STATE OF TAMIL NADU Vs. K V PERUMAL CHETTIAR

JUDGEMENT

(1.) THE department is the petitioner. Purchase tax under section 7-A of the Tamil Nadu General Sales Tax Act, 1959, was imposed on the assessee on the purchase turnover of Rs. 26, 933 relating to the purchase of art silk yarn. According to the department, the assessee purchased art silk yarn and consumed the same for weaving cloth. According to assessee, section 7-A of the Act is not attracted because the art silk yarn purchased by the assessee was not consumed in the manufacture of silk cloth. THE assessment year involved in this case is 1976-77. During the relevant assessment year, the crucial word used in section 7-A is that the raw materials purchased should be "consumed" in manufacturing the end-product. Though it was by later amendment the word used was introduced, but during the relevant assessment year the crucial word in section 7-A is "consumed". Hence the point for consideration is whether the assessee has consumed the raw materials purchased, viz. , the art silk yarn in the manufacture of art silk cloth. THE Kerala High court in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes) v. Pio Food Packers had an occasion to consider this aspect. According to the fact arising in the above cited case, the assessee purchased pineapple and prepared pineapple slices by a process, which included packing in tin containers for being made available in the market. THE assessee purchased pineapple, washed it, removed the inedible portions, namely, the end, the crown, the skin and the core, sliced it, filled the slices in cans with some sugar added as preservative, sealed under temperature and put into boiling water for sterilisation and thus prepared pineapple slices. It prepared pineapple juice by crushing the pineapple and pressing it after removing the inedible portions. THE juice thus obtained was sweetened, filled in cans, sealed under temperature and put in boiling water for sterilisation. It prepared jam and squash with pineapple by well-known processes. THE question that arose for consideration was whether the pineapple slices fell within the ambit of section 5a of the kerala General Sales Tax Act, 1961, in particular section 5a (1) (a)corresponding to section 7-A (1) (a) of the Tamil Nadu General Sales Tax Act, 1959. On these facts the Kerala High Court held as under :

(2.) "inasmuch as the goods purchased are not consumed in the process of manufacture of some other goods, section 5a (1) (a) will not be attracted. The very use of the word'consume'contemplates that the goods purchased should have been devoured or exhausted in the process of manufacture with the result, its identity must have been completely lost. So long as its identity remained, the goods purchased and used in the manufacture of some other goods cannot be said to have been consumed in the process of manufacture of other goods. " *

(3.) IN the result, this tax case (revision) filed by the department is dismissed. No cost. .