Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2009 Supreme(SC) 443

2009(4) Supreme 193
SUPREME COURT OF INDIA
(From Jharkhand High Court)
S.B. Sinha and Cyriac Joseph, JJ.
M/s BOC India Ltd. — Appellant
versus
State of Jharkhand & Ors. — Respondents
Civil Appeal No. 1538 of 2009
[Arising Out of S.L.P. (Civil) No. 25483 of 2007]
With
Civil Appeal No. 1540 of 2009
[Arising out of S.L.P. (Civil) No. 3045 of 2008]
Decided on : 05-03-2009

Advocates appeared:
For the Appellants :S. Ganesh, Shyam Divan, Sr. Advs., M.K. Dua, gopal Jain, Ms. Nandini Gorc, Ms. sonia Nigam, Kartik Bhatnagar, Mrs. Manik Karanjawala, Advocates.
For The Respondents:B.B. Singh, Rajesh Pathak, Advocates.

IMPORTANT POINT
If an assessee is held to be a person aggrieved to question the validity of the demand raised on it, it will have the locus standi to maintain a writ petition.

Headnote:(a) Constitution of India,1950 – Article 226 – Commercial Taxes authorities raising demands on BOC and threatening it of recovery and other penal actions – BOC is thus aggrieved person and is entitled to maintain a writ application. (Paras 17 and 19)
        (1898) 15 RPC 131; 2008 (8) SCALE 354 – Relied upon.
        (b) Words and Phrases – Raw Material – Oxygen gas when used would be burnt up – Whether it is a raw material owing to its utilization in the manufacturing process, is a question of fact – Question should have been raised before the Assessing Authority who would have decided it. (Para 20)
        (1989) 4 SCC 566; (1994) 6 SCC 479; (2008) 1 SCC 382; (2008) 8 SCC 369 – Referred.
        (c) Judicial Review – It is not correct to contend that as a procedure has been prescribed in the statute, the same must be followed or no benefit would be available to the assessee. (Para 24)
        (1969) 1 SCR 499; (2007) 5 SCC 85 – Distinguished.
        (d) Judicial Review – If an applicant does not claim benefit under a particular notification at the initial stage, he is not debarred, prohibited or estopped from claiming such benefit at a later stage. (Para 26)
        (2007) 4 SCC 573 – Relied upon.
       Facts of the case :
        1. M/s Tata Iron & Steel Company Limited (TISCO) purchases oxygen gas from M/s B.O.C. India Ltd. (BOC), the producer and supplier, for industrial and medical use. BOC began supply of oxygen gas to TISCO from the year 1993.
        2. TISCO applied for and was granted a registration certificate in terms of the provisions of Section 13(1)(b) of the Bihar Finance Act, 1981 . The said certificate originally was granted on 16.3.1983 and from time to time till 31.5.2004.
        3. In terms of the provisions of the Act and the rules framed thereunder, a dealer is required to show the list of goods which were taxable at 1% as also the list of those goods which were taxable at 3%. Oxygen was shown in the list of goods taxable at 3% as specified in Annexure ‘B’ appended to the registration certificate.
        4. Concededly, TISCO never applied for amendment or modification of the Registration Certificate. Oxygen gas continued to be allowed to remain in Annexure ‘B’ of the Registration Certificate wherefor sales tax was payable at the rate of three per centum. Till the Assessment Year 2002-2003 for supply of oxygen gas to TISCO, BOC also used to charge sales tax at the rate of three per centum. However, the said purported mistake was sought to be rectified by BOC in terms of the Notification dated 3.2.1986 charging two per centum sales tax on the supplies of oxygen gas made to TISCO. TISCO issued a declaration in terms of Form IX of the Rules. BOC also deposited tax at the rate of two per cent on the sale of industrial gases to TISCO.
        5. The demand was raised on BOC by the Deputy Commissioner of Commercial Taxes, Jamshedpur Circle, Jamshedpur opining that TISCO was liable to pay concessional purchase tax at the rate of three per cent on Oxygen gas. BOC was, therefore, directed to produce the evidence of deposit of the balance differential amount of Rs.1,02,45,572/- by 18.8.2005 failing which other modes of recovery would be adopted.
        6. Questioning the validity and/or legality of the said notice, a Writ Petition was filed before the High Court of Jharkhad at Ranchi, which by reason of the impugned judgment has been dismissed.
       Finding of the Court :
        Impugned judgment cannot be sustained.
       Result : Appeals allowed.

