State of Andhra Pradesh Vs. Coromandel Agro Products and Oils Limited - Court Judgment

Excerpt:
sales tax - assessment - sections 8 and 22 of andhra pradesh general sales tax act, 1957 - whether sludge oil and cotton seed oil are vegetable oil coming under entry 128 - entry 128 covers vegetable oil and some other oils - cotton seed sludge oil and cotton seed acid oil is residue after cotton seed oil is refined - mere fact that it contains some residuary additives does not restrict it to be terms as vegetable oil - held, cotton seed oil and cotton seed acid oil falls under entry 128. - maximssections 2(xv) & 3(1) & (3): [v.v.s. rao, n.v. ramana & p.s. narayana, jj] ghee as a live stock product held, [per v.v.s. rao & n.v. ramana, jj - majority] since ages, milk is preserved by souring with aid of lactic cultures. the first of such resultant products developed is curd or yogurt (dahi) obtained by fermenting milk. dahi when subjected to churning yields butter (makkhan) and buttermilk as by product. the shelf life of dahi is two days whereas that of butter is a week. by simmering unsalted butter in a pot until all water is boiled, ghee is obtained which has shelf life of more than a year in controlled conditions. ghee at least as of now is most synthesized, ghee is a natural product derived ultimately from milk. so to say, milk is converted to dahi, then butter. scientifically or common sense point of view, even though ghee is not directly obtained from milk (which is certainly a product of cow/buffalo), it is certainly a product of a product of livestock i.e., cow or buffalo. it would be rather illogical or irrational to say that ghee is not a milk/dairy product or to say that it is not a product of livestock. section 2(x) and 2(iv) of the act used the plural products of livestock. the legislative intention is very clear that not only a product of livestock like milk (when notified by government), butter etc., are products of livestock but even derivative items (derived from a product of livestock) are intended to be product of livestock for the purpose of the act. thus the term ghee is to be interpreted on the basis of expression products of livestock as defined in section 2(xv) of the act. whatever products are declared as such by the government by notification, they become products of livestock for purpose of the act. consequently it was held that ghee is the product of livestock and by reason of power conferred under section 3(1) read with section 3(3) of the act on them it is competent for the government to declare ghee as product of livestock for the purpose of regulating its purchase and sale, in any notified market area. [per p.s. narayana, j,(dissenting)]if livestock or agricultural produce and the categories thereof had been specified in the statute itself by appending in the schedule or otherwise, that would stand on a different footing from the present provisions of the act which contemplate the issuance of notifications in accordance with the procedure ordained by the provisions specified supra. in view of the clear definition of the livestock and products of livestock, the ghee being derivative of butter or cream, if the language employed in definition to be taken as they stand, the only conclusion would be is that the ghee would not fall within ambit of the definitions aforesaid. sections 4 & 3: [v.v.s. rao, n.v. ramana & p.s. narayana, jj] declaration of notified area held, it is only under section 3 that government are required to publish draft notification inviting objections and section 3(3) mandates to consider objections and suggestions before issuing declaration order. it is very conspicuous that section 4 does not contemplate any draft notification inviting objections and suggestions before either constituting market committee, establishing notified market area or declaring notified market area for the purpose of levy of market fees. thus, except ordaining government to issue preliminary/draft notification inviting objections at the time of issuing declaration order under section 3(3) of the act nowhere much less under section 4 contemplates issuing a notification inviting objections. when the legislature has chosen to exclude principles of natural justice, the court cannot introduce rule of audi alteram partem and render statutory provisions unworkable. in such a case, maxim, expressum facit cessare tacitum (when there is express mention of certain things, then anything not mentioned is excluded) would apply. section 7: [v.v.s. rao, n.v. ramana & p.s. narayana, jj] levy of market fee element of quid pro quo - held, levying fees and tax are two forms of exercise of sttaes taxing power. there is no quid pro quo between tax payer and public authority as tax is a part of common burden. it is also well settled that fee is charge for special service or a benefit given to a class of individual fee payers and fee collected need not have correlation with actual service in exactitude but if it is shown that substantial portion of the fee is expended or the purpose for which it is levied, it would be justified. expressum facit cessare tacitum sections 4 & 3: [v.v.s. rao, n.v. ramana & p.s. narayana, jj] meaning when there is express mention of certain things, then anything not mentioned is excluded. upendralal waghray, j. 1. this revision under section 22 of the andhra pradesh general sales tax act, 1957, is filed by the state, against the order of the sales tax appellate tribunal, in so far as it has decided one of the question against it. the said question was framed as question no. 1 by the tribunal, and it reads as follows : 'where or not the sludge oil and cotton seed acid oil are vegetable oils coming under entry 128 of the first schedule to the andhra pradesh general sales tax act to attract lower rate of taxation under the central sales tax act, 1956, read with section 8 of the said act ?' 2. the relevant entry which falls for consideration is entry 128 in the first schedule to the andhra pradesh general sales tax act, which reads as follows : -----------------------------------------------------------------(1) (2) (3) (4)-----------------------------------------------------------------'128. vegetable oils (other than at the point 4 paise inthose specifically mentioned of first sale the rupee.'elsewhere), including in the state.gingelly oil, safflower oil,sunflower oil, soyabean oil,mustard oil, kusuma oil,tobacco seed oil, castoroil, washed cotton seed oil,coconut oil; (1128).----------------------------------------------------------------- 3. the tribunal, following the judgment of the supreme court in tungabhadra industries ltd. v. commercial tax officer : [1961]2scr14 and the decision of the allahabad high court in commissioner of sales tax v. prag ice and oil mills [1975] 35 stc 520, has held that cotton seed sludge oil and cotton seed acid oil are 'vegetable oils' and, accordingly, liable to be taxed under entry 128. the contention of the department throughout has been that it does not fall within the said entry, but must be assessed as 'generally goods', i.e., at 4 per cent. 4. it is contended by the learned government pleader for commercial taxes that reliance by the tribunal on the aforesaid two decisions is not correct. he submitted that entry 128 contemplates a vegetable oil which is edible. this, according to him has to be inferred from the circumstance that it mentions various oils which are edible. 5. we need not go into the question of applicability of the supreme court decision or the allahabad high court decision for resolving the controversy in this case, because it can be decided on the language of the entry itself. the entry relates to 'vegetable oils' and the various oils mentioned therein are only illustrative. the entry specifically says 'vegetable oils' including those mentioned therein. in the circumstances, there is no warrant for placing the construction that the said entry relates only to those vegetable oils which are edible. it appears from the facts of the case that cotton seed sludge oil and cotten seed acid oil is the residue after the cotten seed oil is refind i.e., what is known as 'washed cotton seed oil' is taken away. this residue is usually sold and is used in the manufacture of soap as oil. the mere fact that it is a residue left after the refined cotton seed oil is taken away, or that it contains some residuary additives it does not cease to be 'vegetable oil'. having regard to the wide language used it is not possible to restrict it only a edible vegetable oils. apart from this, groundnut oil which is also an edible oil is shown as a separate entry 24. this also negatives the contention that entry 128 relates to edible oils. 6. for the aforesaid reasons, we hold that cotton seed sludge oil and cotton seed acid oil fall under entry 128 of the andhra pradesh general sales tax act, and are liable to be taxes accordingly in the relevant assessment year. we confirm the conclusion of the tribunal though we have adopted a slightly different reasoning. tax revision case is dismissed. we make no order as to costs. advocate's fee rs. 250. 7. petition dismissed.