Jaswant Singh, J. - (1.) These appeals by special leave from the common judgment of the Mardars High Court dated March, 5, 1974, in Tax Cas Cases Nos. 77 and 78 of 1974 which involve the interpretation of Section 3 and item No. 21 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 hereinafter referred to as 'the Act', shall be disposed of by this judgment.
(2.) The appellant, Tvl. Shaw Wallace and Co. Ltd., a public limited company, is a registered dealer under the Act and is an assessee on the rolls of the Commercial Tax Officer IV, Central Assessment Circle-23, Madras Amongst other things, the appellant manufactures, and deals in chemical fertilisers. It also prepares fertilisers mixtures. For the assessment years 1969-70 and 1970-71, the appellant claimed exemption on a turnover of Rs. 2,35,01,129.47 and Rs. 2,07,94,490.73 respectively relating to sales of fertiliser mixtures. The case of the appellant was that as the fertiliser mixtures were prepared by dry mixing of various chemical fertilisers (shown as sub-items (1) to (15) of S. No. 21 of First Schedule to the Act) according to the standard formula approved by the Director of Agriculture at its mixing works manually by means of shovels and as the resultant product could not be said to be a commodity different from the ingredients composing it which had been purchased within the State and had suffered tax under item No. 21 of the First Schedule to the Act, they could not be taxed again. The Assessing Officer disallowed the exemption on the entire turnover for the year 1969-70. He, however, allowed exemption on a turnover of Rs. 1,65,44,223.73 which represented the mixture sold after August 6, 1970 - the date when the Tamil Nadu General Sales Tax (Third Amendment) Act (26 of 1970) amending item 21 of Schedule came into force. On appeal, the Appellate Assistant Commissioner (CT) 1, Madras City, found that part of the ingredients which went into the production of fertiliser mixtures had suffered tax under the Act. He, therefore, allowed exemption on the turnover which had suffered tax by following the earlier decision of the Sales Tax Appellate Tribunal, D/- 27-7-1972 in the case of Rallis India Ltd. T. A. No. 114 of 1971, where it was held that there is no manufacture and the resultant product viz. manure mixture is not a different product than the ingredients constituting it which have already suffered tax. The exemption allowed, by the Appellate Asstt. Commr. for the years 1969-70 and 1970-71 amounted to Rs. 1,20,18,842.80 and Rs. 42,38,182.90 respectively. The appellant filed further appeals for both the years under Section 36 (1) of the Act before the Tamil Nadu Sales Tax Appellate Tribunal against the orders of the Appellate Assistant Commissioner. The State of Tamil Nadu also filed enhancement petitions. Since the earlier order of the Sales Tax Appellate Tribunal, D/- 27-7-1972 in T. A. No. 114 of 1971 (supra) which was the basis of the relief granted by the Appellate Assistant Commissioner was reversed by the Madras High Court vide its judgment, D/- 18-9-1973 in T.C. No. 18 of 1973 = (reported in 1975 Tax LR 1701) (Mad) the Sales Tax Appellate Tribunal by its orders Nos. 1138/1139 of 1972 dated February 21, 1974 cancelled the relief granted to the appellant by the Appellate Assistant Commissioner. The appellant thereupon took the matter in revision to the Madras High Court under Section 38 of the Act but its applications were dismissed at the stage of admission by that Court on March 5, 1974 in the light of its earlier judgment, D/- 18-9-1973 in T.C. No. 18 of 1973 (Revision No. 6 of 1973) where it was observed:- "Each of the component article and the manure mixtures have different chemical properties of their own and their use also is different. It is not, therefore possible to treat the manure-mixture as the same article as the components themselves ... Whether the process adopted (in the preparation of manure mixture) is manufacture or otherwise, if the resultant product obtained by mixing the various article of chemical fertilisers referred to in item 21 is sold as a different commercial product and for a different user, it has to be treated as a different article from the components."
(3.) In rendering this decision, the Madras High Court relied on the ratio of the decision of its own Court in Imperial Fertilisers and Co. v. State of Madras, (1973) 31 STC 390 (Mad) to the effect that if the mixture sold has different chemical properties and is treated as a different commodity in commerce, its sale cannot be taken to be a second sale of chemical fertlisers merely because the components have suffered tax at an earlier stage as chemical fertlisers.;