PRASAD INDUSTRIES Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THIS is an appeal filed by M/s. Prasad Industries, Guntakal against order dated 16.7.1994 in Appeal No. 211/93 -94 on the file of Appellate Deputy Commissioner(CT), Kurnool relating to assessment order dated 2.12.1993 in Asst. No. 817/92 -93 (APGST) on the file of Commercial Tax Officer, Guntakal. The turnover disputed in the present appeal is Rs. 1,25,580/ -. The appellants are dealing in purchase and sale of scheduled goods viz., chicory and coffee seeds. They are consuming fire -wood in the manufacture process. The turnover for fire wood is Rs. 1,25,580/ - during the assessment year 1992 -93. Before the assessing authority they contended that as they are utilizing the fire -wood as energy only and as the fire -wood consumed is not utilised in the production of the end product, the said turnover is not liable for tax under Section 6A of APGST Act. That objection was over -ruled and ultimately the said turnover was assessed to tax along with other turnovers by the assessing authority. Aggrieved by that order, the appellant preferred an appeal before Appellate Deputy Commissioner. Appellate Deputy Commissioner dismissed the appeal on merits. Aggrieved by that order, appellant preferred the present appeal before this Tribunal.

(2.) THE point for consideration in the appeal is whether the order of Appellate Deputy Commissioner in appeal is liable to be set -aside? The fire -wood is being consumed by the appellant for purpose of manufacture of chicory powder and coffee powder. Of course, such a consumption of fire -wood is not as raw material or component of the end product The authorised representative relied upon a Judgment of the Supreme Court of India in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam vs. Thomas Stephen & Co., Limited reported in, (1988) 69 STC 320. In that case cashew shells had been used as fuel in kiln. They did not get transformed into the end product. They have not been used as raw material in the manufacture of the goods viz., tiles, terra -cotta wares and ceramics. They had been used only as an aid in the manufacture of the goods by the assessee. The Supreme Court held that consumption must be in the manufacture of raw -material or other components which go into the making of the end product to come within the mischief of the Section 5A(1)(a) of Kerala General Sales Tax Act. It was held that cashew shells do not attract levy of tax under that Section. That provision relates to purchase of goods which were consumed in the manufacture of other goods for sale or otherwise. That provision is quite distinct and different from the corresponding provision in Section 6A(a) of APGST Act. From 1.7.1985, the amended provision Section 6A(a) reads as - "consumes such goods in the manufacture of other goods for sale or consumes them otherwise". The expression "consumes them otherwise" is absent in Section 5A of Kerala Sales Tax Act, which fell for consideration before the Hon'ble Supreme Court. This distinction and difference between the two provisions was considered by this Tribunal in its decision in Garden Restaurant, Secunderabad vs. State of Andhra Pradesh reported in, (1997) 25 APSTJ 175. In that case, charcoal and fire -wood were used in the process of cooking food to be served in a restaurant. It was contended before this Tribunal that charcoal and fire -wood were only used to provide heat for the purpose of cooking food and they did not form part of the product manufactured. Relying upon an earlier decision of this Tribunal in M/s. Hindustan Zinc Limited vs. State of Andhra Pradesh (19 APSTJ 194) and another decision of this Tribunal in T.A. 625/95, this Tribunal held in, 25 APSTJ 175 that charcoal and fire -wood though not forming an ingredient of the product have nevertheless been consumed otherwise. This Tribunal took a similar view in its latest order dated 11.6.1999 in T.A. No. 90/96. In T.A. No. 90/96, fire -wood and husk were consumed in the manufacture of Khandasari Sugar. In that order, this Tribunal referred to a decision of A.P. High Court in Sri Ram Khandasari Sugar Mills vs. State Andhra Pradesh reported in (1988) 71 STC 892, wherein, the High Court held that the fire -wood is employed to provide energy and it is too ridiculous to say that fire -wood is not consumed in the manufacture of Khandasari Sugar. It is therefore, clear that even though the fire wood is not used as a raw -material in the manufacture of the end product or as a component, still as it is consumed otherwise in the manufacture of other goods for sale viz., chicory powder and coffee powder, the turnover relating to the firewood is liable for being taxed under Section 6A of APGST Act. It is thus clear that the order of Appellate Deputy Commissioner in appeal is not liable to be set -aside. Accordingly hold this point in favour of the Revenue and against the appellant.