COMMISSIONER OF SALES TAX Vs. SAGAR BONE MILLS

JUDGEMENT

(1.) IN this reference under Section 44 (1) of the Madhya Pradesh General Sales Tax Act, 1958, at the instance of the Commissioner of Sales Tax the questions which the Sales Tax Tribunal has referred to this Court for decision are :

(2.) THE assessee Messrs Sagar Bone Mills, Sagar, is engaged in the business of manufacturing crushed bones and bone-meal. In the proceedings for assessment of sales tax for the period from 1st September, 1960, to 28th February, 1961, the assessee raised the contention that as crushed bones and bone-meal were exempt from tax under the M. P. General Sales Tax Act, 1958, no sales tax could be levied on sale transactions of crushed bones and bone-meal. This contention was rejected by the Sales Tax Officer, Sagar, who accordingly made an order of assessment on 9th June, 1961. This order of the Sales Tax Officer was upheld in appeal by the Appellate Assistant Commissioner. In the second appeal which was then filed before the Sales Tax Tribunal by the assessee, the Tribunal took the view that under the M. P. General Sales Tax Act, 1958, as also under the Central Provinces and Berar Sales Tax Act, 1947, fertilizers were exempt from tax and that the question whether an article was or was not a fertilizer within the meaning of the relevant entries of the Sales Tax Acts must be decided with reference to the definition of "fertilizer" given in Section 2 (d) of the Fertilizer (Control) Order, 1957. The Tribunal thought that the assessee had not been given an opportunity of establishing the" fact that the product manufactured by it was a "fertilizer" within the meaning of the definition given in Section 2 (d) of the Fertilizer (Control) Order, 1957. Accordingly, the Tribunal remitted the matter to the Sales Tax Officer for decision observing :if it is found that the sample or samples from the product of the appellant-firm conform to the minimum standard laid down in the Fertilizer (Control) Order he can surely claim exemption under the M. P. General Sales Tax Act or the C. P. and Berar Sales Tax Act as the case may be. On remand the assessing authority should proceed as above and take a decision in accordance with the analytical reports.

(3.) THE period of assessment involved in this reference is governed fully by the provisions of the M. P. General Sales Tax Act, 1958. Schedule I of that Act enumerates goods exempt from sales tax ; and the enumeration contains as item No. 22 "fertilizer other tha oil-cakes. " Thus, fertilizers other than oil-cakes are exempt from tax. It is, however, not necessary to consider whether crushed bones and bone-meal fall within entry No. 22 of Schedule I. The reason is that entry No. 11 of Part III of Schedule II read with entry No. 2 of Schedule III specifically subjects "bones of animals including powdered bones, horns and hoofs" to tax. Therefore, even if crushed bones and bone-meal were to be taken as fertilizers within the ordinary meaning of the term "fertilizer", yet the exemption granted by entry No. 22 of Schedule I would not be operative in the face of entry No. 11 of Part III of Schedule II, read with entry No. 2 of Schedule III, making transactions of bones of animals including powdered bones expressly subject to tax. It cannot be denied that bone-meal or crushed bones are "bones of animals" which include powdered bones. The three entries referred to earlier must be read harmoniously, and, so read, their effect is clearly to impose sales tax on bones of animals which include crushed bones and bone-meal.