J.Gupta, Judicial Member - (1.) THE issue calling for decision here is whether cashewnut seed is tax -free goods under the West Bengal Sales Tax Act, 1994. The applicant, as the proprietor of Joy Guru Cashew Processing, carries on business of processing of raw cashewnut seeds into cashewnuts. A dispute arose in connection with seizure of two truck -loads of such seeds. Two consignments of 117 and 118 bags of cashewnut seeds (hereinafter referred to as "the CN seeds") were being imported into West Bengal by two trucks. The check -post authorities at Baxirhat seized on September 4, 1999 the goods on the ground of importation of the same without way bill in contravention of provisions of Section 68 of the West Bengal Sales Tax Act, 1994 (in short, "the 1994 Act"). Subsequently, in a penalty proceeding under Section 71 of the Act a penalty of Rs. 1 lakh for each consignment was imposed. The goods being of perishable nature, the applicant had to pay the penalty to get release of the goods. The applicant challenges the seizure and the order imposing penalty.
(2.) ACCORDING to the applicant, the CN seed not being dry or preserved fruit within the meaning of entry 26 of Schedule IV of 1994 Act, is not taxable under the Act. His contention is that CN seed is "fresh fruit" coming under entry 39 of Schedule I and hence is a tax -free item and accordingly there is no question of procuring any way bill for importation of the same into West Bengal. The applicant prays for a declaration that CN seeds are not dry/preserved fruits but tax -free "fresh fruits". The applicant claims that in view of that position he is not under any obligation to procure any way bill for importing the seeds. According to the respondents, the CN seed is not "fresh fruit" but a goods of general category and is liable to be taxed accordingly.
(3.) MR . S. Bose, learned Senior Counsel for the applicant, firstly contends that CN seeds are not dry fruits within the meaning of entry 26 of Schedule IV. He points out that though "cashewnut" is included in the entry, the raw cashewnut seeds, as such, is not cashewnut, because CN seeds have to be subjected to various processes to take the edible cashewnut out of it. It is not in dispute that edible nut of cashew remains within the hard shell of the seed. This hard shell contains corrosive chemical which is eliminated by roasting the seed and only thereafter by cracking the shell the edible nut is taken out. Mr. Bose relies on the decision of this Tribunal in the case of SK. Mekail v. State of West Bengal reported in [1993] 90 STC 472. In that case the issue was whether cashewnut seed was "dry and preserved food" within the meaning of Notification No. 2252 -F.T. dated June 9, 1969. Though "cashewnut" finds specific mention in the notification, this Tribunal, after considering the real nature of cashewnut seeds, held that such seed is not covered by this notification. The text of this notification is almost identical to entry No. 26 of Schedule IV. Even Mr. J.K. Goswami, learned State Representative, does not dispute this. Thus the seed which the applicant imports into West Bengal is not cashewnut and is not covered by entry 26 of Schedule IV and is accordingly not taxable under Section 18 of 1994 Act.;