IMPORTANT POITS
Oil cake and de-oiled cake are two distinctly different commercial products.
Assessment made on consideration of all materials on record could not have been reopened.

JUDGMENT :

Dipak Misra, J.

Delay condoned.

2. Leave granted.

3. The assessee-appellant is engaged in the manufacturing of refined edible oil by solvent extraction process and refining along with trading in edible oil and oil-cake. For the assessment year ending 31-3-2003 the assessee had filed Revised Annual Return in Form 4, declaring the Gross Taxable Turnovers at Rs.19,76,37,615-00 and Rs.1,60,93,055-00 respectively.

4. As the factual narration would show the appellant sold Sunflower De-oiled Cake (SF DOC) and several other goods in the course of inter-State trade and commerce and in the course of the said transaction the appellant produced 'C' Forms obtained from the dealers in inter-State sales. The assessee had admitted the liability of tax at 2 per cent on the sale of SF DOC in the course of inter-State trade and commerce. The Deputy Commissioner of Commercial Taxes (Assessment) Chitradurga, the assessing authority, had passed an order of assessment under Section 9(2) of the Central Sales Tax Act, 1956 (for brevity, 'the CST Act') on 24th January, 2005, whereby it had expressed the view that a sum of Rs.4,75,68,764/- was subjected to tax at 2 per cent. The assessing officer had granted the benefit on production of 'C' Form in terms of the Notification No.FD 119 CSL 2002 (2) dated 31st May, 2002.

5. After the order of assessment was passed, the succeeding assessing officer formed an opinion that there was an escapement of tax due to the reason that the inter-State sales of SF DOC was actually liable to tax at 4 percent and not at 2 per cent, which had been erroneously adopted by the earlier assessing authority. Following the principles of natural justice, he levied the tax at 4 per cent on the inter-State sales of SF DOC.

6. The aforesaid order was called in question in an appeal before the Joint Commissioner of Commercial Taxes (Appeals), Davansere Division, Davangere under Section 20(5) read with Section 9(2) of the CST Act. The Appellate Authority noted the submissions advanced on behalf of the assessee as well as the revenue and thereafter referred to Section 12-A of the Karnataka Sales Tax Act, 1957 (for short, 'KST Act') and referred to the decisions in the cases of Nagaraja Overseals Traders vs. The State of Mysore, JJ STC 315 Mahaveer Drug House vs. ACCT Gandhinagar, Bangalore, [1994] 93 STC 51 (Kar) State of Andhra Pradesh vs. Ampro Food Products, 96 STC 618 Giridharial Co. vs. State of Andhra Pradesh, 97 STC 442 C. Sathiragu and Sons vs. State of Andhra Pradesh, 111 STC 703 Somani Brothers vs. State of Bihar, 99 STC 47 Eureka Forbes vs. State of Bihar, 119 STC 460 and came to hold that the change of opinion could not have been a ground for reopening of assessment in exercise of power under Section 12-A of the KST Act and, accordingly, set aside the order of re-assessment.

7. Though the assessee succeeded, yet it preferred an appeal, being STA No.425 of 2006 before the Karnataka Appellate Tribunal, Bangalore (for short, 'the tribunal'), as the first Appellate Authority had not expressed any opinion with regard to rate of tax on oil-cake and de-oiled cake. It was contended before the Tribunal that the oil cake and de-oiled cake as per the commercial parlance are one and the same and, therefore, the rate of tax has to be at 2 per cent and not 4 per cent. The tribunal after noting the submissions referred to the schedule in the notification and the decision in M/s Sterling Foods vs. State of Karnataka, (1986) 63 STC 239 State of Karnataka vs. M/s Goa Granites, 2007 (5) VST 434 (Kar) M/s Habeeb Protiens and Fats Extracts, Hiriyur, Chitradurga District vs. Commissioner of Commercial Taxes, Bangalore and Anr., 2005 (58) Kar.L.J. 155 and came to hold as under :

“Thus, we hold that the expression 'oil cake in sl. No. 6 of the CST Notification No. FD 119 CSL 2002(2) dated 31.5.2002 would include also de-oiled cake and that therefore the reassessment order passed by the AA under CST Act, 1956 for the year 2002-03 in so far as it c