TaxTMI 
TaxTMI 
TaxTMI 
1988 (9) TMI 52
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....fers an exemption from sales tax in respect of certain goods. It provides that: 'Subject to such restrictions and conditions as may be prescribed including conditions as to licence fees, a dealer who deals in the goods specified in the Fourth Schedule shall be exempt from tax under this Act in respect of such goods.' Entry 7 in the Fourth Schedule was 'tobacco and all its products'. 3. The Andhra Pradesh High Court in Amara Purushotham Mamidi Obaian & Co. v. State of AP. -1962 (29) STC 654, was called upon to consider whether tobacco seed, tobacco seed oil and tobacco seed cake were exempt from sales-tax under the above provision. The Bench held that tobacco seeds could be said to be tobacco only so long as they remain attached to the plant. They, however, ceased to be tobacco the moment they are removed from the plant. Thereafter, they may be considered to be a product of tobacco. But they constitute a separate and a distinct class of goods with independent properties and potentialities not the same as those of the parent plant. Products manufactured out of tobacco seed could not be said to be products of tobacco. The Court, in this context, referred to the analogy of cotton se....
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....evied by any State are subject from 1st April, 1958 to the restrictions in Section 15 of the Central Sales Tax Act, 1956." In short, the object of the Act was to substitute additional duties of excise in place of sales tax so far as these goods were concerned. Since the State Legislatures were at liberty, if they wished, to levy taxes on the sale or purchase of these commodities, the Act provided that the additional excise duties will be distributed only among such States as did not levy a tax on the sale or purchase of these commodities. Also, by including these goods in the category of goods declared to be of special importance in inter-State trade or commerce, the legislation ensured that, if any State levied sales tax in respect of these commodities, such levy was subject to the restrictions contained in the Central Sales Tax Act, 1956. 6. Apparently, the intention of the Andhra State Legislature when the Amendment Act of 1970 was introduced was to exempt certain goods from the purview of sales tax because they also came within the purview of the levy of additional duties of excise under Act 58 of 1957. This is the reason why the Explanation to the entries in the Fourth Sched....
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....em 4 of Schedule I to the Central Excises and Salt Act of 1944 does not bring "tobacco seed" within its purview, and therefore, tobacco seed is not exempted from the levy of sales tax under the A.P. General Sales Tax Act, since tobacco seed does not fall within the meaning of the word 'tobacco' as defined in the Fourth Schedule to the A.P. General Sales Tax Act. It is clear in view of this conclusion of ours that since tobacco seed is not 'tobacco' for purposes of exemption under Section 8 of the Act, much less can tobacco seed oil or tobacco seed oil-cake or tobacco seed cake can be said to be tobacco for the purposes of this exemption." The Bench, therefore, denied the exemption to the appellants/petitioners before us and hence these petitioners/appeals. 10. Before us, it is urged on behalf of the assessees that the word "tobacco", in its ordinary connotation, takes in the tobacco plant and every part of it, including the seed. The definition also make it clear that it takes in every form of tobacco, manufactured or unmanufactured. Thus tobacco seeds, not only when they are in their raw unmanufactured state but also when, on manufacture, they manifest themsel....
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....ing which, for the purposes of the Act, must invariably be attached to these words or expressions.' [Underlining ours] 13. Looking, therefore, at the terms of the definition more closely, it is quite clear that tobacco seeds do not fall within the second or inclusive part of the definition. This part of the definition is important. It specifically excludes from the definition any part of the tobacco plant so long as it is still attached to the earth. It makes mention only of parts of the plant after it is severed from the earth. It is common knowledge that when a plant is severed from the earth, its parts will comprise of not only the leaves, stalks and stems but also the seeds. Yet the inclusive part of the definition enumerates only the leaves, stalks and stems and, deliberately one should think, avoids mention of seeds. 14. Can then the words "tobacco" and "any form of tobacco" in the first part of the definition be given a wider meaning and read as including the seeds also, particularly as it talks of tobacco in any form, cured or uncured, manufactured or unmanufactured? We do not think they can be for several reason. In the first place, tobacco seeds hardly....
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.... seeds are only used for the manufacture of oil and cake. We are told that the oil is used as an ingredient in the manufacture of scents and the cake as manure. Having regard to all this, we agree with the High Court that tobacco seed once it is separated from the plant, is an item entirely different from tobacco and does not fall within the expression 'tobacco or any form of tobacco'. 15. We would like to add that, even if by stretching the language somewhat, tobacco seeds can be brought within the first part of the definition, the oil and cake we are concerned with here cannot. This again, we say, for two reasons. In the first place, as discussed earlier, tobacco seed oil or cake can hardly be said to be a form of the tobacco seed. It is true that one can say that it is the contents of the seed that have manifested themselves, on being crushed, into two forms the oil and the cake. But this is not enough. The definition requires that the item in question should be a form of the tobacco seed that is manufactured. While, as already pointed out, the leaves, stalks and stems even after manufacture retain the form of tobacco, the complete metamorphosis of the seed on its manufacture r....