RATLAM BONE AND FERTILIZER CO Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THIS is a petition under Article 226 of the Constitution and is directed against two orders of reassessment; one under the Madhya Pradesh General Sales Tax Act, 1959, and the other under the Central Sales Tax Act, 1956.

(2.) THE facts are that the petitioner, the Ratlam Bone and Fertilizer Company, is a partnership-firm carrying on business of grinding bones for use as fertilizer. It is registered as a dealer both under the State Act and the Central Act. The relevant period of assessment is from 1st November, 1959, to 19th October, 1960. The assessment order under the State Act was passed on 6th October, 1961. In this order the petitioner's turnover relating to sales of bone-meal, i. e. , powdered bones used as fertilizer, was assessed at Rs. 147. The assessment order under the Central Act was passed on 30th October, 1961, in which the turnover of sales of bone-meal was assessed at Rs. 1,57,356. These turnovers of sales of bone-meal, both under the State Act and the Central Act, were held to be free from liability of tax on the reasoning that bone-meal being a fertilizer was exempt from sales tax under entry No. 22 of Schedule I read with Section 10 (1) of the State Act. Thereafter notices were issued to the petitioner for reassessment under both the Acts on the ground that the turnovers relating to sales of bone-meal had escaped assessment. The reassessment under the State Act was made on 30th September, 1966, and under the Central Act on 24th March, 1967. In these reassessment orders it was pointed out by the assessing authority that the High Court in Commissioner of Sales Tax v. Sagar Bone Mills, Sugar : No. 1 [1966] 18 S. T. C. 338 had held that bone-meal although a fertilizer was not exempt from sales tax. Following the judgment of the High Court, the assessing authority assessed the turnovers of bone-meal to tax both under the State Act and the Central Act. The petitioner thereafter filed the present writ petition challenging the aforesaid reassessment orders. When the petition came up for hearing before a Division Bench, the view taken by the High Court in Commissioner of Sales Tax v. Sugar Bone Mills, Sugar : No. 1 [1966] 18 S. T. C. 338 was questioned and, therefore, the petition was referred to a Full Bench and this is how the matter comes up before us.

(3.) BEFORE we advert to the contentions raised by the learned counsel for the petitioner it is necessary to refer to the relevant statutory provisions of the State Act as they were in force during the period of assessment. Section 2 (t) of the Act defines "turnover" in relation to any period as meaning: the aggregate of the amount of sale prices received and receivable by a dealer in respect of any sale or supply or distribution of goods made during that period, whether or not the whole or any portion of such turnover is liable to tax but after deducting the amount, if any, refunded by the dealer to a purchaser, in respect of any goods purchased and returned by the purchaser within the prescribed period. The expression "taxable turnover", in relation to any period, is denned by Section 2 (r) which, in so far as it is relevant, reads :