AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2008 (2) TMI 830
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....ssors, earth-moving machineries, turbine generators, transformers, switch gears and laboratory equipments". After the aforesaid certificate was granted to the petitioner, six months thereafter on September 25, 1987 the word "construction" was deleted by the Sales Tax Officer even though the petitioner-company has never made any prayer for such deletion nor any opportunity of hearing was afforded to the petitioner-company before such deletion was made effective. In this regard it is further averred that being aggrieved by deletion of the word "construction" from the registration certificate, the petitioner-company filed a petition before the Commissioner of Sales Tax for permission to avail sales tax concession on construction materials, but the said petition has not been disposed of and is still kept pending. It is further averred by the petitioner-company that by a subsequent amendment dated October 31, 1988 the following items namely, "all machineries and equipment associated with operation and maintenance of a large thermal power including pumps, compressors, earth-moving machines, turbines, generators, transformers, switch and switch gear" were also deleted. It is submitted ....
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....ought for inclusion of the following items in its registration certificate and the reasons for their inclusion are noted hereunder: PRELIMINARY AND CIVIL WORKS (1) Survey and drawing instruments like the adulates, levels, leveling stands, chains, measuring chains, measuring tapes, optional square, etc. For taking level for laying the foundation of the power house building of associated structures. (2) Building materials like - cement, steel, structural steel, chips, sand, doors and windows, paints, roofing materials, distemper, fencing materials like barbed wires, sati pillars, etc. These materials are required for construction of power house building and other associated civil works. (3) H.S. meters, G.I. pipes, C.I. pipes, street-light fittings, refrigerators, water callers, heaters, burners, cooking ranges, cookeries, etc., beds, cots, chairs, tables, dressing tables, washing and cleaning machines, coir mats, dressing, dining and conference room materials. These materials are required for construction of power house, guest house and central room required for operation and maintenance. (4) Road materials like chips, tars, road rollers, concrete mixer and v....
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....o evacuate generated power (f) Cables trays, conduits and other accessories, unit control board with synobronising bracket, station control board, 400 KV switchyard control board excluding line protection 220MW 132 KV control and relay panels, marshalling kiosks for 132 KV, 220 MW and 400 KV bus protection, diesel generator set, switchyard equipment=generator bay bus coupler bay, bus transfer bay, line bay, 132 KV switchyard equipment, transformer bay and line bay, bus coupler bay, 33 KV transformer bay lighting branch board, lighting distribution boards, distribution feeders pillars, 4 way welding branch board. A. C emergency lighting distribution board, AC/DC emergency lighting board, 6/DC emergency lighting distribution board, lighting fixtures with fittings, cables, receptacles, high bay lighting towers, poles plant communication system including 100 line telephone exchange, telex facilities, electronic package unit, wireless sets, secondary digital clock, electronic clocks, mini equipment rack, cables, conduits/conduit fittings, coal handling plant, ash handling system, F.O. facilities, auxiliary cooling water system, fire fighting, grounding and lighting protection, electr....
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....of use Remarks 1. Survey and drawing instruments like the adulates, levels, leveling stands, chains, measuring chains, measuring tapes, optional square, etc. For taking level for laying the foundation of the power house building of associated structures. Not allowed 2. Building materials like cement, steel, structural steel, chips, sand, doors and windows, paints, roofing materials, distemper, fencing materials like barbed wires, sati pillars, etc. These materials are required for construction of power house building and other associated civil works. Not allowed 3. H.S. meters, G.I. pipes, C.I. pipes, street-light fittings, refrigerators, water callers, heaters, burners, cooking ranges, cookeries, etc., beds, cots, chairs, tables dressing tables, washing and cleaning machines, coir mats, dressing, dining and conference room materials. These materials are required for construction of power house, guest house and central room required for operation and maintenance. Not allowed 4. Road materials like chips, tars, road rollers, concrete mixer and vibrator, manure, gardening tools and associated materials, water treatment plants, filtrations ....
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....les, 1.1 KV cables = single core and multi core, screened cables for turbovisory instrument. To evacuate generated power. Allowed but not incorporated. 5(f) Cables trays, conduits and other accessories, unit control board with synobronising bracket, station control board, 400 KV switchyard control board excluding line protection 220 MW and 132 KV control and relay panels, marshalling kiosks for 132 KV, 220 MW and 400 KV bus protection, diesel generator set, switchyard equipment=generator bay bus coupler bay, bus transfer bay, line bay, 132 KV switchyard equipment, transformer bay and line bay, bus coupler bay, 33KV transformer bay lighting branch board, lighting distribution boards, distribution feeders pillars, 4-way welding branch board. A. C. Emergency lighting distribution board, AC/DC emergency lighting board, 6/DC emergency lighting distribution board, lighting fixtures with fittings, cables, receptacles, high bay lighting towers, poles plant communication system including 100-line telephone exchange, telex facilities, electronic package unit, wireless sets, secondary digital clock, electronic clocks, mini equipment rack, cables, conduits/conduit fittings coal han....
