TaxTMI 
TaxTMI 
2025 (9) TMI 188
X X X X Extracts X X X X
X X X X Extracts X X X X
....all the above assessment periods. 3. The Commercial Tax Appellate Board, Bhopal, by a consolidated order, has referred the questions of law for the opinion of this court arising out of the dispute regarding the taxability of "Maize Oil & Maize Cake" manufactured & sold by the applicant. These tax references arise out of reference applications filed by the applicant: M/s Tirupati Starch & Chemicals Ltd. Indore under Section 70(1) of the Madhya Pradesh Commercial Tax Act, 1994 registered as Reference Case Nos.71/CTAB/05, 72/CTAB/05, 73/CTAB/05, 29/CTAB/05, 30/CTAB/05 & 2/CTAB/10 pertaining to the assessment periods from 01.04.1994 to 31.03.1999. 4. The applicant is engaged in the manufacture & sale of Maize Starch, Dextrose, Gluten, Maize Oil, Maize Cake & allied products. The principal place of business is at Indore & the factory is situated at Ghata Billod in District Dhar. The process of manufacturing starch yields, apart from starch itself, certain derivatives such as Maize Oil & Maize Cake are by-products. 5. For various assessment periods from 01.04.1994 to 31.03.1999, the applicant was assessed under the provisions of the M.P. Commercial Tax Act, 1994. The Assistant C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sed substantial questions of law touching the nature & classification of Maize Oil & Maize Cake, the Board vide order dated 16.11.2011 decided to refer the same to this court for adjudication : 1. "Whether, on the facts & in the circumstances of the case, the M.P. Commercial Tax Appellate Board was justified in law in holding that "Maize Oil & Maize Cake " are by-products of Maize starch?" 2. "If the answer to question No.1 is the negative, whether "Maize oil & Maize cake" are by products of Maize, a cereal & if so, whether they are covered under schedule I, entry 91 (ii) of M.P. Commercial Tax Act, 1994 specifying therein "by products" of cereals & food grains," as stood at the relevant time?" 3. * "Whether the Appellate Board was right in law in holding that entry 38 of part V of schedule II to the M.P. Commercial Tax Act, 1994 specifying "vegetable & edible oil except hydrogenated vegetable oil" was a specific entry?" * "If the answer to question No.1 is that Maize oil & Maize cake are by-products of Maize, whether they are covered under entry 91 ii) of Schedule 1 to the M.P. Commercial Tax Act, 1994 specifying therein "By-products of cereals ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d on Maize oil & Maize cake. The attempt of the Department to classify these items under Entry 38 of Part V of Schedule II, which refers to vegetable and edible oil except hydrogenated vegetable oil and Entry 15 referring to oil cake, including de-oiled cake, is misconceived. The general scheme of the fiscal act is that where a commodity is exempted under Schedule I, the same cannot be brought into the tax net through a general entry in Schedule II. Thus, it is prayed that the referred questions be answered in favour of the applicant, holding that Maize oil & Maize cake are by-products of Maize starch and covered under Entry 91(ii) of Schedule I and consequently, no tax should be levied. Submission of Respondent/ State 10. Shri Bhuwan Gautam, learned Government Advocate for the respondent, supported the orders of the assessing authority and the Board and submitted that Maize oil & Maize cake cannot be treated as mere incidental or residual by-products of starch as they are independent commodities known in trade & commerce with separate commercial identity and use. He further submitted that Maize oil is directly marketed and sold as a cooking medium and edible oil, while Maize....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... cake are also the products of the applicant, apart from the starch, which are being sold in the market. In the dictionary meaning the byproduct means 'an incidental or secondary product made in the manufacturing of something else'. The learned Tax Board has held that the Maize oil & Maize cake can be a by-product of starch but not the by-product of Maize, and Maize is a cereal. The main manufacturing product of the applicant is starch from Maize or Makka, and during this process, Maize oil & Maize cake are manufactured as by-products, but they have an independent identity in the market. Therefore, the learned Board has rightly said that the Maize oil & the Maize cake are the by-products of starch and not the by-product of Maize or Makka, which is a cereal. Under Entry 91 of Schedule I, by-products of cereal are exempted and the starch is not cereal, whereas Maize or Makka is a cereal which was not considered by the Division Bench while deciding Raja Ram & Bros. v. CCT, M.P. (supra). 13. By-product of a cereal is a general entry under Entry 91 of Schedule I, whereas vegetable & edible oil are a specific entry under Entry No.12 of Part 6 of Schedule II. Admittedly, Maize oil & th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t to the residuary entry. The revenue cannot be permitted to travel to the residuary entry when the product can be covered under the specific entry, but in the present case, the applicant is relying on a residuary entry, whereas the revenue is insisting that so-called by-product Maize oil & the Maize cake are covered under the specific entry as an independent product. 15. In the present case, the applicant is relying on a general entry, whereas, as per the case of the Department, there is a specific entry for vegetable oil & vegetable cake. Therefore, instead of applying the general entry/residuary entry that all the by-products of cereals are exempted, the applicant is not entitled to exemption. 16. The applicant is admittedly engaged in the manufacturing of starch, dextrose, gluten, Maize oil, Maize cake and their sale. Therefore, the applicant is manufacturing and selling Maize oil & Maize cake as independent products along with other products. By chance, they are being manufactured while manufacturing the main product, i.e. starch. Admittedly, starch is not exempted; therefore, its by-products, Maize oil & Maize cake, cannot be treated as exempted. 17. Therefore, the q....