( 1. ) BY this petition under Article 226 of the Constitution of India, the petitioner seeks to challenge correctness, validity and propriety of the order dated 02. 05. 2008 passed by the Commissioner, Commercial Tax, Madhya Pradesh, Indore under section 70 of Madhya Pradesh Value Added Tax Act, 2002, (herein after referred to as "the Act" for short) wherein he has held that Emulsified Bitumen would not fall under Entry No. 16 of Schedule II Part 2 appended to the Act.

( 2. ) THE petitioners, who are manufacturer of emulsified Bitumen, being aggrieved by the recovery of the VAT @ 12. 5% made an application to the commissioner of Commercial Tax, Madhya Pradesh, Indore that emulsified bitumen falls under the Entry 16 Part 2 Schedule II commonly known as "bitumen and Coal Tar", and as such, the product manufactured by the petitioners should also be taxed at rate of 4% and not @ 12. 5%.

( 3. ) AFTER hearing the parties, learned Commissioner came to the conclusion that Bitumen and Coal Tar are different then Emulsified Bitumen, and therefore, the same would not fall under Entry No. 16 of Schedule II Part 2, but would fall under residuary entry.

( 4. ) SHRI Choudhary, learned counsel for the petitioner, after taking us through a number of decisions and the research work, submitted that Emulsified Bitumen, i being a part or product of Bitumen itself, cannot be classified under residuary entry. It is submitted by him that use of Bitumen and Emulsified Bitumen is the same and as Emulsified Bitumen is made out of or is a product of Bitumen with no physical or chemical changes in it, the authority was not justified in holding that emulsified Bitumen would not fall under Entry No. 16.

( 5. ) SHRI Kutumbale, learned counsel for the State, on the other hand, submitted that Bitumen and Emulsified Bitumen are commercially different articles, though bitumen when is mixed with emulsifier then only it starts absorbing water and is used for laying of road. The authority was justified in holding that Emulsified bitumen would not fall under Entry No. 16.

( 6. ) UNDISPUTEDLY, Bitumen is a byproduct of the petroleum. It also cannot be disputed before us that Bitumen in its original form is a solid lump, which can be used for laying road or for any other purpose, after it is heated to 150c. Undisputedly, even from the research work on which reliance is placed, it would clearly appear that when the Bitumen is heated between 150c and 180c at which stage, it can be mixed with other road component, such as mineral aggregate, in a method known as the application of a hot mix. Working with Bitumen at these temperatures is very dangerous, with a risk of serious burns. It also requires costly equipment for the heating, storage and application of Bitumen, which must be performed on site. Bitumen that has been mixed with petroleum solvents is called cut-back Bitumen. The solvents, usually kerosene, play no part in the function of the binder and are costly. The solvents act to decrease the viscosity of the bitumen making it more workable. From the research work, it would clearly appear that the Bitumen is converted into Bitumen Emulsified with the help and assistance of emulsifier and a new product comes into existence.

( 7. ) IN the matter of Chowgule and Company Private Limited Vs. Union of India and others [1981] 47 STC 124, the Supreme Court has held that: "the test that is required to be applied is: does the processing of the original commodity bring into existence a commercially different and distinct commodity?"

( 8. ) IN the matter of State of Orissa Vs. Titaghur Paper Mills Company Limited [1985] 60 STC 213, the Supreme Court observed:

"timber and sized and dressed logs are one and the same commercial commodity. Logs are noting more than wood cut up or sawn and would be timber. Planks beams and rafters would also be timber. "

( 9. ) WE are referring to these two judgments to make the tilings easy that basic question for application of very Entry would be