Judgement

KHALID, J. :- The short question that falls to be decided in these appeals, by certificate, against the judgment of a Division Bench of the Kerala High Court, is whether goat and sheep and the meat got after slaughtering them are the same for the purpose of sales tax in the State. The High Court, disagreeing with the Sales Tax Appellate Tribunal held them to be the same goods.

2. It is the admitted case in the appeals that the respondents purchase goat and sheep for slaughtering them and then sell the meat they get after such slaughter. It is also admitted that live. stock will be goods within the meaning of the Kerala General Sales Tax Act (the Act for short). The respondents submitted nil returns claiming exemption on the sales turnover of meat and skin. Assessments were completed accepting these nil returns. Subsequently the assessees were informed that the purchase turnover of goats and sheep had escaped levy of tax under S. 5-A of the Act. After necessary hearing, assessment orders were passed, holding that the assessees converted the animals into meat by a manufacturing process, within the meaning of S. 5-A of the Act. The Appellate Officer and the Tribunal agreed with this finding of the assessing officer. The assessees took the matter before the High Court and challenged the assessment order. The High Court. quashed the assessment orders and held that the meat got after slaughtering the animals will not be other goods within the meaning of S. 5-A. Hence these appeals by the State.

3. For a proper understanding of the dispute raised in these cases it is necessary to read Section 5-A(1)(a) of the Act which alone is relevant of our purpose.

"5A. Levy of purchase tax :- (1) Every dealer who in the course of his business purchases from a registered dealer or from any other person any goods, the sale or purchase of which is liable to tax under this Act, in circumstances in which no tax is payable under Section 5, and either -

(a) consumes such goods in the manufacture of other goods for sale or otherwise;"

The Section speaks of three ingredients, the existence of which alone, will attract levy of tax. They are : (i) consumption of the goods (ii) process of manufacture involved and (iii) production of other goods. The question before us is whether these ingredients are present when goats and sheep are slaughtered and converted into meat for sale. The assessees contention is that he is only processing live goat or sheep into mutton by killing them and cutting them into pieces and that in this process there was neither consumption nor a manufacture nor production of "other goods".

4. Before dealing with the authorities cited at the Bar, it would be useful to consider, unaided by authorities, the question whether goats and sheep and mutton are the same goods known to commercial circles and in common parlance. We will see how a common man understands these expressions. If a person goes to a butchers shop and asks for mutton he will not be given goats nor will he be satisfied with goats. Equally so when he intends to purchase goats he will not be satisfied if mutton is supplied to him. This is because the two, both in commercial circles and in common parlance, are two different things having a distinct individuality of their own one different from the other. It would therefore be wrong to assume, as the High Court has done, that these two goods are the same. What happens is that when goats and sheep are converted into meat, "other goods" within the meaning of the Section come into being. It is true that to attract Section 5-A, two other ingredients are also to be satisfied, namely consumption and manufacture. Consumption is a word of wide import. It denotes the taking in of something, to convert that something into another. Here the slaughter of the animals and their conversion into meat is the consequence of consumption of goats in a legal sense. In such conversion, a process of manufacture can also be inferred. The importa