A.K. Goeal, C.J.

1. This order will dispose of W. P.(C) No. 5391 of 2010, W.P. (C) No. 5451 of 2010 and W.P. (C) No. 5473 of 2010, as all the three petitions involve common question of validity of levy of purchase tax on the transaction of turnover of purchase of raw material, i.e., oil-seeds referable to oil-cake transferred outside the State on consignment basis in which event no sales tax is attracted. According to the petitioner, the oilcakes being merely by-product, in the course of production of oil, cannot be subjected to levy of tax. In W.P. (C) No. 5391 of 2010, Which is identical to other petitions, the petitioner is a dealer registered under the provisions of the Assam Value Added Tax Act, 2003. It purchases mustard seeds which are used for manufacturing of oil and the oil is sold in the local market. The by-product, i.e., oil-cakes are disposed of by way of stock transfer on consignment basis outside the State of Assam.

2. The assessing authority, in the course of assessment for the assessment year 2006-07, sought to levy purchase tax oh the proportionate purchase value of the mustard seeds referable to the production of oil-cakes under section 12(iii) of the Act as follows:

The dealer is paying the output tax under section 10 against sale of mustard oil within the State. The second product mustard oil-cake is disposed of by the dealer by way of stock transfer to its appointed agents in the State of Tripura. Out of total stock of mustard seed used in the manufacturing of mustard oil-cake a part comprises locally procured mustard seed from unregistered dealer without payment of VAT. As per section 12(iii) of the Assam Value Added Tax Act, 2003 the dealer is found liable to purchase tax at four per cent on the proportionate purchase value of locally procured mustard seed, from unregistered dealer without payment of VAX which was used as raw material in the manufacturing of mustard oil-cake which was subsequently stock transferred to outside the State (Tripura).

3. Aggrieved by the above, the petitioner filed a revision petition before the Commissioner of Taxes, which has been dismissed with the following observations:

In the course of hearing the learned senior advocate for the petitioner admitted that mustard oil-cake is mentioned in certificate of registration of the petitioner as a commodity being dealt by the petitioner along with mustard oil. He also agreed that the value of mustard oil-cake procured is more than 30 per cent of the value of mustard oil produced in the process of manufacture.

The value of mustard oil-cake is significant part of total turnover of the petitioner, it cannot be considered as wastage as claimed by the petitioner. Although mustard oil-cake is not the main product of the process of manufacture, but it is also a product of manufacture. Further, the petitioner has got mustard oil-cake included as a commodity dealt by it. Hence, the petitioner cannot claim it to be wastage.

4. The contention raised in the petition is the intention of the Legislature is to collect tax on purchase of goods where no tax is leviable on sale under section 10. In the present case, the petitioner is paying tax on the sale of oil which is manufactured from the mustard seeds and oil-cake was merely by-product. The proportionate value of purchase turnover of mustard seeds referable to value of oil-cakes, produced therefrom, could not be subjected to purchase tax as manufacture of oil-cakes is automatic. Reliance has been in a situation where sales tax is not attracted, the levy of purchase tax was certainly permissible on oil-seeds. Reliance has been placed on the judgment of the honourable Supreme Court in Hotel Balaji v. State of Andhra Pradesh [1993] 88 STC 98 (SC); [1993] Supp 4 SCC 536 and the judgment of the Punjab and Haryana High Court in Shri Krishna Oil and General Mills v. State of Punjab [2010] 35 VST 226 (P & H) passed in GSTR No. 63 of 1997, decided on January 22, 2009.

5. The question for consideration