Dipak Chakraborti, Member (T) - (1.) IN this petition filed under Section 8 of the West Bengal Taxation Tribunal Act, 1987, the petitioner, Narendra Kumar Agarwal, carrying on a proprietary business under the name and style of M/s. Biharilal Omprakash, 149, Cotton Street, Kolkata 700 007, has raised a question as to whether de -husked water -melon seed, which is mainly used for preparation of vegetable curry and in sweet meats to add taste, should fall within the entry 35B of Schedule A to the West Bengal Value Added Tax Act, 2003 (in short, "the VAT Act"). In terms of the said entry, no tax is leviable on sale of seeds of all varieties other than those specified elsewhere in Schedule A to the VAT Act or alternatively whether it will be treated as an item falling under Schedule CA to the VAT Act as residual entry on which tax would be leviable at 12.5 per cent.
(2.) SRI S.K. Chakrabarty, learned Senior Advocate, appearing along with Sri D.B. Thakur, Advocate, and Sri P. Gupta, Advocate, on behalf of the petitioner, submitted that the item in question is covered by entry 35B of Schedule A to the Act. In the said entry, barring seeds specified elsewhere in any Schedule under the VAT Act, sales of seeds of all varieties have been exempted from levy of tax. It was argued that the word "seed" has not been defined anywhere in the Act and in such circumstances, the item should mean as it is commonly understood by the people dealing with such item. The expression "varieties" encompasses within its fold husked as well as de -husked seeds. Therefore, there is no reason to treat de -husked water -melon seed as falling under Schedule CA to the Act. In support of his submission, learned Advocate relied on a decision of the honourable Supreme Court of India in the case Avadh Sugar Mills Ltd. v. Sales Tax Officer, Sitapur [1973] 31 STC 469. In that case, the honourable apex court was asked to decide whether groundnuts are seeds and whether they are oil seeds. In coming to the decision, the honourable apex court observed "there can hardly be any doubt that in commercial circles groundnut is dealt with as an oil -seed." It was, therefore, stressed by the learned Senior Advocate that since de -husked water -melon seeds are treated as seeds in the commercial circles, it should fall within the ambit of entry against serial No. 35B of Schedule A to the VAT Act. Sri B. Majumder, learned State Representative appearing on behalf of the respondent -authorities, contested this petition and submitted that de -husked water -melon seeds do not fall within the meaning of "seeds" as in entry 35B, as aforesaid. It was argued that the seeds having germination capacity would only qualify for being treated as seeds as per entry against item No. 35B of Schedule A to the VAT Act. After de -husking, seeds lose their germination capacity. It was also submitted by him that de -husked water -melon seeds are not put to use for agricultural or horticultural purposes. Such seeds are used for enriching the taste and flavour of cooked items. In the circumstances, it should be treated as an item falling under Schedule CA to the VAT Act.
(3.) WE have heard both the sides. The learned Senior Advocate contended that water -melon seeds whether husked or de -husked should be treated as seeds for the purpose of treating as an item coming within the purview of entry made against serial No. 35B of Schedule A to the VAT Act. His argument was that de -husked water -melon seed should be treated as covered by the expression "of all varieties". To be very precise, learned Senior Advocate wanted to establish that it is one variety of seeds. We are, however, not in agreement with the submission made by the learned Senior Advocate. The said entry, as it appears to us, is in relation to different kinds of seeds used for agricultural and horticultural activities. In our view, "variety" means a sub -division of a kind identifiable by growth, yield, plant, fruit, etc. Seeds are sown into the earth for the purpose of agricultural or horticultural crops. When a variety of seed is sold, both the seller and purchaser accept it as seed keeping in mind the ultimate use of this item. But in this case, the seed which the petitioner is selling is not seed simpliciter. It passes through a process to make it usable mainly for cooking purposes and during such process, it loses its germination capacity. What the petitioner is selling is a distinct commercial commodity having a distinct use. If we have understood the intention of the Legislature correctly, then it appears to us that such exemption has been allowed in respect of sales of seeds having agricultural or horticultural use, though some types of seeds have been kept outside the purview of the entry in question because of specific entries in respect of those left -out seeds in other Schedules. There may be cases where the seeds lose their germination capacity because of natural decay but even in these cases, the item may be sold as seed and may be accepted as seed without knowing that those had lost germinating capacity. It would be worthwhile to mention here that such decay is not due to passing these seeds through a conscious process for making them usable for a distinct purpose other than germinating for agricultural or horticultural purposes.;