COMMISSIONER OF SALES TAX (LAW) V • N. KANNAN NAIR APRIL 8 & Ors. v. Pio Food Packers & Ors.

DY. COMMR. SALES TAX v. N.K. NAIR [MUKHARJI, J.] 491 (a) consumes such goods in the manufacture of other foods A for sale or otherwise; or {b) disposes of such goods in any manner other than by way of sale in the State; or (c) despatches them to any place outside the State except B as a direct result of sale or purchase in the course of inter state trade or commerce, shall, whatever be the quantum of the turnover relating to such purchase for a year, pay tax on the taxable turnover. relating to such purchase for that year at the rates mentioned in section 5. {2) Notwithstanding anything contained in sub- section (1), a dealer (other than a casual trader or agent of a non-resident dealer) purchasing goods, the sale of which is liable to tax under section. 5, shall not be liable to pay tax under section (1) if his total turnover for a year is less than (twenty thousand rupees); Provided that where the total turnover of such dealer for the year in respect of the goods mentioned in clause (i) of sub-section (I) of section 5 is not less than two thousand five hundred rupees, he shall be liable to pay tax on the taxable turnover in respect of these goods. c D E {3) Notwithstanding anything contained in the fore going provisions of this section, a dealer referred to in sub section {I), who purchases goods, the sale of which is liable to tax under clause (ii) of sub-section (I) of Section 5, and whose total turnover for a year is not less than (twenty F thousand rupees) but not more than twenty-five thousand rupees may, at his option instead of paying the tax in accordance with the provisions of sub-section (I), pay tax (at the rate) mentioned in clause (i) of sub-section (I) of section 7 in accordance · with the provisions of that section." G The assessee was assessed on the purchase turnover of sand, bricks, etc. which were used for the execution of liis work. The assess ment was upheld by the Appellate Assistant Commissioner. In the second appeal preferred by the assessee, the Tribunal found that the assessee was a P.W.D. Contractor. He had obtained an amount of H ~ \ •I'{ 492 SUPREME COURT REPORTS [1988] 3 S.C.R. Rs.1,01,372 as per bills from the Executive Engineer (Roads and Buildings). According the assessing officer an amount of Rs.27684.13 was the purchase value of articles used by the assessee for the execution of these contracts and so the assessing officer had asses sed this turnover to tax under Section 5A of the Act. The Tribunal found that it was necessary under the said Section 5A of the Act to have consumption of the commodity in the manufacture of another com modity, the goods purchased should be consumed, the consumption should be in the process of manufacture and the result must be the manufacture of other goods. Therefore, according to the Tribunal, when a P.W.D. Contractor was using some articles for constructing a Sea Wall or repairing a public road, there was consumption of a com modity for the manufacture of another commodity. This conclusion logically follows from the observations and ratio of this Court in Deputy Commissioner, Sales Tax (Law) Board of Revenue (Taxes) Ernakulam v. Pio Food Packers, [1980] 3 S.C.R. 1271, where Pathak, J. as the learned Chief Justice then was 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 within the meaning of section 5A(l)(a) of the Kerala General Sales Tax Act, 1963. He further observed at pages 1276 and 1277 of the report as follows: -+- "Although a degree of processing is involved in preparing pineapple slices from the original fruit, the commodity con tinues to possess its original identity, notwithstanding the removal of inedible portions, the slicing and thereafter can ning it on adding sugar to preserve it. It is contended for the Revenue that pineapple slices have a higher price in the market than the original fruit and that implies that the slices constitute a different commercial commodity. The higher price, it seems to us, is occasioned only because of the labour put into making the fruit more readily consum able .and because of the can employed to contain it. It is not as if the highe~ price is claimed because it is a different commercial ccimmodity. It is said that pineapple slices appeal to a different sector of the trade and that when a customer asks for a can of pineapple slices he has in mind something very different from fresh pineapple fruit. Here again, the distinction in the mind of the consumer arises not from any difference in the essential identity of the two, but is derived from the mere form in which the fruit is desired. A B c D E F G H DY. COMMR. SALES TAX v. N.K. NAIR [MUKHARJI, J.[ 493 ·Learned counsel for the Revenue contends that even .if no manufacturing process is involved, the case still falls within section 5A(l)(a) of the Kerala General Sales Tax Act, because the statutory provision speaks not only of goods consumed in the manufacture of other goodsJor sale but also goods consumed otherwise. There is a fallacy in the submission. The clause, truly read, speaks of goods consumed in the manufacture of other goods for sale or goods consumed in the manufacture of other goods for purposes other than sale." The Tribunal accepted the assessee's contentions and allowed the appeal. The High Court upheld the decision of the Tribunal and rejected the revision. Hence this petition for leave to appeal. We are unable to see any ground for interference. The position is clear from the decision of this Court in Pio Food Packers (supra). It was con tended before us that if no manufacturing pro~ess was involved, the case would fall within the scope of Section 5-A(l)(a) of the Act be cause the statutory provisions spoke not only of goods consumed in the manufacture of other goods for sale but also goods 'consumed other wise'. Reliance for that was placed on the decision of this Court in Ganesh Prasad Dixit v. Commissioner of Sales Tax, Madhya Pradesh, (1969] 3 S.C.R. 490. It 1is, however, not possible to accept this contention . ' I ~- .. 1n the decision of Pio Food Packers (supra), it was observed that the clause, truly read, spoke of goods consumed in the manufacture of other goods for purposes other than sale. In the instant case, the user must be iri the other commodity and the expression "consumed otherwise'' must be so construed. This contention·was specifically con sidered by this Court in S.L.P. (Civil) Nos. 8747-49 of 1987-Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam, judgment delivered on 14th March, 1988c A B c D· E F In the aforesaid view of ·the matter, there is no ground to G interfere with the order of the High Court. The Special Leave Peti tions fail and are accordingly dismissed. N.V.K. Petitions dismissed.