- (1.) CHANDURKAR, C.J.A common question of law which arises in all these writ petitions is, whether the cashewnut and cashew Kernels are the same goods for purposes of section 5(3) of the Central Sales Tax Act, 1956. These petitions can, therefore, be conveniently disposed of by a common judgment.
(2.) ADMITTEDLY, the petitioners in the several petitions export cashew Kernel after they process raw cashewnut purchased by them. We may take an illustrative case of the assessment of petitioners in W.P. No. 3968 of 1982. They were assessed to sales tax under the provisions of the Tamil Nadu General Sales Tax Act, 1959. We may briefly refer to the facts in that petition. For the assessment year 1976-77 the petitioners were assessed on taxable turnover of Rs. 37, 93, 816.11. At the time of assessment, the purchase of cashewnut and sales turnover of cashewnut shell was found to be as follows : Rs. Ps. 1st purchase of cashewnuts .... 28, 54, 925.24 Inter-State purchase of cashewnut .... 5, 19, 687.00 2nd purchase of cashewnut .... 4, 00, 785.25 Sales turnover of cashew shell .... 18, 418.62 37, 93, 816.11 Before the Assessing Officer, namely, the Deputy Commercial Tax Officer, exemption was claimed by the assessee in respect of the entire cashewnut purchase turnover on the ground that the purchases were made to do export to foreign countries in accordance with the Central Sales Tax Act, hereinafter referred to as the Central Act. The assessing Officer found that the conditions of section 5(3) of the Central Act which was introduced with effect from 1st April, 1976 were satisfied and they were eligible for exemption claimed by them for the sale to foreign countries effected during the assessment year 1976-77. The taxable turnover under the said Sales Tax Act was computed only at Rs. 18, 416 and this turnover was held taxable at the rate of 4 per cent under section 3(1) of the Act. The sales tax was computed at Rs. 737. This assessment order was made on 15th May, 1979.
(3.) ON 26th February, 1982, a notice was sent to the assessee that the assessing officer proposed to revise the assessment for the assessment year 1976-77, as the cashew kernel which had been exported was of a different commodity than the cashewnut which was purchased by the assessee. According to the assessing officer, therefore, the condition required for invoking the benefit of section 5(3) of the Central Act was not satisfied. The notice specified that the total taxable turnover was provisionally determined as Rs. 28, 73, 343.86 and that the assessee was entitled to raise objections if any to the proposal for revising the assessment. The assessing officer then passed an order on 15th April, 1982 taking the view that petitioners had purchased raw cashewnuts (with shell) subjected them to a manufacturing process, extracted oil, and after sorting them into different grades, exported them. Therefore, the cashewnut with shell and kernel were two different and distinct commodities, which cannot be equated as "identical goods" as claimed by the assessee. Thus taking the view that what has been exported was different from what was purchased and that cashew kernel was commercially different, the authority found there was change in the identity of the goods. Consequently, the taxable turnover was determined at Rs. 28, 73, 344. This included cashew husk of the value of Rs. 8, 499, the cashewnut turnover being taxable at 5 per cent and the cashew husk turnover being taxable at 4 per cent. A demand for Rs. 20, 113 was made by the Deputy Commercial Tax Officer. A separate notice of demand under rule 18(a) of the Tamil Nadu General Sales Tax Rules, 1959, was also sent to the assessee on the same day. W.P. No. 3968 of 1982 is filed challenging the validity of this assessment.;