TaxTMI 
TaxTMI 
1976 (10) TMI 101
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by the appellant in Peermade Taluk. To manufacture tea grown in those estates, the appellant maintains separate tea factories in each of those estates. On an application made by the appellant for registration under the Central Sales Tax Act, 1956 (Act 74 of 1956) (hereinafter referred to as the Act), the sales tax authorities granted registration certificate to the appellant on January 9, 1963. Aggrieved by the non-inclusion of certain items of goods in the registration certificate. the appellant filed writ petition in the Kerala High Court. The High Court directed the Sales Tax Officer to decide the question regarding the inclusion of items in the light of the decisions of this court in J. K. Cotton Spinning & Weaving Mills Co. Ltd. v. Sales Tax Officer [1965] 16 S.T.C. 563 (S.C.)., and Indian Copper Corporation Ltd. v. Commissioner of Commercial Taxes [1965] 16 S.T.C. 259 (S.C.). The Sales Tax Officer thereafter allowed the inclusion of some of the items of goods asked for by the appellant in the registration certificate but refused to include certain other goods in that certificate. The appellant thereupon preferred an appeal before the Appellate Assistant Commissioner of Sales....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... finished goods. In the opinion of the High Court, the growing of tea-leaves was so integrally connected with the manufacture of tea that it could reasonably be taken as a part of the process of manufacturing tea. This circumstance, however, in the opinion of the High Court, by itself was not sufficient to make the goods eligible for inclusion in the registration certificate. The High Court accordingly observed: "Under rule 13 read with section 8(3)(b), the use of the goods in the manufacture or processing of goods for sale will riot be a sufficient ground for inclusion in the certificate. The further requirement is that the goods must be for use as raw materials or processing materials or machinery, plant, equipment, tools, stores, spare parts, accessories, fuel or lubricants. The first item, namely, fertilisers, chemicals, insecticides, etc., in our opinion, cannot fall within the category of a raw material or processing material or machinery, etc. The learned counsel for the company sought to contend that fertilisers, chemicals, etc., would come within the category of stores mentioned in section 8(3)(b) and that as such it is eligible for specification in the certificate. We a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n (3) of section 8, which a registered dealer may purchase, shall be goods intended for use by him, as raw materials, processing materials, machinery, plant, equipment, tools, stores, spare parts, accessories, fuel, or lubricants, in the manufacture or processing of goods for sale or in mining, or in the generation or distribution of electricity or any other form of power." The question with which we are concerned in this appeal is whether the items of goods in respect of which the prayer of the appellant for being included in the registration certificate was refused, answer to the description of goods as given in the above rule, Mr. Desai on behalf of the appellant has not pressed the case of the appellant in respect of item No. (5), which was found by the High Court to be vague and indefinite. He has also not made any submissions in respect of items Nos. (2) and (3) relating to cement and building materials. The main contention of Mr. Desai has related to item No. (1) pertaining to fertilisers, chemicals, weedicides, insecticides, fungicides and pesticides for use in tea cultivation. According to the learned counsel, cultivation and the growing of tea-leaves was so integr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or of mining. In J.K. Cotton Spinning & Weaving Mills Co. Ltd. [1965] 16 S.T.C. 563 (S.C.)., the appellant manufactured for sale cotton textiles, tiles and other commodities. Certain items of goods in the certificate of registration of the appellant were deleted by the sales tax authorities on the ground that they had been earlier erroneously included in the certificate. This Court in that context dealt with the scope and ambit of section 8(3)(b) of the Act read with rule 13. It was held that the expression "in the manufacture of goods" in section 8(3)(b) should normally encompass the entire process carried on by the dealer of converting raw materials into finished goods. Where any particular process is so integrally connected with the ultimate production of goods that, but for that process, manufacture or processing of goods would be commercially inexpedient, goods required in that process would fall within the expression "in the manufacture of goods". It was further held that the process of designing might be distinct from the actual process of turning out finished goods. But there was no warrant for limiting the meaning of the expression "in the manufacture of goods " to....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... land over which tea-plants are grown. The second element or component consists of non-agricultural income which is the result of subjecting green leaves which are plucked from the tea-plants grown on the land to a particular manufacturing process in the factory of the tea company. Rule 24 of the Income-tax Rules, 1922, and rule 8 of the Income-tax Rules, 1962, prescribe the formula which should be adopted for apportioning the income realised as a result of the sale of tea after it is grown and subjected to the manufacturing process in the factory. Sixty per cent is taken to be agricultural income and the same consists of the first element or component, while 40 per cent represents non-agricultural income and the same comprises the second element or component: see Tea Estate India P. Ltd. v. Commissioner of Income-tax [1976] 103 I.T.R. 785 (S.C.). Fertilisers and the other goods mentioned in item No. (1) are intended for use not in the manufacturing process in respect of tea meant for sale; they are essentially needed for the cultivation and growth of tea-plants and leaves. There is no direct relationship between use of fertilisers and other goods mentioned in item No. (1) and the....