Sales tax classification of peas and chick-peas turned on schedule entries and determined different tax treatment.

Peas and peas-dhall were held not to fall within item 6-A(iv) of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959, but within item 80 of the First Schedule, so the higher tax incidence, including surcharge, additional surcharge and additional sales tax, applied. Chick-peas were held to fall within item 6-A(iv) of the Second Schedule and not item 80(b) of the First Schedule, so their turnover could not be taxed beyond 4 per cent and no surcharge or additional levies could be imposed. The common classification dispute was thus resolved by treating peas and peas-dhall as general schedule goods and chick-peas as concessional schedule goods.

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Issues: (i) Whether peas and peas-dhall fall under item 6-A(iv) of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959 or under item 80 of the First Schedule; (ii) Whether chick-peas fall under item 6-A(iv) of the Second Schedule or under item 80(b) of the First Schedule.

Issue (i): Whether peas and peas-dhall fall under item 6-A(iv) of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959 or under item 80 of the First Schedule.

Analysis: The Court followed its earlier determination on the same classification question and held that peas and peas-dhall are not covered by item 6-A(iv) of the Second Schedule. They are covered by item 80 of the First Schedule, with the result that the higher incidence of tax, including surcharge, additional surcharge and additional sales tax, applies.

Conclusion: This issue was decided in favour of the Revenue and against the assessees.

Issue (ii): Whether chick-peas fall under item 6-A(iv) of the Second Schedule or under item 80(b) of the First Schedule.

Analysis: The Court held that chick-peas fall under item 6-A(iv) of the Second Schedule and not under item 80(b) of the First Schedule. As a result, the sales turnover of chick-peas could not be taxed beyond 4 per cent, and surcharge, additional surcharge and additional sales tax could not be levied on that turnover.

Conclusion: This issue was decided in favour of the assessees and against the Revenue.

Final Conclusion: The common classification question was answered by placing peas and peas-dhall in the general schedule entry and chick-peas in the concessional schedule entry, with the result that the Revenue's revisions succeeded overall.

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