The levy of purchase tax on ground-nuts and sales tax on edible oils, as well as the imposition of a penalty under Sec.10 (6) of the Punjab General Sales Tax Act, 1948, were declared void and unsustainable due to the invalidity of the underlying tax levies.

, J.

1. This judgment will dispose of two writ petitions by Hans Raj Choudhri, both directed against the Excise and Taxation Officer (Enforcement ). Civil Writ No.2371 of 1964 relates to the levy of purchase tax in respect of two items, whereas Civil Writ No.2562 of 1964 is concerned with the liability created by levying a penalty of Rs.15,000 under Sec.10 (6) of the Punjab General Sales Tax Act, 1948 .

2. The assessment order in respect of which the liability has been created relates to 1962-63. In the order passed by the Assessing Authority on 30th of September, 1964, which is sought to be impugned in the first petition, a levy of purchase tax on ground-nuts at the rate of 2 per cent. was imposed to the tune of Rs.34,950.77 P. , while a sum of Rs.934.27 P. was assessed as sales tax on edible oils. The first imposition is challenged on the ground that the levy of the tax is void and ultra vires.

3. The petitioner is a partnership firm doing the business of crushing oil-seeds at Khanna. During the course of its business, it makes purchases of oil-seeds also. It is not disputed that ground-nuts had been purchased by the petitioner and if these are regarded as oil-seeds the levy would be justifiable. It is contended by Mr. Bhagirath Dass, the learned counsel for the petitioner, that the purchase tax could be levied on articles mentioned in Schedule C of the Punjab General Sales Tax Act (hereinafter called the Act) under category (3) :oil-seeds, that is to say, seeds yielding non-volatile oils used for human consumption, or in industry, or in the manufacture of varnishes, soaps and the like, or in lubrication, and volatile oils used chiefly in medicines, perfumes, cosmetics and the like.

4. Schedule C has been inserted in the Act in pursuance of Clause (ff) of Sec.2 which was to take effect from 1st April, 1960, and defines "purchase" with all its grammatical or cognate expressions, to mean "the acquisition of goods specified in Schedule C for cash or deferred payment or other valuable consideration otherwise than under a mortgage, hypothecation, charge or pledge. " The Assessing Authority has observed that "the ground-nuts are without any shadow of doubt oil-seeds. " Mr. Bhagirath Dass has invited my attention to a decision of the Madhya Pradesh High Court of Chief Justice Dixit and Shiv Dayal, J. , in Commissioner of Sales Tax, Madhya Pradesh, Indore V/s. Bakhat Rai and Co. [1966] 18 S. T. C.285. The definition of "oil-seeds" in the C. P. and Berar Sales Tax Act, 1947 , is in identical terms with the one mentioned in Schedule C. The point for decision before the Madhya Pradesh Bench was whether coconuts, ground-nuts and jira are oil-seeds and it was held that "every article or seed which can yield oil is not an oil-seed as contemplated by item No.3 of Part II of Schedule I of the C. P. and Berar Sales Tax Act, 1947 . The test is not whether oil can be extracted from a fruit or seed, but it is whether in common parlance the article is known as oil-seed used principally for the extraction of oil. Judged by this test, it cannot be said that coconuts, ground-nuts and jira fall within the meaning of the term oil-seeds. . . " If it is found that ground-nuts are not oil-seeds, the foundation for the assessment no longer exists and the levy must be declared to be without warrant.

5. Mr. Prem Chand Jain, the learned counsel for the State, contends, however, that though the ruling of the Madhya Pradesh High Court appears to be decisive on the point, the matter is not concluded thereby. He has invited my attention to paragraph 15 of the petition itself in which it is said that: the question as to whether the purchase tax can be imposed on oil-seeds is pending disposal before the Honble Supreme Court in Civil Appeals Nos.526 and 527 of 1964.

6. Neither counsel has been able to refer me to a decision of the Supreme Court on this point. The reasoning of the Madhya Pradesh High Court does not appear to be unreasonable and prima facie,