Judgment

AYYANGAR, J. : The points raised in these three appeals which come before us by virtue of special leave under Art. 136 of the Constitution are somewhat out of the ordinary and raise for consideration whether the common order passed by the High Court of Andhra Pradesh rejecting application to review an earlier order by that court, is correct on the facts which we shall state presently.

2. The appellant - M/s. Thungabhadra Industries Ltd. are manufacturers of groundnut oil, part of which they convert for sale into hydrogenated oil while the rest is sold as ordinary oil. Under the Madras General Sales Tax Act, hereinafter referred to as the Act, which has application to the State of Andhra Pradesh, while in regard to groundnuts the tax is levied at the point of purchase groundnut oil is taxed at the point of sale. The result of this feature naturally is that when a person purchases groundnut and converts the same into oil and sells the oil extracted he has to pay tax at both the points. Rules have been framed in order to alleviate what might be considered a hardship by reason of this double levy. Rule 5(k) of the Turnover and Assessment Rules provides :

"5. (k) in the case of a registered manufacturer of groundnut oil and cake, the amount which he is entitled to deduct from his gross turnover under Rule 18 subject to the conditions specified in that rule".

and Rule 18 referred to reads :

"18(1) Any dealer who manufactures groundnut oil and cake from groundnut and/or kernel purchased by him may, on application to the assessing authority having jurisdiction over the area in which he carries on his business, be registered as a manufacturer of groundnut oil and cake.

2. Every such registered manufacturer of groundnut oil will be entitled to a deduction under clause (k) of sub-rule (1) of Rule 5 equal to the value of the groundnut and/or kernel, purchased by him and converted into oil and cake if he has paid the tax to the State on such purchases :

Provided that the amount for which the oil is sold is included in his net turnover :

Provided further that the amount of the turnover in respect of which deduction is allowed shall not exceed the amount of the turnover attributable to the groundnut and/or kernel used in the manufacture of oil and included in the net turnover."

The appellant is admittedly a manufacturer who is registered for the purposes of that rule.

3. In respect of the year 1949-50 the appellant while submitting his return disclosing his turnover of the sale of oil, included therein the value of the hydrogenated oil that he sold and claimed a deduction under the rule in respect of the value of the groundnuts which had been utilised for conversion into hydrogenated oil on which he had paid tax at the point of their purchase. This claim was negatived by the Sales Tax authorities on the ground that "hydrogenated groundnut oil" was not "groundnut oil" within R. 18(2). Having failed before the departmental authorities in getting its claim to deduction allowed, the appellant approached the High Court with a Tax Revision Case numbered 120 of 1953 on its file but the High Court, by its judgment dated February 11, 1955, upheld the view of the department. An application was thereafter made to the High Court to grant a certificate of fitness under Art. 133(1) on the ground that substantial question of law as to the interpretation of the General Sales Tax Act and the Rules made thereunder, as well as of certain other enactments which were relied upon in support of their claim by the appellants, arose for decision in the case. The learned Judges by their order dated February 21, 1956 granted the certificate. In view of the points arising in this appeal we consider it would be convenient to set out the text of this order :

"This petition raises a question of general importance namely whether hydrogenated groundnut oil popularly known as Vanaspathi is groundnut oil so as to enable the assessee to claim exemption under Rules 18(2) and 5(1