JUDGMENT

S.B. Sinha, J.—

1. Leave granted.

2. These two appeals arising out of a judgment and order dated 2.11.2007 rendered by the High Court of Jharkhand at Ranchi in Writ Petition (T) No. 4693 of 2005 were taken up for hearing together and are being disposed of by this common judgment.

3. The factual matrix involved is not in dispute.

M/s Tata Iron & Steel Company Limited (TISCO) produces steel. For the said purpose, it purchases oxygen gas from M/s B.O.C. India Ltd. (BOC), the producer and supplier, for industrial and medical use. BOC began supply of oxygen gas to TISCO from the year 1993.

Indisputably, TISCO applied for and was granted a registration certificate in terms of the provisions of Section 13(1)(b) of the Bihar Finance Act, 1981 (hereinafter called and referred to as, “the Act”). The said certificate originally was granted on 16.3.1983. Indisputably, it was renewed from time to time; it covered the period in question, namely, 2001-02, having been renewed till 31.5.2004.

Indisputably, in terms of the provisions of the Act and the rules framed thereunder, a dealer is required to show the list of goods which were taxable at 1% as also the list of those goods which were taxable at 3%. Oxygen was shown in the list of goods taxable at 3% as specified in Annexure ‘B’ appended to the registration certificate.

4. We may at this stage notice the relevant statutory provisions, namely, Sections 13(1)(b), 14 (2) and 54 of the Act, which read as under:

“13. Special rate of tax on certain sales or purchases.- (1) Notwithstanding anything contained in this part but subject to such conditions and restrictions as may be prescribed.

(a) ...

(b) Sales to or purchases by a registered dealer of goods required by him directly for use in the manufacture or processing of any goods for sale.

14. Registration of dealers. (1) ...

(2) Every dealer required by sub-section (1) to be in possession of a registration certificate shall apply for the same in the prescribed manner to the prescribed authority, and the said authority shall, on being satisfied that the application is in order, register the applicant and grant him a registration certificate within prescribed time in the prescribed manner and in the prescribed form specifying therein the goods or class or description of goods which the dealer sells or purchase and such other particulars as may be prescribed.

Provided that no application referred to in this sub-section shall be considered and be deemed valid, unless the applicant furnishes correctly all the prescribed particulars and, such other particulars as may be required by the prescribed authority in this behalf;

Provided further that where a dealer required by sub-section (1) to be in possession of a registration certificate applies for such a certificate within the prescribed time-limit and in the prescribed manner and the application is otherwise valid in accordance with the first proviso of this sub-section, he shall be deemed to be in possession of a valid registration certificate from the date he so applied for the purposes of exercising all the rights and performing all the duties and bearing all the liabilities under this partand the rules made thereunder:

Provided also that where a dealer carries on any business of sale or purchase of goods, in violation of the express and specific provisions of any law of the State or the Union, then notwithstanding anything to the contrary contained in this part and without prejudice to his liability to pay tax, the prescribed authority shall refuse to grant him a registration certificate.

54. Furnishing of information by dealers.-If any dealer liable to pay tax under this part-

(a) disposes of his business or any part of his business, whether by sale or otherwise, or

(b) acquires any business or part of any business, whether by purchase or otherwise, or

(d) discontinues his business or shifts his place o

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2009 Supreme(SC) 443

IMPORTANT POINT If an assessee is held to be a person aggrieved to question the validity of the demand raised on it, it will have the locus standi to maintain a writ petition.

Cases Referred (9)

IMPORTANT POINT
If an assessee is held to be a person aggrieved to question the validity of the demand raised on it, it will have the locus standi to maintain a writ petition.