B.P. OIL MILLS LTD. versus SALES TAX TRIBUNAL AND ORS.

B.P. OIL MILLS LTD. versus SALES TAX TRIBUNAL AND ORS.

The nature and extent of the process to which crude oil is subjected to obtain refined oil brings the latter within the meaning of 'goods manufactured' as per Section 3(3)(b)(iii) of the U.P. Trade Tax Act, 1948. Therefore, the appellant is liable to pay sales tax on its sale, even if tax was already paid on the crude oil at an earlier stage, as the Act expressly provides for multistage taxation.

Parties
Appellant: B.P. Oil Mills Ltd.; Respondents: Sales Tax Tribunal and Ors.
Jurisdiction
India
Judgment Date
03 September 1998
Procedural Posture
Civil Appeal / Supreme Court Appeal Against Dismissal by High Court
Outcome
Appeal dismissed
Legal Topics
Sales Tax Liability, Manufacture and Processing Under Trade Tax, Multistage Taxation, Interpretation of 'manufacture' and 'processing'
Taxation Law Sales Tax Liability Manufacture and Processing Under Trade Tax Multistage Taxation Interpretation of 'manufacture' and 'processing'

Case Brief

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Parties

B.P. Oil Mills Ltd.

Appellant

Sales Tax Tribunal and Ors.

Respondents

Procedural Posture

Civil Appeal / Supreme Court Appeal Against Dismissal by High Court

Legal Issues

  1. 1 Whether the processing of crude oil into refined oil amounts to 'manufacture' under Section 2(e-1) of the U.P. Trade Tax Act, 1948, thereby making the sale of refined oil liable to sales tax under Section 3(3)(b)(iii).
  2. 2 Whether subjecting refined oil to sales tax amounts to impermissible double taxation when tax has already been paid on the purchase of crude oil.

Ratio Decidendi

The nature and extent of the process to which crude oil is subjected to obtain refined oil brings the latter within the meaning of 'goods manufactured' as per Section 3(3)(b)(iii) of the U.P. Trade Tax Act, 1948. Therefore, the appellant is liable to pay sales tax on its sale, even if tax was already paid on the crude oil at an earlier stage, as the Act expressly provides for multistage taxation.

Court Disposition

Appeal dismissed

Orders

  • The appeal is dismissed. There will be no order as to costs.