(1.)This appeal on a certificate under Art. 133 of the Constitution granted by the High Court of Andhra Pradesh raises for consideration principally the question whether hardened or hydrogenated groundnut oil (commonly called Vanaspati) is "groundnut oil" within the meaning of Rule 18(2) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939.
(2.)Tungabhadra Industries Ltd. -the appellant in this appeal-has a factory of considerable size at Kurnool in the State of Andhra Pradesh. The company purchases groundnuts and groundnut kernels within the State and manufactures groundnut oil and also refined oil as well as hydrogenated oil all of which it sells. The appeal is concerned with the assessment to sales-tax of this company for the year 1949-50.
(3.)Section 3 of the Madras General Sales-tax Act, 1939 enacts :
"3. (1) Subject to the provisions of this Act,-
(a) every dealer shall pay for each year a tax on his total turnover for such year; and
(b) the tax shall be calculated at the rate of three pies for every rupee in such turnover.
2. ........... .......... ..........
3. ........... .......... ..........
4. For the purposes of this section and the other provisions of this Act, turnover shall be determined in accordance with such rules as may be prescribed :
Provided that no such rules shall come into force unless they are approved by a resolution of the Legislative Assembly.
5. The taxes under sub-sections (1) and (2) shall be assessed, levied and collected in such manner and in such installments, if any, as may be prescribed :
(i) in respect of the same transaction of sale, the buyer or the seller, but not both, as determined by such rules as may be prescribed, shall be taxed;
(ii) where a dealer has been taxed in respect of the purchase of any goods in accordance with the rules referred to in cl. (i) of this proviso, he shall not be taxed again in respect of any sale of such goods effected by him".
Rules were made by virtue inter alia of these provisions entitled "The Madras General Sales-tax Turnover and Assessment Rules, 1939". Of these, those relevant to the present context are Rules 4 and 5. Rule 4 reads.
"4. (1) Save as provided in sub-rule (2) the gross turnover of a dealer for the purposes of these rules shall be the amount for which goods are sold by the dealer.
2. In the case of the undermentioned goods the gross turnover of a dealer for the purposes of these rules shall be the amount for which the goods are bought by the dealer-