TaxTMI 
TaxTMI 
TaxTMI 
1981 (11) TMI 194
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....sc. Petn. No. 9 of 1981 decided on 16-11-1981. (Jabalpur) of tax. We are here concerned with section 4 (1) and clause (i) of the first proviso to that section which read as follows: Section 4. Rate at which entry tax to be charged:-(1) The entry tax payable by a dealer under this Act shall be charged on his taxable quantum relating to goods specified in Schedule II and Schedule III at the rates mentioned in the said Schedules: Provided that notwithstanding anything contained in this sub-section and subject to such conditions and restrictions as may be prescribed:- (i) The entry tax payable in respect of goods specified in Schedule II (other than those specified at serial numbers 3, 13 and 14 thereof) or Schedule III which are consumed or used as raw material for the manufacture of other goods shall be half per cent if the rate of tax specified in Schedule II or Schedule III exceeds half per cent. The relevant entry in Schedule II is entry No. II which reads: "Sugar as defined in item No. I of the First Schedule to the Central Excises and Salt Act, 1944." The rate of tax mentioned against entry No. 11 is 2 per cent. In item No. I of the First Schedule to the Centra....
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....lphur dioxide in concentration not exceeding 70 parts per million. A. 07.01.01.-Refined sugar means the sugar obtained from the juice of sugarcane or sugar beet. It shall be colorless crystals from white powder, odorless and free from added colours, dirt, dust, insect fragments, mite and larvae. It shall conform to the following standards: Sucrose - Not less than 99.8 per cent. Total ash - Not more than 0.3 per cent. Sulphur dioxide content shall not exceed 70 p. p.m. A.07.02. Bura shall contain not less than 96.5 per cent of total sugars expressed as sucrose and shall not contain more than half per cent of its weight as ash insoluble in dilute hydrochloric acid. In the case of Khandsari, the minimum sugar content in terms of sucrose shall not be less than 90 per cent. Bura and Khandsari may contain sulphur dioxide in concentration not exceeding 70 parts per million. The rates of tax applicable for entry tax are the rates mentioned in Schedule II and Schedule III in respect of goods specified therein. Two per cent is the rate mentioned in respect of sugar against Entry No. II in Schedule II. Under section 4 (1) entry tax in respect of sugar is chargeable at the rate ....
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....re is no rigid formula which can be applied for determining this question. There are a number of Supreme Court cases which illustrate the application of this principle. In Anwarkhan Mahboob Co. v. State of Bombay AIR 1961 SC 2I3, bidi patti was held to be a different commercial commodity into which tobacco was converted. In A. H. Abdul S. & Co. v. State of Madras AIR 1964 SC 1729 it was held that raw hide s and skins constituted a different commodity from dressed hides and skins with different physical properties. In State of Madras v. Swastik Tobacco Factory AIR 1966 S C 1000 chewing tobacco was held to be manufactured from raw tobacco. In Ganesh Trading Co., Karnal v. State of Haryana AIR 1974 SC 1362 and in State of Karnataka v. B. Raghurama Shetty AIR 1981 SC 1206 it was held that in the process of rice milling paddy was consumed for manufacture of rice, i.e. paddy and rice were different commercial commodities. In Kathiwar Industries Ltd. v, Jaffrabad Municipality A I R 1979 S C 1721 it was held that crushed salt was a different commercial commodity from uncrushed salt which underwent a process of manufacture while being crushed in the factory. In Hindustan Aluminium Corpn. v.....
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....ust emerge, having a distinctive name, character or use.... At some point processing and manufacturing will merge. But where the commodity retains a continuing substantial identity through the processing stage we cannot say that it has been 'Manufactured.' " This test was approved by the Supreme Court in the case of Dy. Commr. Sales Tax, Ernakulam v. Pio Food Packers (supra). The question then is : does the sugar lose its identity in undergoing the process which is described by the petitioner for changing it into Bura ? We have already noticed the standards prescribed for cane sugar and Bura in the Prevention of Food Adulteration Rules. Both contain not less than 96.5 per cent of sugar as sucrose. The only difference is that cane sugar is crystallized sugar and Bura is amorphous sugar. Sugar after being processed for making Bura retains a "continuing substantial identity" and it is not possible to hold that the processing reaches the stage of manufacture or that Bura is a different commercial commodity from sugar. This conclusion is further strengthened by noticing that all forms of sugar are treated as one category of goods by Parliament and the State Legis....