf of the petitioners that since the washed cotton seed oil or cotton seed oil (washed grade) is non-edible oil as held by the Government itself, the manufacture of refined cotton seed oil from such a non-edible oil would not be covered by the definition of "edible oil unit" under section 2(12A) of the Bombay Sales Tax Act. This matter was taken up by the Deputy Commissioner of Sales Tax, Nagpur Division, Nagpur. He also went to the spot where the refineries were situated and found that the petitoner itself purchases washed cotton seed oil and puts it through refining process and the ultimate product obtained is refined cotton seed oil. Further, by his order dated 30th May, 1986, the Deputy Commissioner of Sales Tax, Nagpur Division, Nagpur, held that since the finished product and the commodity after refining is a completely new one and for a different commercial purpose, the petitioners are manufacturing edible refined cotton seed oil, and, therefore, the petitioners' unit falls under the category 2(12A)(ii) and (iii) of the Bombay Sales Tax Act, i.e., "refining and producing of edible oil" and it is in that even that the unit will have to be made assessable to sales tax even for production of such refined cotton seed oil. It is this order at annexure G which is impugned by the petitioners in this petition.