By-products of cereals, including 'maize oil' and 'cake', are exempt from payment of sales tax under the Central/State Sales Tax Acts.

A. M. SAPRE, J. - The decision rendered in this writ shall also govern the disposal of W.P. No. 4023 of 2005 because both these writs involve common questions of law based on identical facts and secondly, arise between the same parties except the difference being that of involvement of different period of assessment years under the Central/State Sales Tax Acts.

The question that arises for consideration in these two writs is whether a commodity known as "maize oil" and "cake", which is a by-product of "maize" is a taxable commodity under the Central Sales Tax Act (for short, "the CST Act") and M.P. General Sales Tax Act and M. P. Commercial Tax Act (for short, "MPGST Act/MPCT Act") and if so at what rate ? In other words, the question that arises for consideration in these writs is whether the commodity in question, which is in the nature of by-product of "maize" is subjected to payment of sales tax under the Sales Tax Acts and if so, under which entry and if they are exempt from payment of sales tax then under which entry ?

By filing this writ under articles 226/227 of the Constitution of India, the petitioner (dealer) seeks to challenge the revision orders passed by the Upper Commissioner of Commercial Tax, Indore dated October 31, 2002 (annexures P17 to 17E). So far as order dated October 31, 2002 (annexure P17) is concerned, it arises out of an assessment order dated May 26, 1997 passed by the assessing officer, Indore whereas other orders, i.e., annexures P17A to 17E are concerned, they relate to different period of assessment and arise out of assessment orders passed on different dates under the State Sales Tax Acts.

The petitioner is a registered dealer. It is engaged in the business of manufacture of a commodity known as "maize starch". It is the case of the petitioner, that in the course of manufacture of the said commodity, which is manufactured basically with the use of "maize", certain by-products, namely, "maize oil" and "cake" are generated.

The case of the petitioner before the taxing authorities was that both these commodities, i.e., "maize oil" and "cake" are exempt from payment of sales tax under the Central/State Sales Tax Acts during the period under consideration. The case of the State was that they are taxable and hence subjected to payment of sales tax at the rate of two per cent.

As observed supra, it is this question, which arose before the assessing officer (AO) in the assessment proceedings out of which this writ petition arises. The AO by order dated May 26, 1997 (annexure P16) did not accept the petitioner's contention and imposed a tax at the rate of two per cent. According to the assessing officer, since, the Commissioner of Sales Tax in the case of Tirupati Starch and Chemicals Ltd. [1995] 28 VKN 205, had already taken the view that these commodities are subjected to tax at the rate of two per cent and hence, the petitioner too is liable to pay sales tax at the rate of two per cent on these commodities. It was accordingly taxed. The petitioner felt aggrieved, filed revision before the Upper Commissioner. By order impugned dated October 31, 2002 (annexure P17), the revision was dismissed and as a consequence, upheld the assessment order including the view taken therein. It is against these orders, the dealer felt aggrieved and filed these writ petitions under articles 226/227 of the Constitution of India. The State has filed the return defending the impugned orders.

Heard Mr. P. M. Choudhary, learned counsel for the petitioner and Mr. A. S. Kutumbale, learned Additional Advocate - General for the respondent/State.

The learned counsel for the petitioner while assailing the legality and proprietary of the impugned orders contended that the assessing officer and revisional authority erred in holding that "maize oil" and "cake" are taxable commodities. According to learned counsel, both commodities being in the nature of by-product of "maize" and "maize" being a "cereals" as specified in cla