COASTAL GASES & CHEMICALS PVT. LTD. Vs. THE STATE OF ANDHRA PRADESH
SALES TAX TRIBUNAL
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R. Bayapu Reddy, Chairman -
(1.) THIS appeal is filed questioning the orders of the Appellate Dy. Commissioner (C.T.), Kakinada in Appeal No. VSP. 249/87 -88 dated 1 -12 -1988, by which the orders of the assessing authority (Commercial Tax Officer. Company Circle, Visakhapatnam) in Assessment No. 4885/85 -86, dt. 29 -10 -87 subjecting the disputed turnover of Rs. 27,67,996/ - relating to sales of 'Liquid Carbon Dioxide' to tax were confirmed. The appellant is a dealer in CO Gas and is an assessee on the rolls of the Commercial Tax Officer, Company Circle, Visakhapatnam. During the present assessment year the assessing authority subjected the disputed turnover of Rs. 27,67,996/ - relating to sales of Liquid Carbon Dioxide (CO) to tax. The appellant claimed exemption on the said turnover on the ground of second sales contending that he had purchased impure Carbon Dioxide (Gas) from M/s. Coromandel Fertilisers Limited and removed such impurities by adopting certain process and sold the pure 'Carbon Dioxide' which remained the same commodity as was purchased and that therefore the sale effected by him amounts to second sales. The assessing authority refused to accept such contention and subjected the disputed turnover to tax observing that there was manufacturing process involved in bringing out the pure Liquid Carbon Dioxide which was sold by him, that such 'liquid carbon dioxide' is commercially a different commodity from the impure carbon dioxide purchased by the appellant, and that therefore the sale effected by the appellant amounts to first sale. The appellant preferred appeal before the Appellate Deputy Commissioner questioning the said orders of the assessing authority and as the appeal was dismissed, the appellant filed the present appeal before this Tribunal.
(2.) THE point for consideration is whether the appellant is entitled to claim exemption on the disputed turnover on the ground of second sales? The appellant purchased impure gas in compressed form consisting of carbon dioxide of 98% by volume and subjected the same to certain process for removing the impurities and sold such CO gas containing carbon dioxide of 99.03% by volume. The assessing authority treated such sales of gas effected by the appellant as first sales on the ground that what was sold by him is commercially a different commodity from what was purchased by him. The Appellate Deputy Commissioner also accepted such view expressed by the assessing authority. But such view expressed by the lower authorities cannot be accepted in view of the nature of the commodity and the facts and circumstances of the case. The appellant has filed the certificates issued by the Coromandel Fertilisers Limited regarding the analysis of carbon dioxide sold by it to the appellant and also the certificate issued by the Head of the Department of Physical and Nuclear Chemistry and Chemical Oceanography in the College of Science and Technology of Andhra University regarding the analysis of carbon dioxide sold by the appellant to his customers. The particulars of such analysis of the carbon dioxide purchased and sold by the appellant are as follows:
It is clear from the above said analysis of the carbon dioxide purchased and sold by the appellant that the appellant had merely subjected the carbon dioxide purchased by him to certain processing only for the purposes of removing the impurities and that the material sold by him even after by removing such impurities still remained 'carbon dioxide'. Therefore, there is no change in the identity of the commodity purchased and sold by the appellant and the commodity purchased and sold was only carbon dioxide (CO). It is therefore clear that the sale of carbon dioxide effected by the appellant amounts to second sales and eligible for exemption.
(3.) THE learned State Representative appearing for the Department has however tried to contend that the sale of gas effected by the appellant consists of liquid carbon dioxide while the carbon dioxide purchased by him was in compressed form and as such the two commodities cannot be considered as one and the same. But such contention cannot however be accepted in view of the nature of the commodities and the relevant entry relating to gases in the First Schedule of APGST Act. Entry 118 of First Schedule relates to gases and it is as follows:
"118. Fuel gas, such as Burshane, Calgas, Indane, and Esso and other gases in compressed, liquefied or solidified form."
The said gases described in entry 118 are taxable at the point of first sale in the State. It is clear from the entry 118 that compressed as well as liquefied gas are contemplated in the said entry and such gases can be subjected to tax only at the point of first sale in the State. Therefore the appellant who had subjected the impure compressed gas purchased by him to certain process and removed the impurities and brought out liquefied gas cannot be said to have changed the nature of the commodity and such commodities cannot be considered as commercially two different commodities.;
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