TaxTMI 
TaxTMI 
1976 (3) TMI 204
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....id Act, and that if the answer to the first question was in the affirmative, then what would be the rate of tax on the sale of fried cashew-nuts. Along with this application, the assessees sent a copy of the purchase bill dated 21st February, 1968, and the sale bill dated 31st May, 1968. As far as the purchase bill is concerned, we are not concerned with the same, because that relates to the purchase of plain cashew-nuts by the assessees. But, as far as the sale bill is concerned, it is made out on the Controller of Stores and Purchases, Santa Cruz Airport, Bombay, and shows that the assessees have sold to the purchaser ten thousand two hundred packets of cashew-nuts, the purchaser being Air-India. Apart from this document, the assessees have also produced at the hearing before the Commissioner a purchase order placed by Air-India on the assessees. The relevant part of this purchase order, showing the nature of the cashew-nuts ordered by Air-India, runs as follows: "Cashew-nuts: of 210 count, best selected whole nuts. Fried lightly without browning and no loosing salt present. To be packed and supplied in heat-sealed transparent cellophane packets of size 75 X 75 mm. bearing our....
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....within the meaning of section 2(17) of the Bombay Sales Tax Act, 1959? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the fried and salted cashew-nuts sold to Air-India under bill dated 31st May, 1968, in pursuance to Purchase Order No. CM-58633 dated 11th April, 1968, in heat-sealed transparent cellophane packets of size 75 X 75 mm. and weighing 30 gm. each were not covered by entry 6 of Schedule E but were covered by entry 5 of Schedule D to the Bombay Sales Tax Act, 1959?" We now propose to consider the first question, as to whether the activity of frying and spicing of the cashew-nuts by the assessees amounted to "manufacture" within the meaning of that term in section 2(17) of the said Act. We may clarify here that although the expression "spicing" had been used, what really the assessees did was that they fried plain cashew-nuts and salted the same. However, we are not reframing the question, because, in our view, whether the assessees salted or spiced the cashew-nuts would not make much difference. Clause (17) of section 2 of the said Act reads as follows: "'manufacture', with all its grammatical variations and....
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.... be said to amount to manufacture, the Tribunal seems to have taken an erroneous view, namely, that even when potatoes were fried and salted they could not be said to be a new commercial commodity or that when chapatis are prepared out of atta, they could not be said to be a new commercial commodity. Mr. Cooper may be right in contending that these examples given by the Tribunal are not correct, and, in those cases, the activity might amount to manufacture. However, we are concerned with the case before us and, on the facts before the Tribunal, the Tribunal has come to the conclusion that fried and salted cashew-nuts sold by the assessees could not be said to be a new commercial commodity from the plain cashew-nuts. No question has been referred to us as to whether this conclusion of the Tribunal was based on no evidence at all and, therefore, strictly speaking, we are not entitled to go into that question at all. Even if we were to do that we find that there was ample material before the Tribunal for the Tribunal to have come to that conclusion. The most important evidence, in this connection, is the purchase order dated 11th April, 1968, where it is significant that Air-India has....
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....ew-nuts were sold in "small plastic bags". Later the Tribunal has stated that both the sides attempted to open the "plastic packet". Ultimately the Tribunal has held: " ...... Considering the actual plastic packing papers and how it can be closed on both sides, we hold that it is a wrapper covering cashew-nuts in order to protect them from moisture and for the purposes of putting the cashew-nuts together and in no sense it could be called a container." Later, there are observations of the Tribunal which show that before them was a simple plastic cover which could be opened and again it could be closed. It is on these facts that the question has to be determined as to whether the Tribunal was right in coming to the conclusion that the cashewnuts sold by the assessees were not packed in sealed containers. In connection with this question, it would be useful to refer to the decision of the Supreme Court in Commissioner of Sales Tax v. G.G. Industries[1968] 21 S.T.C. 63 (S.C.). In that case, the question related to confectionery which was sold in packings of tin and cardboard, which were closed by the use of cellophane paper to protect the contents from being affected by atmosphe....