Locus standi in tax demand challenges and disputed raw material status require evidence before concessional tax treatment is decided.

A dealer directly subjected to a tax demand is a person aggrieved and may challenge that demand, even if the tax incidence may ultimately be passed on to another party. The Court held that the selling dealer had locus standi to maintain the writ petition. On the concessional rate issue, the Court recognised that "raw material" may include inputs consumed in manufacture if essential to the process, but it found the role of oxygen gas in steel production was not established on the existing record. Because the issue turned on disputed facts, it had to be determined by the assessing authority on evidence, and the matter was remitted accordingly.

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Issues: (i) whether the selling dealer had locus standi to challenge the demand raised against it under the taxing statute; (ii) whether oxygen gas used in steel manufacture could be treated as raw material for claiming the concessional rate of tax, and whether that question required factual determination by the assessing authority.

Issue (i): whether the selling dealer had locus standi to challenge the demand raised against it under the taxing statute.

Analysis: The demand was made directly on the selling dealer, and non-payment could expose it to recovery and penal consequences. A person against whom a tax demand is raised is a person aggrieved if the demand may practically injure it, even if the ultimate incidence of tax may be passed on to another dealer.

Conclusion: The selling dealer had locus standi to maintain the writ petition.

Issue (ii): whether oxygen gas used in steel manufacture could be treated as raw material for claiming the concessional rate of tax, and whether that question required factual determination by the assessing authority.

Analysis: The expression "raw material" was not defined and had to be understood in common parlance. Prior decisions recognised that even inputs consumed or burnt up in the manufacturing process may still qualify as raw material if they are essential to the process. However, the Court held that the nature of oxygen gas in the steel-making process was not established on the existing record, and the question involved disputed facts requiring evidence before the assessing authority.

Conclusion: The question whether oxygen gas was raw material could not be finally determined on the writ record and had to be examined by the assessing authority on evidence.

Final Conclusion: The impugned judgment was set aside, the demand was quashed, and the matter was remitted for factual determination on the nature of oxygen gas and the applicable tax treatment after affording both sides an opportunity to adduce evidence.

Ratio Decidendi: A dealer against whom a tax demand is raised is a person aggrieved and may challenge it, but entitlement to a concessional tax rate based on use of goods as raw material must be supported by evidence where the relevant factual issue is disputed.

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