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2014 Supreme(SC) 1095
SUPREME COURT OF INDIA
Sharad Arvind Bobde, H.L. Dattu, Dipak Misra, JJ.
M/s. Steel India - Appellant
Vs.
State of Jharkhand & Others - Respondents
C.A. No. 4024 of 2004
Decided On : 09-01-2014
Headnote:
Bihar Finance Act, 1981 – Section 7 – Tribunal - Sales Tax – Evidence - whereby the State Government has granted exemption from payment of sales tax on purchase of raw materials used directly in manufacture of goods exemption granted aforesaid Notification different categories of industries including iron and steel industry exemption said Notification is available for a from the date of commencement of the commercial production – Held, Though said report was available before the Deputy Commissioner of Commercial Taxes when he passed fresh order pursuant to remand order passed by the Joint Commissioner of Commissioner Taxes but still had come to the conclusion that though Appellant purchased raw material such as steel scraps and produced agriculture and household articles no new commodity comes into existence - This view of Deputy Commissioner of Commercial Taxes is not correct for the reason that definition of Manufacture that finds a place in Act is wide enough to cover production making extracting, altering, ornamenting, finishing or otherwise processing of the raw material - In instant case we have noticed that raw material that is purchased by the Appellant is a steel scrap and what is produced with the steel scrap are agricultural implements and household articles -Therefore activity of the Appellant would certainly into definition of Manufacture to qualify for grant of exemption under the notification - At this stage we refer to certain observations made in this Court in the case of This Court has stated as - Appellants treat iron and steel scrap of considerable bulk by cutting down by mechanical processes into pieces that may be conveniently in rolling mills and foundries - Such treatment making saleable goods would in our opinion would fall within the wide definition of "Manufacture said Act - Ordered accordingly
JUDGMENT :
1. This appeal is directed against the judgment and order passed by the High Court of Judicature of Jharkhand at Ranchi in Writ Petition No. 4646 of 2002, dated 08.01.2003. By the impugned judgment and order, the High Court has confirmed the orders passed by the Commissioner of Commercial Taxes, Jharkhand in Revision Case No. CC(S) 388 of 2001. The State of Bihar has introduced Industrial Incentive Policy, 1993, where a provision is made to grant sales tax exemption on purchase of raw materials for certain industries enumerated in Annexure V(2) of the said policy on the condition, that, the raw materials re directly used for manufacturing finished goods. One of the units mentioned in Annexure V. is iron and steel based industry.
2. Pursuant to the aforesaid industrial policy, the State Government in exercise of its powers u/s 7(3)(b) of the Bihar Finance Act, 1981 (for short 'the Act') has issued Notification No. 1995 dated 04.04.1994, whereby the State Government has granted exemption from payment of sales tax on purchase of raw materials used directly in the manufacture of goods. The exemption granted under the aforesaid Notification is for 46 different categories of industries including iron and steel industry. The exemption under the said Notification is available for a period of 7 years from the date of commencement of the commercial production.
3. To avail the benefit under the aforesaid Notification, the Appellant-industry had approached the Deputy Commissioner of Commercial Taxes, Dhanbad Circle, Dhanbad for the grant of exemption inter alia for three commodities (1) pencil ingots, (2) sheets (3) agricultural and household implements. The aforesaid Commissioner after considering the application so filed by the Appellant had issued a certificate in form B-l, dated 30.04.1997. In the said certificate it is clearly stated that the raw materials that are exempted from sales tax are "all types of iron and steel material (including defective cutting and rejects)."
4. The Joint Commissioner of Commercial faxes being of the opinion that the Deputy Commissioner of Commercial Taxes was not justified in granting the exemption certificate dated 30.04.1997, had initiated suo moto proceedings under the Act, by issuing a show cause notice to the Appellant, inter alia, directing the Appellant to show cause as to why the certificate issued by the Deputy Commissioner of Commercial Taxes should not be revoked.
5. After receipt of the reply by the Appellant, the Joint Commissioner of Commercial Taxes (Admn.) by his order dated 15.04.1998 had remanded the matter back to the Deputy Commissioner of Commercial Taxes with a direction to hold a fresh enquiry and pass appropriate orders in the light of certain observations made by him in the course of the order.
6. Aggrieved by the remand order so passed by the Joint Commissioner of Commercial Taxes, the Appellant had approached the High Court of Patna, Ranchi in Writ Petition No. 1887 of 1998. The Writ Court after considering the material on record has come to the conclusion that the Joint Commissioner of Commissioner Taxes (Admn.) has not committed any error whatsoever which would call for interference under Article 226 and 227 of the Constitution of India. Thereafter the Appellant had filed the review petition before the High Court which was also dismissed.
7. Against the orders passed by the Writ Court the Appellant had approached this Court by way of the special leave petition. This Court also dismissed the aforesaid special leave petition.
8. In the interregnum the Commercial Tax officer, Dhanbad had inspected the business premises of the Appellant industry and had furnished his report to the Deputy Commissioner of Commercial Taxes, Dhanbad.
9. After receipt of the aforesaid report and after considering the case pleaded by the Appellant, the Deputy Commissioner of Commercial Taxes has come to the conclusion that the Appellant did not manufacture any article from the raw materials and the
