K.K. TATED, J.

Heard the learned counsel for the rival parties.

These three references, at the instance of the applicants, are made by the Maharashtra Sales Tax Tribunal, Mumbai ("the Tribunal", for short) under section 61(1) of the Bombay Sales Tax Act, 1959 ("the BST Act, 1959", for short) for the opinion of this court on the following substantial questions of law :

(i) Whether, on the facts and evidence on record the Tribunal was justified in law in rejecting the contention of the applicants that the steam was a chemical and hence, sales thereof were exigible to sales tax at four per cent only ?

(ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in throwing the burden on the applicants to prove that the steam was a chemical as understood in common parlance and thereby, confirming the levy of sales tax on its sales at 10 per cent ?

All these references give rise to the common issues between common parties based on identical set of facts including the period of assessment, as such they were heard together, so a single judgment will dispose of these references.

The facts :

The material facts briefly are stated as follows :

The applicant is a manufacturer of sulphuric acid and other chemicals and products. During the process of such manufacturing activity, the steam is generated which is being sold by the applicant as a by-product on which the applicant collected the tax at four per cent on the footing that the steam was a chemical.

The applicant states that, the steam is chemical under the BST Act, 1959, thus, taxable at four per cent under the notification entry No. 233 issued under section 41 of the BST Act, 1959 during the material time; whereas the assessing authority held that the steam was covered by entry No. 102 of the Schedule C, Part II, as such, not classifiable as chemical. The contentions of the applicant were not accepted by the assessing authority while assessing the applicant for the period January 1, 1988 to March 31, 1989, April 1, 1989 to March 31, 1990 and April 1, 1990 to March 31, 1991 under the BST Act, 1959 and held that the steam was covered by Schedule II, Part C, entry 102, exigible to tax at 10 per cent.

Against the aforesaid assessment orders, the applicants preferred the appeals under section 57 of the BST Act, 1959 before the Deputy Commissioner of Sales Tax. However, those appeals were dismissed.

Being aggrieved by the dismissal of appeals, the applicant preferred the second appeals before the Maharashtra Sales Tax Tribunal, Mumbai. Those appeals were partly allowed by the Tribunal holding that the steam is not chemical for the purpose of notification, entry No. 233 and levy of tax under Schedule C, Part II, entry No. 102 at the rate of 10 per cent is proper; However, the Tribunal was pleased to grant some relief to the applicant by reducing the interest under section 36(3)(b) of the BST Act, 1959.

Being aggrieved by the aforesaid orders of the Tribunal, the applicant - assessee preferred the reference applications under section 61(1) of the BST Act, 1959. The Tribunal referred the abovementioned questions of law for the opinion of this court.

The issue :

In the present case the core issue is about classification of the steam. Whether the steam can be said to be covered by notification entry No. 233 issued under section 41 of the BST Act, 1959 during the material time or under Schedule C, Part II, entry No. 102. If the steam is considered under notification entry No. 233, then the sales tax leviable is at four per cent, whereas if it is considered falling under Schedule C, Part II, entry No. 102, then the same is taxable at 10 per cent. Both the entries are reproduced hereinbelow for immediate reference :

NOTIFICATION ENTRY No. 233

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