JUDGMENT

RANGANATHAN, J:— A common question is involved in all these matters which are, therefore, being disposed of by this common judgment. The question is whether tobacco seed oil and tobacco seed cake are entitled to exemption under the A. P. General Sales Tax Act, 1957 (hereinafter referred to as the Act). The question arises in the following circumstances.

2. Section 8 of the Act confers an exemption from sales tax in respect of certain goods. It provides that:

Subject to such restrictions and conditions as may be prescribed including conditions as to licence fees, a dealer who deals in the goods specified in the fourth schedule shall be exempt from tax under this Act in respect of such goods.

Entry 7 in the fourth Schedule was tobacco and all its products.

3. The Andhra Pradesh High Court in Amara Purushotham Mamidi Obaian and Co. v. State of A. P., (1972) 29 STC 654, was called upon to consider whether tobacco seed, tobacco seed oil and tobacco seed cake were exempt from sales tax under the above provision. The Bench held that tobacco seeds could be said to be tobacco only so long as they remain attached to the plant. They, however, ceased to be tobacco the moment they are removed from the plant. Thereafter, they may be considered to be a product of tobacco. But they constitute a separate and a distinct class of goods with independent properties and potentialities not the same as those of the parent plant. Products manufactured out of tobacco seed could not be said to be products of tobacco. The Court, in this context, referred to the analogy of cotton seeds, which have been considered to be distinct from cotton. The above Bench decision was rendered in spite of the wide words of the exemption, which covered not only tobacco in its comprehensive sense but also all products of tobacco.

4. The Act was amended by Amendment Act 9 of 1970. There was a slight amendment, which is not material for our present purpose, in S. 8 which substituted the words "licences and licence fees" in place of words "licence fees" alone which had been mentioned in the section previously. Tobacco continued to be the item in Entry 7 of the Fourth Schedule but this entry now referred only to "tobacco". The words "and all its products", which had been used earlier, were omitted. An explanation was added to the Fourth Schedule to the following effect :

"Explanation- Expressions in items 5, 6 and 7 have the same meanings assigned to them in Additional Duties of Excise (Goods of Special Importance) Act of 1957 (Central Act 58 of 1957)."

5. The new explanation to Schedule IV makes it necessary for us to consider the provisions of Central Act 58 of 1957. This is an Act which provides for the levy and collection of additional duties of excise in respect of certain goods, over and above the duties of excise levied and collected in respect of such goods under the Central Excises and Salt Act, 1944 (hereinafter referred to as the 1944 Act). The Statement of Objects and Reasons of Act 58 of 1957 has been referred to before us and its short contents may be extracted here:

"The object of the bill is to impose additional duties of excise in replacement of the sales taxes levied by the Union and States on sugar, tobacco and mill made textiles and to distribute the net proceeds of these taxes, except the proceeds attributable to Union territories, to the States. The distribution of proceeds of the additional duties broadly follows the pattern recommended by the Second Finance Commission. Provision has been made that the States which levy a tax on the sale or purchase of these commodities after the lst April, 1958 do not participate in the distribution of the net proceeds. Provision is also being made in the Bill for including these three goods in the category of goods declared to be of special importance in inter State trade or commerce so that, following the imposition of uniform duties of excise on them, the rates of sales tax, if levied by any State are subject from 1