TUNGABHADRA INDUSTRIES LTD Vs. COMMERCIAL TAX OFFICER KURNOOL

JUDGEMENT

(1.) THE interpretation of rules 18(2) and 5(1)(g) of the Turnover and Assessment Rules framed by the Government in exercise of the powers conferred by rule 3, sub-rules (4) and (5), of the Madras General Sales Tax Act is involved in this Revision Case. The dispute relates to the assessment year 1949-50. The petitioner is registered as a manufacturer under rule 18. The assessee-company purchases groundnuts and converts them into oil both refined and hydrogenated. A deduction was claimed both under rule 18(2) and rule 5(1)(g). The department declined to grant the deduction under both the heads on the ground that in the first case the oil sold by the petitioner was not the same commodity which was obtained by pressing the kernel and in regard to the second that the freight was not included in the price of the commodity as contemplated in rule 5(1)(g).

(2.) ON appeal, the Sales Tax Tribunal allowed the deduction in respect of refined oil but refused it with regard to the hydrogenated oil and freight charges. The Tribunal held that the hydrogenated oil otherwise called Vanaspathi was not the same thing as the oil obtained from crushing the groundnut and therefore fell outside the cope of rule 18(2). As regards the freight charges it was decided that the benefit under rule 5(1)(g) was not available to the petitioner as it was not shown as something different from the price of the goods sold.

(3.) WE will first deal with the claim for deduction under rule 5(1)(g) of the Turnover and Assessment Rules, as it can be disposed of easily. The contention of Mr. Rajah Ayyar in this behalf is that deduction is allowable in the case of freight charges as they are shown as separate items in the bills. In order to appreciate this argument, it is necessary to refer to the relevant rule :-