B. R. ARORA, J. - (1.) THESE three sales tax revision petitions are directed against the judgment dated 29th September, 1987, passed by the Rajasthan Sales Tax Tribunal, Ajmer (hereinafter to be referred to as "the Tribunal") by which the learned Member of the Tribunal decided the three appeals filed by the three petitioners as well as the cross-objections filed by them. As the point involved in all these three revision petitions is the same, I, therefore, propose to decide these petitions by a common order.
(2.) BRIEF facts of the case are that the assessee-petitioners are carrying on the business of manufacture of "goat hair patties" at Jasol, District Barmer. The petitioners purchase "goat hair" and "goat hair strings" (also known in the trade as "jat" and "jat cheen dhaga") from unregistered dealers as well as from registered dealers and pay sales tax at full rate of taxes as applicable. After purchasing this "goat hair" and "goat hair strings", the petitioners convert the "goat hair strings" and "goat hair" into "goat hair patties", by process of sorting of raw goat hair and then by knitting them. The petitioners, thereafter, export the "goat hair patties". According to the petitioners, this is wholly an export item. The petitioners sold the "goat hair patties" through the agency of M/s. Abdulla Bhai Abdul Kadar of Bombay, who are the shipping agents. The assessing authority while assessing the petitioners on these "goat hair patties" held that the assessee is liable to pay purchase tax under section 5a of the Rajasthan Sales Tax Act, 1954, on the purchase of "goat hair" and "goat hair strings", etc. Aggrieved with the order passed by the assessing authority, the assessee-petitioners preferred the appeals before the Deputy Commissioner (Appeals) and the Deputy Commissioner (Appeals) allowed the appeals filed by the petitioners in part. The Deputy Commissioner (Appeals) upheld the levy of tax at the rate of 2 per cent instead of 4 per cent and 8 per cent imposed by the assessing authority. Aggrieved with the order passed by the Deputy Commissioner (Appeals) levying the tax at the rate of 2 per cent, the department preferred the appeals in cases of all these assessees before the Rajasthan Sales Tax Tribunal, Ajmer. The assessee-petitioners also filed cross-objections against the imposition of tax at the rate of 2 per cent. The Tribunal, vide its order dated 29th September, 1987, dismissed the appeals filed by the department, but however, the Tribunal allowed the cross-objections filed by the present petitioners in part and held that the tax for the period 25th September, 1980 to 2nd March, 1982, will be charged at the rate of 1 per cent whereas after this period, i. e. , from 3rd March, 1982 onwards, the purchase tax will be charged at the rate of 2 per cent. Against this order of the Tribunal dated 29th September, 1987, the petitioners have preferred these three sales tax revision petitions. No revision petitions have been filed by the department. I have heard Mr. Kothari appearing for the petitioners and Mr. Bhansali for the respondent. It was argued by Mr. Kothari, learned counsel appearing for the petitioner that since the Tribunal has found that sales effected by the assessee are in the course of export and as these findings have not been challenged by the department and, therefore, no tax is chargeable as the tax liability of the petitioner is nil. He has further submitted that the nature of goods purchased by the petitioner and the goods exported by him is the same and there was no change in the identity and character of the goods, and, therefore, no tax be charged. In support of his contention, learned counsel for the petitioner has placed reliance on Deputy Commissioner of Sales Tax v. Pio Food Packers [1980] 46 STC 63 (SC), Sterling Foods v. State of Karnataka [1986] 63 STC 239 (SC); (1986) 18 STL 80 (SC) and Commercial Taxes Officer v. Sakariya Textiles [1986] 61 STC 247 (Raj); (1986) 19 STL 110 (Raj ). The learned counsel for the petitioner has also submitted that the learned Member of the Tribunal held that the "goat hair" and "goat hair strings" are raw materials used for the manufacture of the "goat hair patties" and thus committed a mistake in levying the purchase tax under section 5c. Actually, the identity of the article never changed. The "goat hair" remained "goat hair". Learned counsel for the department Mr. Bhansali on the other hand has submitted that "goat hair" or "goat hair strings" are different commodities from that of "goat hair patties". It was also contended that this argument that both the goods are the same, was never raised before the Tribunal and he has further submitted that the findings arrived at by the Tribunal in para 2 of the judgment have not been challenged. The counsel for the department further submitted that the case of the petitioner is covered by section 5c of the Rajasthan Sales Tax Act, 1954 (for short "the Act" hereinafter) and not by section 5 (1) of the Act. The last contention of the counsel for the respondent is that the order in question does not suffer from any infirmity and no question of law involves in the case and as such all these revision petitions under section 15 of the Act are not maintainable. I have gone through the rival submissions made by the learned counsel for the petitioners, Mr. Kothari, as well as by Mr. Bhansali, counsel for the respondent. Since the findings of the Tribunal that the sales effected by the assessees are in the course of export have not been challenged and, therefore, the short point which is to be decided in the present case is whether "goat hair patties" and "goat hair" or "goat hair strings" are two distinct commodities in common parlance or are they one and the same. If "goat hair patties" is a different commodity from that of "goat hair" or "goat hair strings" then the purchase tax at the concessional price is leviable under section 5c of the Act and if both items are one and the same thing then section 5 of the Act would be applicable and in view of section 5 of the Act read with section 5 (3) of the Central Sales Tax Act, 1956 (for short "the Central Act" hereinafter), the goods in question are exempt as they were for the purpose of export sale. Now I take up the cases cited by the counsel for the petitioners. The Deputy Commissioner of Sales Tax v. Pio Food Packers [1980] 46 STC 63, is a case where