Summary
The appellant purchased groundnuts out of which it manu- factured groundnut oil ; it also refined the oil and hydrogenated it converting it into Vanaspati. It sold the oil in all the three states. Under the Madras General Sales Tax Act, 1939, and the Turnover and Assessment Rules, for determining the taxable turnover the appellant was entitled to deduct the purchase price of the groundnuts from the proceeds of the sale of all groundnut oil. The High Court held that the appellant was entitled to the deduction in respect of the sales of unrefined and refined groundnut oil but not in respect of the sales of hydrogenated oil on the ground that Vanaspati was not " groundnut oil " but a product of groundnut oil.
Held, that the appellant was entitled to the deduction in respect of the sales of hydrogenated groundnut oil also.The hydrogenated groundnut oil continued to be " groundnut oil " notwithstanding the processing which was merely for the purpose of rendering the oil more stable. To be groundnut oil two conditions had to be satisfied-it must be from groundnut and it must be " oil ". The hydrogenated oil was from groundnut and in its essential nature it remained an oil. It continued to be used for the same purposes as groundnut oil which had not undergone the process. A liquid state was not an essential characteristic of a vegetable oil; the mere fact that hydrogenation made it semisolid did not alter its character as an oil.See the full content of this document
Extract
M/s. Tungabhadra Industries Ltd. VS. The Commercial Tax Officer, Kurnool.
PETITIONER: M/S. TUNGABHADRA INDUSTRIES LTD.Vs.RESPONDENT: THE COMMERCIAL TAX OFFICER, KURNOOL.DATE OF JUDGMENT: 18/10/1960BENCH: AYYANGAR, N. RAJAGOPALABENCH: AYYANGAR, N. RAJAGOPALADAS, S.K.HIDAYATULLAH, M.GUPTA, K.C. DASSHAH, J.C.CITATION: 1961 AIR 412 1961 SCR (2) 14CITATOR INFO : R 1964 SC1372 (3,12,13)RF 1974 SC1362 (5)R 1978 SC 945 (13,15)R 1978 SC1496 (12)RF 1980 SC1227 (6)D 1981 SC1649 (13)E&R 1985 SC1293 (84)RF 1989 SC 516 (17,18)C 1989 SC1316 (13)F 1990 SC 27 (7)ACT: Sales Tax--Hydrogenated groundnut oil (Vanaspati), if groundnut oil--Madras General Sales Tax (Turnover and Assessment) Rules, 1939, rr. 4, 5 and 18.JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 498 of 1958.Appeal from the judgment and order dated February 11, 1955, of the Andhra Pradesh High Court in T. R. C. No. 120 of 1953 arising out of the judgment and order dated December 29, 1952, of the Sales Tax Tribunal, Madras, in Tribunal Appeal No. 857 of 1951.A. V. Viswanatha Sastri, M. Ranganatha Sastri and M. S. K.Sastri, for the appellants.D. Narasaraju, Advocate-General for the State of 15Andhra Pradesh., T. V. R. Tatachari, D. Venkatappayya Sastri and T. M. Sen, for the respondent.1960...
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