TaxTMI 
TaxTMI 
TaxTMI 
2014 (4) TMI 327
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....ventional retail stores, for kitchen use as food ingredients and household purposes. It was also further argued that like any other nuts, dry fruits when roasted or fried and after adding salt, become snacks/namkeen. Consequently, roasted and fried dry fruits are not kirana items. The appellant dealer had contended that only ararote is the illustration of a kirana item (in entry 81) and rest of the items including dry fruits are independent items. It also argued that if the article retains its essential character upon some processing, it has to be taxed as such article only and the processing would make no difference. The physical state or even the composition may change but so long as the essential character of the article continues to remain the same it has to be taken as that commodity itself. 3. The Commissioner, VAT in his determination under Section 84, rejected the dealer's submission, inter alia, reasoning that: "6....................In this case, it is perhaps relevant to refer to a similar entry of the article "Fried and Roasted Grams" at Sl. No.31, Schedule III of the DVAT Act making it taxable @ 5%. The same article when taken in raw form as 'pulses', then it is an ex....
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....ts to both processes results in the creation of a new article or commodity and the essential characteristic of the dry fruits remain the same. Likewise, reliance was placed on Commissioner of Sales Tax v Bombay Traders 1976 (384) STC 286 (Bom) - a case where it was held that "7......................fried and salted cashew nuts sold by the assessees could not be said to be a new or different commercial commodity from the plain cashew-nuts, which had been purchased by the assessees...". 7. It was argued that the mere processing of an article or commodity for the purposes of packaging etc. would not amount to "manufacture" as to result in that article's transformation. Reliance was placed on Dy. Commissioner of Sales Tax (Law) v M/s Pio Food Packers AIR 1980 SC 1227 where it was held that: "5....it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place. Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say ....
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....ts so as to decide the reference under Section 61(1) of the Bombay Sales Tax Act 1959. The particular entry was not in question in the cited case. As already discussed neither the determination is excessive use of jurisdiction by the respondent nor a case of determination in an arbitrary or illegal manner. Rather determination as sought by the appellant from the Ld. Commissioner has to be answered with a logic so as to visualize the intention of the legislature when he referred to a different entry for fried and roasted grams in Schedule III as entry 31 in addition to entry 46 of Schedule I in respect of the same article i.e, grams. In the present case the legislature has not been deemed it fit to place fried and roasted cashew nuts in a different entry then the entry no. 81 of III Schedule with regard to kirana item including "dry fruits". This Tribunal is of the considered view that there is no fault in the findings by Ld. Commissioner while passing 'the impugned orders' with the observations that had similar intention was there of the legislature, they would have clearly specified fried and roasted dry fruits as separate entry in the appropriate schedule which they had n....
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....nated oil continues even after the change to be "groundnut oil ". If it is, it would be entitled to the benefit of the deduction from the turnover, or to put it slightly differently, the benefit 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 t....
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.... of packing and transport without leakage, hydrogenated oil serves the same purpose as a cooking medium and has identical food value as refined groundnut oil. There is no use to which the groundnut oil can be put for which the hydrogenated oil could not be used, nor is there any use to which the hydrogenated oil could be put for which the raw oil could not be used. Similarly we consider that hydrogenated oil still continues to be "groundnut oil" notwithstanding the processing which is merely for the purpose of rendering the oil more stable thus improving its keeping qualities for those who desire to consume groundnut oil. In our opinion the assesseecompany was entitled to the benefit of the deduction of the purchase price of the kernel-or groundnut, under r. 18(2), which went into the manufacture of the hydrogenated groundnut oil from the sale turnover of such oil." 13. What is meant by "process" was considered in a later decision of the Supreme Court in Collector of Central Excise, Jaipur v. Rajasthan State Chemical Works, Deedwana, Rajasthan, 1991 (4) SCC 473, in the following words: "14. The natural meaning of the word 'process' is a mode of treatment of certain materi....
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....tests evolved by this Court is whether on account of the processes employed or applied by the assessee, the commodity so obtained is no longer regarded as the original commodity but is, instead, recognised as a distinct and new article that has emerged as a result of the processes." 15. The rulings and the views expressed in these decisions show that if an article undergoes some modicum of transformation pursuant to a process, then alone would it be said that a manufacturing activity takes place. Conversely, if the essential characteristic or nature of the article does not change, notwithstanding the use of some process, there is no manufacture. If that test - and a constant one - is applied, it can be seen that the process of roasting or salting does not change the quality or essential nature of the article - its use is the same, i.e as a dry fruit. It is even described as "dry fruits". That roasted and salted dry fruits can be used as snacks does not detract from their function as dry fruits; some can even continue to be used as cooking ingredients. Therefore, the Court is of the opinion that the article does not undergo any manufacturing process as to transform from the descrip....