M/S.Vikas Poha Mill vs. Divisional Dy. CCT, [2013] 63 VST 132 (Chhatisgarh)

FACTS
The Petitioner manufacturer of Poha and Murmura claimed exemption from payment of tax on sale of it being covered by the term “Cereals” under Notification dated March 30, 1994 read with section 14 of the CST Act, 1956. The department rejected the claimas the sale of Poha and Murmura is covered by specific entry 23, Part IV of Schedule II of the Act and also held that it is not covered by the term cereals, as there is a separate schedule entry. The petitioner filed writ petition before the Chhattisgarh High Court against the aforesaid assessment order.

HELD
The State has placed Poha and Murmura in the separate entry for the purpose of exigibility to taxation. However, in the exemption notification the word cereals includes, inter alia “rice” as enumerated in (i) to (x) in section 14 of the CST Act. All the terms used are the basic products, not other forms of the product. The term rice includes beaten and puffed rice both. Thus, the exemption is granted to all the goods, as specified in the State Act, the State can not get any advantage from the fact that there has been a separate entry for exigibility to tax in respect of Poha and Murmura. Accordingly, Poha and Murmura are one form of rice and entitled to exemption under the above stated notification. The exemption has been granted to Cereals which are enumerated after “that is to Say”. The term “Cereals” used in section 14( i) of the CST Act clearly means “rice “ and other like products of rice like Poha and Murmura. Thus, rice including Poha and Murmura are included within the definition of Cereals and as such covered by the notification dated March 30, 1994 for the purpose of exemption. Accordingly, the High Court allowed the writ petition and the matter was referred back to the assessing officer to make assessment a fresh in the light of law decided by the High Court.