EXPRESS DAIRY COMPANY LIMITED Vs. ASSESSING AUTHORITY

JUDGEMENT

(1.) THIS judgment will dispose of Civil Writs Nos. 2326 of 1965, 906, 916 and 917 of 1968, Express Dairy Company Limited, Calcutta v. The Assessing Authority, Hissar, and Ors. ; and 461 of 1966, Hindustan Gum and Chemicals Ltd. , Bhiwani v. The Assessing Authority, Hissar, and Ors. ; as common questions of law and facts arise in all these writ petitions.

(2.) THE short point for determination is whether "guar giri" or "guar meal" produced by the petitioners is assessable to sales tax under the Punjab General Sales Tax Act, 1948 (hereinafter referred to as the Act ). The petitioners buy guar in the form of grain (cyamopsis peoralicides) and by a manufacturing process in their factories separate the outer skin or husk from the kernel, which is also called "middling", and is commercially known as "guar meal". Gum is manufactured from the outer skin of husk which is exported to the United States of America, while the inner portion called "guar meal" is used as a fodder for feeding animals in India on account of its high protein content. This assertion of the petitioners about the use of the guar meal has not been denied in the written statements, nor has been contradicted by the assessing authorities passing the orders of assessment. It has been stated in the petition that this matter was considered by the Additional Assistant Excise and Taxation Commissioner, Punjab, in Sales Tax Revision Petition No. 289 of 1962-63, and in an exhaustive order it was held that "guar giri" or "guar flour" was nothing but a cattle feed and, therefore, exempt from the payment of sales tax under item 54 of Schedule 'b' to the Act. On behalf of the respondents, it has been stated that this order was reversed by the Financial Commissioner in a further revision. The matter has been recently considered by the Sales Tax Appellate Tribunal, Haryana, in S. T. A. No. 91 of 1970-71, Hindustan Gum and Chemicals Limited, Bhiwani v. Haryana State, and it has been held that "guar meal" is fodder within the meaning of item 54 in Schedule 'b' to the Act, as it is only used for the purpose of feeding the cattle. The present petitions have been filed against the orders of the Assessing Authority because of this conflict in the department.

(3.) IN order to appreciate the arguments advanced by the learned Counsel for the parties, it is necessary to state the history of the item concerning "guar" and "guar flour" in Schedule 'b' to the Act. The Act was enacted in 1948 and came into force with effect from 1st May, 1949. Schedule 'b' to the Act, as originally enacted, contained items 1 to 14 relating to certain foodgrains and their flours and pulses but did not contain "guara and its flour". "guara and its flour" was inserted as item 13-A in Schedule 'b' to the Act by the East Punjab General Sales Tax (Amendment) Ordinance, 1949, which was promulgated on 14th April, 1949, and was published in the East Punjab Gazette Extraordinary dated 16th April, 1949. Thus, when the Act came into force on 1st May, 1949, guara and its flour" was included in Schedule 'b' to the Act amongst foodgrains and pulses, from which the intention of the Legislature seems to be evident that guara and its flour" was considered to be foodgrains. At that time fodder did not find place in Schedule 'b' to the Act, which relates to goods which are exempt from the payment of sales tax. This Schedule is prepared under Section 6 of the Act. Item 54 "fodder of every type (dry or green)" was inserted in Schedule 'b' to the Act by the Punjab Government Notification No. 2183-Eandt (CH)-54/533, dated the 20th of May, 1955, which was published in the Punjab Government Gazette dated the 27th of May, 1955. Items 1 to 14, including 13-A, and item 54 continued in Schedule 'b' till 19th April, 1958, on which date items 1 to 14 were omitted from Schedule 'b' by the East Punjab General Sales Tax (Amendment) Act No. 7 of 1958.