TaxTMI 
TaxTMI 
2009 (3) TMI 539
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....dia Ltd. (BOC), the producer and supplier, for industrial and medical use. BOC began supply of oxygen gas to TISCO from the year 1993. Indisputably, TISCO applied for and was granted a registration certificate in terms of the provisions of section 13(1)(b) of the Bihar Finance Act, 1981 (hereinafter called and referred to as "the Act"). The said certificate originally was granted on March 16, 1983. Indisputably, it was renewed from time to time; it covered the period in question, namely, 2001-02, having been renewed till May 31, 2004. Indisputably, in terms of the provisions of the Act and the Rules framed thereunder, a dealer is required to show the list of goods which were taxable at one per cent as also the list of those goods which were taxable at three per cent. Oxygen was shown in the list of goods taxable at three per cent as specified in annexure B appended to the registration certificate. We may at this stage notice the relevant statutory provisions, namely, sections 13(1)(b), 14(2) and 54 of the Act, which read as under: "13. Special rate of tax on certain sales or purchases.-(1) Notwithstanding anything contained in this Part but subject to such conditions and restric....
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....ace of business, or (e) changes the name, style or nature of his business or effects any change in the class or description of goods which he sells, or (f) starts a new business or joins another business either singly or jointly with other persons, or (g) effects any change in the particulars furnished in an application made under section 14 or declaration furnished under section 15, he shall, within seven days of the occurring of any of the events aforesaid inform the prescribed authority accordingly, and, if any such dealer dies without doing so, his executor, administrator, successor-in-interest or legal representative, as the case may be, shall within fifteen days of the dealer's death, inform the said authority accordingly." The State in exercise of its rule-making power made Rules known as the Bihar Sales Tax Rules, 1983. Rules 3(9), 6(1)(b), 6(4) thereof read as under: "3. (9)(a) Every dealer to whom the provisions of section 54 apply shall inform, in writing, the appropriate authority prescribed in sub-rule (3) about the complete details necessitating action under section 54. (b) Where the information furnished by a dealer under section 54 or otherwise received....
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....of certificate is to be filed in form III wherein, inter alia, particulars of the goods which the dealer may be permitted to purchase at special rate of tax in terms of clause (b) or c) of sub-section (1) of section 13 of the Act are required to be shown. A registration certificate is granted in terms of form VIB. Clause (3) whereof reads as under: "(3) Particulars of the goods which the holder of the certificate is permitted to purchase at special rate of tax, under clause (b) or (c) of sub-section (1) of section 13 - Description of goods. Particular purpose for which required 1 2" Indisputably, the State from time to time issued several notifications, one of such notifications being dated December 15, 1976 in terms whereof tax at the rate of three per centum was prescribed in respect of the goods required directly for use in manufacture. However, by reason of S.O. No. 604 dated April 12, 1982, the rate of sales tax on industrial raw materials (inputs) payable under section 13(1)(b) of the Act was fixed at one per centum. By a Notification being S. O. No. 1096 dated September 9, 1983, it was provided: "S.O. 1096 dated the September 9, 1983. - In e....
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....for imposition of penalty will be initiated against you under section 16(9) of the Bihar Finance Act, 1981 as adopted by Jharkhand." Another notice dated June 29, 2005 was also issued, stating: "In spite of informing you by this office's letter No. 188 dated April 20, 2005 the balance amount of Rs. 1,02,45,572 being admitted tax has not been deposited by you till date. Again, you are directed to produce the evidence before the undersigned of deposit of the balance admitted tax of Rs. 1,02,45,572 by July 15, 2005, otherwise the proceedings for imposition of penalty will be initiated against you under section 16(9) of the Bihar Finance Act, 1981 as adopted by Jharkhand." BOC in its letter dated July 15, 2005, addressed to the Deputy Commissioner, Commercial Taxes, Jamshedpur Circle, Jamshedpur, stated: "After receiving the said letter/notice dated June 29, 2005, we had taken up the matter with Tata Steel, i.e., our purchaser who is the registered dealer for purchasing of the said industrial gases including oxygen. It has been informed by Tata Steel that the Tata Steel is using those industrial gases including oxygen as their raw material for manufacturing of steel products and i....
