MEAT PRODUCTS OF INDIA LTD. Vs. STATE OF KERALA
HIGH COURT OF KERALA
MEAT PRODUCTS OF INDIA LTD.
STATE OF KERALA
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G. Sivarajan, J. -
(1.) The matter arises under the Kerala General Sales Tax Act, 1963 (for short, "the Act"). The same assessee is the petitioner in all these cases. The assessment years concerned are 1977 -78, 1978 -79, 1979 -80, 1983 -84, 1986 -87, 1987 -88, 1988 -89 and 1989 -90 respectively. The Kerala Sales Tax Appellate Tribunal, Additional Bench, Ernakulam had disposed of a batch of appeals filed by the petitioner and by the State by a common order dated January 29, 2001. The present revisions arise from T.A. Nos. 627 of 1995, 911 of 1996, 547 of 1990, 321 of 2001, 601 of 1995, 79 of 1996, 260 of 1996 and 548 of 1990 respectively of which T.A. No. 321 of 2001 which is the subject -matter of T.R.C. No. 292 of 2002 was disposed of by a separate order dated September 13, 2001 following the common order of the Tribunal in the other cases.
(2.) The question that arises for consideration in all these cases is as to whether the petitioner is liable to pay purchase tax under Sec. 5A of the Act on the purchase turnover of catties, sheep and pigs.
(3.) The petitioner is a State Government undertaking carrying on the business in the sales of livestock and meat and is an assessee on the files of the Assistant Commissioner, Special Circle III, Ernakulam. In the assessment for the years under consideration the petitioner in its returns, Inter alia, claimed non -liability to tax under Sec. 5A of the Act in respect of the purchase turnover of goat, sheep, pig, etc. This claim was made on the basis that the conversion of animals into meat by slaughtering does not involve any manufacturing process attracting the provisions of Sec. 5A(1)(a) of the Act. The assessing authority had rejected the said contention based on the decision of the Supreme Court in Deputy Commissioner of Sales Tax v/s. AM. Ismail . In the appeals filed by the petitioner before the Deputy Commissioner (Appeals), AIT and ST, Ernakulam, the petitioner contended that the live goat, sheep, pig and its meat are one and the same commodity and since meat is exempted from payment of tax under the Notification S.R.O. No. 342 of 1963, the petitioner is not liable to pay tax under Sec. 5A of the Act. The petitioner also relied on the decisions of the Supreme Court in Sterling Foods v/s. State of Karnataka and Deputy Commissioner of Sales Tax (Law) v/s. Mohammad Ali . The first appellate authority had granted relief in respect of the purchase turnover of chicken relying on the decision in Sterling Foods' case . However, the first appellate authority agreed with the assessing authority in respect of the other items. In the appeals filed before the Tribunal the assessee contended that the conversion of animals into meat by slaughtering does not involve any manufacturing process and therefore Sec. 5A is not attracted. The Tribunal observed that this question is no more res integra in view of the decision of the Supreme Court in A.B. Ismail's case . The Tribunal also distinguished the decision of the Supreme Court in Sterling Foods' case by taking the view that the Supreme Court in the said case was concerned with the question whether shrimps, prawns and lobsters subjected to processing like cutting of heads and tails, peelings, cleaning and freezing cease to be the same commodity and become a different commercial commodity for the purpose of exemption under Sec. 5(3) of the Central Sales Tax Act, 1956. The Tribunal also noted that the Supreme Court in the above decision had quoted with approval the observations of the American Supreme Court that dressed and frozen chicken is not a commercially distinct article from original chicken and by drawing this analogy the Supreme Court held that frozen shrimps, prawns and lobsters cannot be regarded as commercially different commodity from raw shrimps, prawns and lobsters. The Tribunal however noted that slaughtering of animals and conversion of it into meat is different from processing of raw shrimps and prawns. The Tribunal ultimately held that the authorities below were justified in levying tax under Sec. 5A of the Act in the instant case.;
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