MOTILAL HARIPRASAD AND BROTHERS Vs. STATE OF ANDHRA
HIGH COURT OF ANDHRA PRADESH
MOTILAL HARIPRASAD AND BROTHERS
STATE OF ANDHRA PRADESH
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SUBBA RAO, C.J. -
(1.)THE assessees are dealers in ground-nut oil and cake. They purchase ground-nut and ground-nut kernel, and, after converting them into oil, sell it. During the year 1951-52, they purchased Rs. 16,41,542-1-9 worth of ground-nut and Rs. 5,87,049-7-9 worth of ground-nut kernel. The said turnover was assessed at the purchase point. The said assessment was confirmed by the Tribunal. The assessees question the validity of assessment of that part of the turnover which represents the purchase price of ground-nut kernel.
(2.)THE relevant rules of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, read as follows :-
"Rule 4(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. (a) ground-nut, (b) cashew, cotton (including kapas) brought by spinning mill or by dealer who exports outside the State."
"Rule 18(1) : Any dealer who manufactures ground-nut oil and cake from ground-nut and/or kernel purchased by him may, on application to the assessing authority having jurisdiction over the area in which he carries on his business, be registered as a manufacturer of ground-nut oil and cake. "Rule 18(2) : Every such manufacturer shall be entitled to a deduction under clause (k) of sub-rule (1) of rule 5 equal to the value of the ground-nut and/or kernel purchased and converted by him into oil and cake provided that the amount for which the oil is sold is included in his turnover. Explanation : For the purpose of this sub-rule - (a) 143 lbs. of ground-nut shall be taken to be equivalent to 100 lbs. of kernel; (b) 143 lbs. of ground-nut of 100 lbs. kernel shall, when converted into oil, be taken to yield 40 lbs. of oil."
Under the aforesaid provisions, ground-nut is liable to be taxed at the purchase point. But rebate is given if the oil is manufactured from ground-nut and the sale thereof is included in the turnover. But it is contended that rule 4(2) applies only to ground-nut but not to ground-nut kernel and support is sought to be derived for this contention from the omission of the word "kernel" in rule 4(2)(a) and the specific inclusion of it in rule 18(2). It is also said that whenever kernel is intended to be included, the rulers expressly provide for it as in the case of cotton.
(3.)WE cannot accept the argument. Ground-nut is a more comprehensive term, which obviously takes in kernel. The word ground-nut is used to connote both the shell and the kernel within it. We cannot discover any reason nor is any suggested to us, why the rule should make a distinction between ground-nut and ground-nut kernel and why ground-nut should be taxed at the purchase point and ground-nut kernel at the sale point. So, too, the ground on which rebate is given on sale of oil manufactured from ground-nut applies equally to ground-nut and ground-nut kernel. The fact that kernel is separately mentioned in rule 18(2) is not a pointer in support of the assessee' contention. It is necessary to mention "kernel" separately in that rule as the quantity of oil deemed to be manufactured from a particular quantity of ground-nut or ground-nut kernel varies. Nor is the mention of kapas in rules 4(2)(b) of any relevance. That rule, as it originally stood, made cotton alone taxable at the purchase point. Cotton is the soft substance of the kapas after the seeds are removed. Though kapas may take in cotton, cotton cannot include kapas. Presumably finding this difficulty, the rule was amended on 13th July, 1949, by adding the words "(including kapas)" after the words "cotton". This fact cannot, therefore, throw any light on the construction of rule 4(2)(a), for, as we have already stated, ground-nut takes in kernel also.
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