SRINIVASAN, J.

The petitioners in these cases are dealers in groundnut oil. They sold groundnut oil to Hindustan Lever Limited, which in its turn utilised the oil for the manufacture of vanaspati. The exact quantum of the turnover of such sales is not of importance, for only a question of interpretation of a provision of the Sales Tax Act is called for and that question arises in the following manner : Under section 3 of the Madras General Sales Tax Act, 1959, every dealer whose total turnover for a year is not less than Rs. 10, 000, shall pay a tax for each year at the rate of 2 per cent. on his taxable turnover. It would be sufficient to state the general liability of the dealer in such broad terms. The First Schedule lists out a number of goods, and sub-section (2) of section 3 states that in the case of goods mentioned in the First Schedule, the tax shall be payable at the rate and only at the point specified therein on the turnover relating to such goods, whatever may be the quantum of turnover in that year. This is in the nature of an exception to section 3(1). Sub-section (3) states :

"Notwithstanding anything contained in sub-section (1) or sub-section (2), the tax payable by a dealer in respect of any sale of goods mentioned in the First Schedule by such dealer to another for use by the latter as component part of any other goods mentioned in that Schedule which he intends to manufacture inside the State for sale, shall be at the rate of only one per cent. of the turnover relating to such sale." *

In order to understand this provision, we may refer in some detail to the First Schedule. The First Schedule contains a list of goods and specifies the single point of the levy of tax as well as the rate of tax at that point. While the general provision of section 3(1) fixes the rate of tax at 2 per cent. on the turnover at the stage of every sale, even successive sales, in the case of all goods, sub-section (2) makes an exception and states that in the case of goods listed in the First Schedule, the tax shall be at a single point only, the point being specified, and further the rate of tax shall be as indicated, which is, generally speaking, higher than 2 per cent. These goods being subjected to a single point levy, their sales attract the somewhat higher rate of tax specified in the First Schedule. Sub-section (3) makes a further exception. If the dealer sells any of the items listed in this Schedule to another dealer for use by the latter in the manufacture of some other item of goods mentioned in the same schedule, then the rate of tax shall be only one per cent. But the single point is still maintained. It would accordingly be seen that in the case of such goods which enter as component parts in the manufacture of other goods, both kinds of goods being borne on the First Schedule, the rate of tax is at a very low figure at the stage of sale to the manufacturer. But the manufactured goods, being also listed in the First Schedule, will be liable to the single point levy of tax at the stage and the rate specified in that Schedule.The proviso to sub-section (3) further requires that the main part of the section shall not apply unless the dealer, selling the goods and claiming the lower rate of taxation of one per cent., furnishes to the assessing authority

"in the prescribed manner a declaration duly filled in and signed by the dealer to whom the goods are sold, containing the prescribed particulars in the prescribed form obtained from the prescribed authority." *

It may be broadly stated that such declarations were in a few cases covered by the revision petitions produced before the assessing authority and in a few others only before the Appellate Assistant Commissioner at the time of the hearing of the appeal from the assessment to tax.

It has also further to be mentioned that this sub-section underwent some changes. Originally, sub-section (3) provided that the purchasing dealer should use the goods as component