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....t oxygen gas was used by it as a raw material. It was furthermore held: "As per the registration certificate issued under section 13(1)(b) of the Act, oxygen gas was treated as goods as mentioned in annexure B. Endorsing the same, the purchasing dealer has been paying the tax at the concessional rate of three per cent for a long number of years treating oxygen gas as goods. The selling dealer is bound by the said certificate. Accordingly, he has been collecting sales tax at three per cent from the beginning till 2000 and thereafter he started collecting sales tax at two per cent treating the same as raw material. Neither the purchasing dealer, nor the selling dealer can decide the nature of the goods on their own, unless the certificate is modified by the prescribed authority to that effect, treating oxygen gas as raw material, on being approached by the purchasing dealer. The purchasing dealer has to pay sales tax at three per cent treating oxygen gas as goods mentioned in annexure B and the selling dealer has to merely collect and deposit the same as per the certificate with the Government. Unless it is established before the prescribed authority, which, in turn, will decide th....
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....ontend: (i) The procedure for claiming special rate of tax on all materials and/ or on raw materials having been provided for in the Act and/or Rules framed thereunder, the same were required to be complied with by the assessee for claiming the benefit thereof. (ii) TISCO which is a consumer of oxygen gas having never raised any contention that the rate of tax in respect of oxygen would be two per cent and not three per cent, BOC cannot be said to have any locus standi to plead the case of TISCO as ultimately the liability would be that of the latter. (iii) The procedure laid down in the Act as also the Rules framed thereunder being mandatory in nature, it was obligatory on the part of the TISCO to comply with requirements of the provisions thereof scrupulously. (iv) TISCO having not challenged the demand made by the authorities by way of a writ petition, the special leave petition filed by it is not maintainable. We may, at the outset, place on record that since Mr. B.B. Singh conceded that the decision of this court in Tata Iron & Steel Co. Ltd. v. State of Jharkhand [2005] 4 SCC 272 See [2005] 140 STC 284 (SC). has no application to the issues involved herein, we are not ca....
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....ical sense, and not merely in a fantastic view." (See Kabushiki Kaisha Toshiba v. Tosiba Appliances Co. [2008] 8 SCALE 354) If it is to be held that the assessee is a person aggrieved to question the validity of the demand raised on it, it will have the locus standi to maintain a writ petition. The expression "raw material" is not defined. It has to be given its meaning as is understood in the common parlance of those who deal with the matter. Oxygen gas when used would admittedly be burnt up. Would it mean that it ceases to be a raw material is the question. In Collector of Central Excise, New Delhi v. Ballarpur Industries Ltd. [1989] 4 SCC 566 See [1990] 77 STC 282 (SC). on which reliance has been placed upon, Venkatachaliah J. (as his Lordship then was) speaking for the Bench was considering a case where the input of sodium sulphate in the manufacture of paper was held to continue to be a "raw material" by reason of the fact that in the course of the chemical reactions this ingredient is consumed and burnt up, holding: "14 See para 5 page 289 of [1990] 77 STC.. . . . The ingredients, used in the chemical technology of manufacture of any end-product might comprise, amongst ....
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....in the notification. The word 'raw material' has not been defined in the Act. It has, therefore, to be understood in the ordinary and well accepted connotation of it in the common parlance of the persons who deal with it. According to dictionary, it means 'something which is used for manufacturing or producing the goods'. The ordinary common sense understanding of it is that it is something from which another new or distinct commodity can be produced. . ." Mr. B.B. Singh, however, rightly pointed out that the question as to whether the oxygen gas is a raw material or not had not been raised before the assessing authority. For the first time, before this court, a question of fact has been raised. We cannot, for arriving at such a finding as to whether the same is correct or not, rely on Wikipedia alone, on which reliance has been placed. [See Commissioner of Customs, Bangalore v. ACER India (P) Ltd. [2008] 1 SCC 382 See [2007] 10 RC 11 (SC). and Ponds India Ltd. (Merged With H.L. Ltd.) v. Commissioner of Trade Tax, Lucknow [2008] 8 SCC 369 See [2008] 15 VST 256 (SC).] We do not know what are the manufacturing processes involved and what role oxygen gas has to play in the matter of....