Notified commodity status for loose coconut oil preserved where used as hair-oil; deduction allowed, empty-container estimate sustained.

Coconut oil sold in loose condition was held to remain within the notified hair-oil entry where the relevant notifications and explanatory amendment covered oil used primarily as hair-oil or processed for that purpose; the assessee was therefore entitled to deduction of the corresponding turnover from gross turnover. By contrast, the assessing authority's estimate of sale proceeds from empty containers was sustained because the assessee had filed no return on their disposal and there was no factual basis to disturb the estimate. The assessment was modified accordingly, with relief granted only in respect of the coconut oil turnover.

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Issues: (i) whether coconut oil sold in loose condition during the relevant period was to be treated as a notified commodity and the corresponding turnover deducted from gross turnover; (ii) whether the estimated value of empty containers could be included in gross turnover.

Issue (i): whether coconut oil sold in loose condition during the relevant period was to be treated as a notified commodity and the corresponding turnover deducted from gross turnover.

Analysis: The relevant notifications treated hair-oil as a notified commodity, and the explanatory amendment covered oil sold in packed containers for use as hair-oil or oil processed for that purpose. The sale of coconut oil in loose condition did not, by itself, take away its character as a notified commodity when the commodity was used primarily as hair-oil. On the facts found, the coconut oil sold by the applicants fell within the notified entry for the period covered by the assessment.

Conclusion: The turnover of Rs. 92,428.93 relating to coconut oil was required to be deducted from the gross turnover, in favour of the assessee.

Issue (ii): whether the estimated value of empty containers could be included in gross turnover.

Analysis: The applicants dealt in several kinds of oil and had filed no return regarding disposal of the empty containers. On the facts, there was no basis to interfere with the assessing authority's estimate of sale proceeds from the empty containers.

Conclusion: The inclusion of Rs. 5,000 in gross turnover towards the estimated sale proceeds of empty containers was upheld, against the assessee.

Final Conclusion: The assessment was modified by granting deduction for the coconut oil turnover while sustaining the addition made on account of empty containers, and the application was allowed only to that extent.

Ratio Decidendi: A commodity notified for tax purposes does not lose that character merely because it is sold in loose condition, if the commodity remains one covered by the relevant notification as used primarily for the notified purpose.

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