TaxTMI 
TaxTMI 
1990 (8) TMI 371
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that carbon dioxide is exigible to tax at the point of first sale in the State as per entry 106 of the First Schedule to the Act. It is again common ground that the petitioners have paid tax on the purchase of carbon dioxide. For the assessment year 1985-86, their turnover relating to carbon dioxide amounting to Rs. 1,02,98,958 was subjected to tax at 10 per cent by the Revenue overruling the objections of the petitioners that the carbon dioxide having been already subjected to tax at the point of first sale, cannot again be subjected to tax at the hands of the petitioners. The stand taken by the Revenue seems to be that the carbon dioxide purchased by the petitioners with some impurities was a different commodity from the one sold by the petitioners after removing impurities. Hence, according to the Revenue the carbon dioxide is exigible to tax at the hands of the petitioners when sold to the consumers. This view of the Revenue has been confirmed by the Tribunal. The Tribunal in its order has observed as follows: "In this instant case we find that the appellant had purchased gas and what he has sold is distinct and different commercial commodity. There are two grades of gas. One....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the payment of excise duty by the petitioners has been misunderstood by the Tribunal without appreciating the circumstances under which the petitioners paid the excise duty. It is stated that SPIC and Madras Fertilisers Limited were remitting Central excise duty for a considerable period on their manufacture of carbon dioxide and the petitioners opted to remit duty under rule 56-B read with Chapter X, as even the process of filling for marketing was within the extended definition of "manufacture" under section 2(f) of Central Act 1 of 1944 and by undertaking payment of excise duty by the petitioners, the benefit of exemption for supplies to industries, Governments and hospitals could be availed of by them. Therefore, the payment of excise duty does not in any way change the position regarding the levy of sales tax on the carbon dioxide sold by the petitioners. Another ground on which reliance was placed by the Revenue as well as the Tribunal to hold that what was purchased by the petitioners was different from what was sold, was the price difference between the price paid by the petitioners on their purchase and the price charged by the petitioners on their sales. This has been e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....---------------------------- 106 Gases (other than those specified in At the point of 10 item 159) in compressed, liquefied or first sale in the solidified form). State. ----------------------------------------------------------------------------- Before proceeding further, it is necessary and useful to note the activities of the petitioners in removing the impurities from the carbon dioxide purchased by them from Madras Fertilisers Limited and SPIC. Carbon dioxide (CO2) purchased from Southern Petro Chemical Industries Corporation and Madras Fertilisers Limited is received in compressed form at a pressure of 150 to 200 psi (pounds per square inch) as against the normal atmospheric pressure of 14 to 15 psi. The gas is passed through a potassium permanganate scrubber and then through sodium carbonate solution and finally given a waterwash. Impurities such as overflow traces and contaminations are removed in the process. The gas is then passed on through the compressor to the intercooler where it is cooled with water and sent to the trap for removal of moisture and oil. This is repeated second time and sent to a dehumidifier which is an alumina gel dryer which removes moisture fro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it of the deduction from the turnover cannot be denied, unless the hydrogenated groundnut oil has ceased to be 'groundnut oil'. To be groundnut oil, two conditions have to be satisfied. The oil in question must be from groundnut and secondly the commodity must be 'oil'. That the hydrogenated oil sold by the appellants was out of groundnut not being in dispute, the only point is whether it continues to be oil even after hydrogenation. Oil is a chemical compound of glycerine with fatty acids, or rather a glyceride of a mixture of fatty acids-principally oleic, linoleic, stearic and palmitic-the proportion of the particular fat varying in the case of the oil from different oil-seeds and it remains a glyceride of fatty acids even after the hardening process, though the relative proportion of the different types of fatty acids undergoes a slight change. In its essential nature therefore no change has occurred and it remains an oil-a glyceride of fatty acids-that it was when it issued out of the press. In our opinion, the learned Judges of the High Court laid an undue emphasis of the addition by way of the absorption of the hydrogen atoms in the process of hardening and on the consequen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stomers and that the conversion of latex into sheets was a process essential for the transport and marketing of the produce: Held, that the onus of proving that the assessee was carrying on business and was, therefore, a 'dealer' within the meaning of section 2(b) of the Central Sales Tax Act, 1956, was op the department and that the department had not discharged that onus." The Supreme Court again in State of Tamil Nadu v. Pyare Lal Malhotra [1976] 37 STC 319, held as follows: "As we all know, sales tax law is intended to tax sales of different commercial commodities and not to tax the production or manufacture of particular substances out of which these commodities may have been made. As soon as separate commercial commodities emerge or come into existence, they become separately taxable goods or entities for purposes of sales tax. Where commercial goods, without change of their identity as such goods, are merely subjected to some processing or finishing or are merely joined together, they may remain commercially the goods which cannot be taxed again, in a series of sales, so long as they retain their identity as goods of a particular type." The Supreme Court in Alladi Venkat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ditional Bench, Coimbatore, in C.T.A. No. 459 of 1970, has been approved by a Division Bench of this Court in Deputy Commissioner (C.T.) v. Meenambika Trading Co. (T.C. No. 609 of 1980 dated 9th August, 1980). Ismail, C.J., speaking for the Bench, has held as follows: 'The only question that the Tribunal had to consider in the present case was, whether the fried and parched gram will fall within entry 6-A of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959. The entry itself uses the expression "pulses, that is to say, gram or gulab gram, etc.". It does not say whether parched or fried or not. Consequently the Tribunal had to consider what exactly the change that is brought about on a gram being parched or fried. The Tribunal referred to the meaning given for the word "parch" in the Chamber's 20th Century Dictionary as "to make hot and dry, to roast slightly". If that is the correct meaning of the word "parch", certainly by being parched, gram did not undergo such a change as to make it commercially a different commodity. If so, entry 6-A was rightly held applicable and consequently, the order of the Tribunal does not call for interference. The tax revision case is....