THE PROCESS OF MINING MICA INVOLVES THE PRODUCTION OR MANUFACTURE OF GOODS WITHIN THE MEANING OF SEC.2(G) OF THE BIHAR SALES TAX ACT, 1947 AS AMENDED BY BIHAR ACT VI OF 1949.

Ramaswami, J.

1. The assessee is a dealer in mica, having its place of business at Domchanch in the district of Hazaribagh. For the four quarters of the year 1948-49, the assessee submitted returns and its books of accounts were examined by the Sales Tax Officer, Hazaribagh. The returns of the assessee were not accepted as correct and the Sales Tax Officer made an assessment to the best of his Judgment under. Sec.13(4) of the Bihar Sales Tax Act. The assessee preferred appeals before the Commissioner of Sales-Tax, but these appeals were dismissed. The assesses then took the matter in revision to the Board of Revenue.

2. The ground taken by the assessee was that the process of mining mica cannot be said to be a process of production or manufacture within the meaning of Sec.2 (g) of Act VI of 1949, This contention was accepted by the Board of Revenue and the assessment of sales tax made upon the assessee for all the four quarters was set aside. In the course of its order the Board of Revenue said:,.

"As regards the position of split mica it has to be remembered that there is practically no markets for crude mica. All the mica that is exported is split mica so that the conclusion is irresistible that the splitting of mica is an essential process for making the commodity marketable. On the due consideration of the matter, I am of opinion that the splitting of, mica does not constitute a process of manufacture, the constitution of the mica remaining just the same, there being only a change in the dimension, particularly, in thickness, of individual pieces. As mining of mica cannot be regarded as a process of manufacture, I may mention that the despatch of split mica outside Bihar cannot be taxed under Sec.2(g) of the amended Act.

Thereafter the Commissioner of Sales Tax filed an application under Sec.25 (1) of the Act on behalf of the State of Bihar for making a reference to the High Court on the question of law involved. Accordingly, the Board of Revenue has stated a case on the following question of law for the opinion of the High Court.:

"Whether on the facts and circumstances of the case the process of mining mica involves the production or manufacture of goods within the meaning of Section 2 (g) of the Bihar Sales Tax Act, 1947 , as amended by Bihar Act VI of 1949."

3. It is admitted -by the learned Government Advocate that for the two quarters covering 1st of April, 1948, to the 30th of September, 1948, the assessee was not liable to be taxed since the amendment of Sec.2(g) made by the Bihar Act VI of 1949 came into effect only on the 1st of October, 1948. There is hence no dispute between the parties so far as the first two quarters of 1948-49 are concerned and it is necessary, therefore, to reframe the question in the following manner so as to bring out the real point in controversy between the parties:-

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"Whether the assessee has been rightly taxed under the newly added proviso to Sec.2(g) of the Bihar Sales Tax Act for the two quarters from the 1st of October, 1948, to the 31st of March, 1949."

4. On behalf of the assessee Mr. Dutt raised a preliminary objection that the reference made by the Board of Revenue under Sec.25(1) was not competent since the application was made not by the Commissioner but by the State of Bihar. It was argued that the jurisdiction of the Board of Revenue to state a case under Sec.25(1) was dependant upon a proper application made by the Commissioner of Sales Tax. It was contended that the preliminary conditions mentioned in Sec.25(1) was the essential foundation of the jurisdiction of the Board of Revenue to make a reference; and unless those preliminary conditions were complied with, the reference made by the Board of Revenue was not legally competent.

In support of this argument Mr. Dutt referred to a decision of a Bench of this Court, State of Bihar V/s. Messrs. Arthur Butler, & Co. Ltd., Misc. J. C. No. 574 of 1953 D/- 24-4-1956: (AIR 1957 Pat 182) (A). I am, however, unable to acc