- (1.) M. C. AGARWAL, J. By this revision petition under section 11 of the U. P. Sales Tax Act, 1948 (hereinafter referred to as "the Act"), the Commissioner of Sales Tax challenges an order dated 9th May, 1988 passed by the Sales Tax Tribunal, Aligarh, whereby it allowed the dealer's Second Appeal No. 687 of 1984 for the assessment year 1979-80 and dismissed the Commissioner's second appeal Nos. 82 and 83 of 1985.
(2.) I have heard Sri K. M. Sahai, learned Standing Counsel for the Commissioner, revisionist and Sri Prakash Krishna, learned counsel for the dealer-respondent. The first point raised in this revision petition is about the turnover amounting to Rs. 32,52,723. 91 which the assessing officer treated as inter-State sales. These sales were of matter dal and were claimed to be exempt by virtue of Notification No. ST-II/1773/x - 6 (19)-78-Act 74 - 56 - Order-79, dated 28th February, 1979 which provided as under : " Whereas, the State Government is satisfied that it is necessary so to do in the public interest; Now, therefore, in exercise of the powers under sub-section (5) of section 8 of the Central Sales Tax Act, 1956 (Act No. 74 of 1956), the Governor is pleased to direct that, with effect from March 1, 1979, no tax under the said Act shall be payable by any dealer, registered under section 7 thereof and having his place of business in Uttar Pradesh, in respect of the sale by him in the course of inter-State trade or commerce from such place of business of peas, provided that such peas are purchased from a registered dealer within Uttar Pradesh and the tax payable thereon under the U. P. Sales Tax Act, 1948 (U. P. Act No. XV of 1948), has been paid and the selling dealer of Uttar Pradesh furnishes to the assessing authority, in the prescribed manner and within the prescribed period, the declaration or certificate referred to in sub-section (4) of section 8 of the said Act of 1956. " The assessing officer negatived the said contention on the ground that what was sold was not peas but peas dal which was a different Commodity. The dealer's contention was that matter (peas), out of which dal in question was manufactured by it, already suffered tax in the hands of the registered dealer from whom the dealer had purchased the matter (peas) and, therefore, it was entitled to exemption on the inter-State sale of dal by virtue of the aforesaid notification. The Deputy Commissioner (Appeals) had accepted this contention and the same has been upheld by the Tribunal.
(3.) IN Tilok Chand Prasan Kumar v. Sales Tax Officer [1970] 25 STC 118, a Division Bench of this Court had held that arhar dal whole and broken down dal were essentially the same commodity and, therefore, the broken dal that was purchased by the dealer from the manufacturer cannot be said to be a commodity essentially different from the arhar dal purchased by the dal mills and accordingly the purchase effected by the dealer cannot be regarded as the first purchase. Relying upon this view the Deputy Commissioner (Appeals) as well as the Tribunal held that the conversion of whole peas into "dal" (split peas) did not change the nature of the goods and, therefore, the peas dal sold by the dealer was covered by the aforesaid notification. Learned counsel for the respondent placed reliance on Explanation 11 to section 3-D of the U. P. Sales Tax Act which reads as under and was inserted by U. P. Act No. 2 of 1980 with effect from 4th December, 1979. " Explanation II.- For the purposes of assessment relating to any period commencing on October 1, 1964, and ending with November 14, 1971, split or processed foodgrains, cereals or pulses shall be deemed to he different from unsplit or unprocessed foodgrains, cereals or pulses and, accordingly, nothing in this section shall be construed to prevent imposition, levy or collection of tax in respect of the first purchase relating to such period, of split or processed foodgrains, cereals or pulses merely because tax has been imposed, levied or collected earlier in respect of such foodgrains, cereals or pulses in their unsplit or unprocessed form. " Earlier a different explanation was added by U. P. Act No. 2 of 1970 as under : " Explanation II.- For the purposes of this sub-section, split or processed foodgrains, such as in the form of dal, shall be deemed to be different from unsplit or unprocessed foodgrains, and accordingly, nothing in this sub-section shall be construed to prevent the imposition, levy or collection of the tax in respect of the first purchases of split or processed foodgrains merely because tax had been imposed, levied or collected earlier in respect of the first purchases of those foodgrains in their unsplit or unprocessed form. " It was contended that the explanation as substituted by U. P. Act No. 2 of 1980 is restricted in its application to the period October 1, 1964 to November 14, 1971 and, therefore, for the year under consideration the view taken by this Court in [1970] 25 STC 118 (Tilok Chand Prasan Kumar v. Sales Tax Officer) prevails. This contention in my view is not correct. Section 2 (e-1) as inserted by U. P. Act No. 12 of 1979 with effect from November 1, 1978 (sic) in the U. P. Sales Tax Act, 1948, defined manufacture as under : " (e-1) 'manufacture' means producing, making, mining, collecting, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods; but does not include such manufactures or manufacturing processes as may be prescribed. ";