De-husked watermelon seed held outside seed exemption where it lacked germination capacity and had distinct commercial use.

De-husked water-melon seed was held not to qualify for exemption under the entry for seeds of all varieties because the exemption was construed as covering seeds meant for agricultural or horticultural use. The product had lost the essential character of a seed for sowing, most of the sample consisted of dead seeds without germination capacity, and it had acquired a distinct commercial identity as a processed item used mainly for cooking. It was therefore treated as a taxable commodity under Schedule CA, and the exemption claim was denied on the merits.

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Issues: Whether de-husked water-melon seed falls within entry 35B of Schedule A to the West Bengal Value Added Tax Act, 2003 as seeds of all varieties, or whether it is a distinct commodity liable to tax under Schedule CA.

Analysis: The exemption in entry 35B was construed as relating to seeds meant for agricultural or horticultural use. The item sold by the petitioner was not seed simpliciter but a processed commodity used mainly for cooking purposes. The material showed that most of the sample consisted of dead seeds having no germination capacity. Since the product had lost the essential character of a seed for sowing and had acquired a distinct commercial identity and use, it could not be treated as seed for the purpose of exemption.

Conclusion: De-husked water-melon seed does not fall within entry 35B of Schedule A and is not exempt as seed of all varieties. It is liable to be treated as a taxable commodity under Schedule CA.

Final Conclusion: The petition was rejected on the merits and the exemption claim was denied.

Ratio Decidendi: For exemption entries covering seeds, the relevant test is whether the commodity retains the essential character and germination capacity of a seed for agricultural or horticultural use; a processed commodity sold for a different commercial use is not covered.

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