TaxTMI 
TaxTMI 
1994 (8) TMI 248
X X X X Extracts X X X X
X X X X Extracts X X X X
....al Sales Tax Act, 1956 (hereinafter referred to as "the Act"). The respondent stated that he missed to claim the adjustment of sales tax paid on the purchase of raw materials in the returns filed for the months of July and August, 1990. The admitted tax due thereon was paid. In terms of section 15(b) of the Act, the respondent was entitled to a refund of sales tax paid under the Finance Act. While filing the return for the month of September, 1990, the respondent did not pay the admitted tax of Rs. 1,96,072 but claimed refund of Rs. 5,22,728 which would be adjusted towards the admitted tax of Rs. 1,96,072 and the balance of Rs. 3,26,656 was to be refunded on account of Bihar sales tax paid on the direct raw materials purchased for the months of July, August and September, 1990. The application for refund was considered by the Assistant Commissioner and the same was dismissed since the claim for refund was against law. By order dated November 8, 1990, a penalty of Rs. 9,852.85 was imposed. Against this order, respondent preferred C.W.J.C. No. 7549 of 1990. Thereafter the respondent filed an application of refund for Rs. 19,22,340.12 for the period 1985-86 and Rs. 17,65,987.01 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ke in all forms and section 14(iv) iron and steel, "that is to say". Because of this peculiar phraseology "that is to say", the ruling of Pyare Lal case [1976] 37 STC 319 (SC); AIR 1976 SC 800 came to be so laid down but here, there is no such difficulty, having regard to the nature of the entry. The same principle came to be adopted with regard to "oil-seeds" in Sait Rikhaji Furtarnal v. State of Andhra Pradesh [1992] 85 STC 1 (SC); [1991] Supp 1 SCC 202. As a matter of fact, India Carbon Ltd. v. Superintendent of Taxes, Gauhati [1971] 28 STC 603 (SC); AIR 1972 SC 154 fully supports the stand of the respondents. The High Court was justified in relying on this ruling. This decision also refers to Pyare Lal's ruling [1976] 37 STC 319 (SC); AIR 1976 SC 800. Further, in State of Tamil Nadu v. Mahi Traders [1989] 73 STC 228 (SC) [1989] 1 SCC 724 in relation to hides and skins, at page 734 the test of different commercial commodities has been categorically rejected. In order to appreciate this controversy, we will now refer to the relevant provisions of the Act. Section 14 of the Act catalogues certain goods of special importance in inter-State trade or commerce. They are co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ate tax in the State was again put to a process of manufacture, it loses its original identity and emerges as another form of finished product though still remaining a declared goods. To cite an example, case of steel scrap or billets rolled into different kinds of steel materials may be taken. When these are purchased as raw materials within a State after being subjected to State tax at 4 per cent being declared goods and are then rolled into rods, channels, wire, etc., they become different commercial commodity though still remaining declared goods as defined under section 14 of the Central Sales Tax Act. In the instant case, the raw petroleum coke, a declared goods is put to the process of production by the dealer in his factory called Universal Hydrocarbons Co. Pvt. Ltd.. and another commercial commodity, namely, calcined petroleum coke, again a declared goods in terms of section 14(ia) is produced. Therefore, the original identity of raw petroleum coke is lost and then calcined petroleum coke is the outcome of the process of manufacture." In supporting the reasoning, reliance is placed on Pyare Lal's case [1976] 37 STC 319 (SC); AIR 1976 SC 800. The ultimate finding given b....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... STC 603; AIR 1972 SC 154 that petroleum coke is one form of coal governed by the expression "coal" within section 14(ia). The relevant extract of the judgment is as under: "It is not disputed that if petroleum coke is covered by clause (i) of section 14 which reads 'coal including coke in all its forms' the State was not competent to levy tax at a rate exceeding the one given in section 15(a) of the Central Act. ......................... The High Court was of the view that the word 'coal' includes coke in all its forms in clause (i) of section 14 of the Central Act and must be taken to mean coke derived from coal. In other words it must be coke which had been derived or acquired from coal by following the usual process of heating or burning. The contention, therefore, of the appellant was negatived that petroleum coke was covered by the aforesaid provision of the Central Act." This decision fully supports the respondent. The fact that calcined petroleum coke is a different commodity is of little consequence. In interpreting the scope of hides and skins which fall under section 14(iii) of the Act, this Court in Mahi Traders case [1989] 73 STC 228; [1989] 1 SCC 724 held ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her goods to be taxed have been subjected to a manufacturing process so as to produce a new marketable commodity, is the decisive test in determining whether an excise duty is leviable or not on certain goods. No doubt, in the law, dealing with the sales tax, the taxable event is the sale and not the manufacture of goods. Nevertheless, if the question is whether a new commercial commodity has come into existence or not, so that its sale is a new taxable event, in the sales tax law, it may also become necessary to consider whether a manufacturing process, which has altered the identity of the commercial commodity, has taken place. The law of sales tax is also concerned with 'goods' of various descriptions. It, therefore, becomes necessary to determine when they ceased to be goods of one taxable description and become those of a commercially different category and description. It appears to us that the position has been simplified by the amendment of the law, as indicated above, so that each of the categories falling under 'iron and steel' constitutes a new species of commercial commodity more clearly now. It follows that when one commercial commodity is transformed into anothe....