the honourable Supreme Court has held that when pineapple fruit is processed into pineapple slices for the purpose of being sold in sealed cans, there is no consumption of the original pineapple fruit for the purpose of manufacture and the case does not fall within section 5a (1) (a) of the Kerala General Sales Tax Act, 1963. Although a degree of processing is involved in preparing pineapple slices from the original fruit, the commodity continues to possess its original identity, notwithstanding the removal of inedible portions, the slicing and thereafter canning it on adding sugar to preserve it. In Sterling Foods v. State of Karnataka [1986] 63 STC 239; (1986) 18 STL 80, honourable Supreme Court, while considering the case of shrimps, prawns and lobsters after applying this principle observed as under : " It is clear on an application of this test that processed or frozen shrimps, prawns and lobsters are commercially regarded the same commodity as raw shrimps, prawns and lobsters. When raw shrimps, prawns and lobsters are subjected to the process of cutting of heads and tails, peeling, deveining, cleaning and freezing, they do not cease to be shrimps, prawns and lobsters and become another distinct commodity. They are in common parlance known as shrimps, prawns and lobsters. There is no essential difference between raw shrimps, prawns and lobsters and processed or frozen shrimps, prawns and lobsters. The dealer and the consumer regard both as shrimps, prawns and lobsters. The only difference is that processed shrimps, prawns and lobsters are ready for the table while raw shrimps, prawns and lobsters are not, but still both are, in commercial parlance, shrimps, prawns and lobsters. It is undoubtedly true that processed shrimps, prawns and lobsters are the result of subjecting raw shrimps, prawns and lobsters to a certain degree of processing but even so they continue to possess their original character and identity as shrimps, prawns and lobsters, notwithstanding the removal of heads and tails, peeling, deveining and cleaning which are necessary for making them fit for the table. Equally it makes no difference in character or identity when shrimps, prawns and lobsters are frozen for the purpose of preservation and transfer to other places including far off countries in the world. "
(3.) IN the case of Commercial Taxes Officer v. Sakariya Textiles [1986] 61 STC 247; (1986) 19 STL 110, the Division Bench of Rajasthan High Court, while considering the case of pachrangi dori, came to the following conclusion : " The pachrangi dori in question is a very thin - even thinner than a thin string. It is a bunch of some cotton threads of five colours which are inter-twined and twisted. The mere act of twisting, braiding, colouring, dyeing, or bunching of cotton yarn into a single cord does not bring into existence a new commercial product. The process of twisting, etc. , is, no doubt, there, but the cord still remains a yarn and cannot be treated as an unspecified, distinct and separate product falling under the residuary item. The cotton cord is a bunch of cotton threads and comes into existence by twisting, braiding and inter-twining. IN the cord, the main identity of the goods as yarn is not lost. The cord is, thus cotton yarn for the purpose of trade and commerce. " In view of these judgments for the purpose of determining the question whether the commodities have been subjected to manufacture it has to be seen, whether the commodities after the process is over has retained its original character or identity in commercial or common parlance or not. If the article produced is regarded in the trade by those who deal in it, as distinct in identity from the commodity involved in its manufacture then it will amount to process of manufacturing but when there is a thing having the same character and identity of both the articles then both the commodities will be treated as the same. Where there is no essential difference in identity between the original commodity and the processed article then it cannot be said that one commodity has been consumed in the manufacture of the other, although it has undergone a degree of processing but it must be regarded as still retaining its original identity. Now we have to see whether in the present case any manufacturing process has been carried out or not. It is not in dispute that the assessee-petitioners purchased "goat hair" and "goat hair strings" which are also known as "jat" and "jat cheen dhaga" and after purchasing, these hairs go through the process of manufacturing by manual labour by way of sorting and cleaning the raw goat hair and after the process of sorting and cleaning is over, the "goat hair" and "goat hair strings" are knitted in different form of patties of different length and breadth. These goat hair patties thus form a new product. The raw material, i. e. , the "goat hair" and "goat hair strings" undergoes a change and forms a different item and constitute a different commodity and a different article of mercantile. By way of processing and manufacturing a different product has thus come into existence in common as well as in commercial parlance. It cannot be said that both the items, i. e. , "goat hair" or "goat hair strings" and "goat hair patties" are one and the same thing and no change has taken place. The "goat hair" and "goat hair strings" which are also known as "jat" and "jat cheen dhaga" undergoes a change and that changes their identity and, therefore, it commercially can no longer be regarded as the same goods but instead becomes a new and different kind of goods. When they are exported, the "goat hair" and "goat hair strings" lose their original character and identity and become a new commodity. It is thus not correct to say that the process of sorting, cleaning and knitting has not changed the character and identity of the product. In this view of the matter, I am of the view that "goat hair" or "goat hair strings" and "goat hair patties" are two different commodities in common as well as in commercial parlance and a process of manufacturing has taken place. Both are commercially different items and the learned Member of the Tribunal was justified in levying the tax at the rate of 1 per cent and 2 per cent under section 5c of the Act for two different periods. No illegality has thus been committed by the learned Member of the Tribunal. ;