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....ry and electrical goods. It is further held that raincoats could be purchased at concessional rate of tax so far as they were necessary for use of the linesmen working on transmission lines during the rainy season and winter and similarly battery cells to the extent they were necessary for use by linesmen for working on transmission lines during the night. Mr. Das further submitted that in the facts of the present case whereas initially the Sales Tax Department had granted registration certificate under section 7(2) of the CST Act to the petitioner on March 17, 1987 including all machineries and equipments associated with construction, operation and maintenance of a large thermal power station, pumps, compressors, earth-moving machineries, turbine generators, transformers switch gears and laboratory equipments, yet without there being any application on the part of the petitioner and without complying with the rule of natural justice, the original certificate was amended initially by deleting the word "construction" on September 25, 1987 and thereafter by deleting all other items as mentioned hereinabove by subsequent amendment by the Sales Tax Officer once again suo motu on Aug....
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....e Court in the case of Commercial Taxes Officer, Circle-D, Jaipur [1997] 104 STC 89 is of no consequence since their Lordships of the apex court had placed reliance on the earlier judgment of the honourable Supreme Court in the case of J. K. Cotton Spinning & Weaving Mills Co. Ltd. v. Sales Tax Officer, Kanpur [1965] 16 STC 563, and the principles evolved therein have been scrupulously followed by the Revenue in effecting deletion and/or refusing inclusion of certain items in the petitioner's registration certificate. Learned counsel further submits that it is not a fact that the petitioner's revision petition dated November 4, 1987 against the original order of deletion dated September 25, 1987 is any longer pending consideration. In paragraph 12 of the counter-affidavit it is averred that the revisional authority had instructed the forum below not to incorporate in the registration certificate of the petitioner the materials required for construction of office building, residential quarters and civil works, etc. Accordingly the registration certificate under both the Acts has suitably been amended on November 2, 1991 giving effect retrospectively, i.e., with effect from A....
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....ture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power and in exercise of this power, rule 13 was framed by the Central Government, which was amended, read at the material time, as follows (at page 567 of STC): "The goods referred to in clause (b) of sub-section (3) of section 8, which a registered dealer may purchase, shall be goods intended for use by him as raw materials, processing materials, machinery, plant, equipment, tools, stores, spare parts, accessories, fuel or lubricants, in the manufacture or processing of goods for sale or in mining, or in the generation or distribution of electricity or any other form of power." The honourable Supreme Court considering the scope of section 8(3)(b) came to hold that (page 568): ". . . A bare survey of the diverse uses to which the goods may be intended to be put in the manufacture or processing of goods, clearly shows that the restricted interpretation placed by the High Court is not warranted. The expression 'in the manufacture of goods' should normally encompass the entire process carried on by the dealer of converting raw material into finis....
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....ying on activities as a miner and as a manufacturer) fell within rule 13 even if the vehicles were used merely for removing ore from the mine to the factory, and finished goods from the factory to the place of storage. Spare parts and accessories required for the effective operation of those vehicles were also held to fall within rule 13. Following the aforesaid judgment, the honourable Supreme Court came to hold that if the process of designing is so intimately connected with the process of manufacture of cloth, it is opposed to reason to regard the process of designing as not being a part of the process of manufacture within the meaning of rule 13 read with section 8(3)(b). The process of designing may be distinct from the actual process of turning out finished goods. But there is no reason for limiting the meaning of the expression "in the manufacture of goods" to the process of production of goods only. The expression "in the manufacture of goods " takes within its compass, all processes which are directly related to the actual production. Their Lordships further held that in order to qualify for specification under section 8(3)(b) the goods must be intended for use of the n....
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.... available to the appellant-company. Similarly once again the honourable Supreme Court in the case of Collector of Central Excise, New Delhi v. Ballarpur Industries Limited [1990] 77 STC 282, came to hold that for an item to qualify as raw material, it need not necessarily and in all cases go into, and be found, in the end-product. Merely because this ingredient was consumed and burnt up in the course of chemical reactions it did not ipso facto cease to be a raw material. Now coming to the consideration of the judgments relied in the impugned order, in the case of Commissioner of Income-tax, Andhra Pradesh v. Taj Mahal Hotel [1971] 82 ITR 44, their Lordships were dealing with the term "plant" and whether the sanitary and pipeline fittings installed, fell within the definition of "plant" and whether the respondent, (1)See at page 103 of [1972] 29 STC. which ran a hotel, and had installed sanitary and pipelines fittings would be entitled to get "development rebate" under the Income-tax Act, in respect thereof, since these items fell within the definition of "plant" the respondent was entitled to development rebate in respect thereof and reached a conclusion that the intention of t....
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....ator of the business to be able, rapidly and cheaply and without much interruption of business, to alter the sub-divisions of the office building. Apart from this their Lordships have also referred to the decision of the Gujarat High Court in the case of Commissioner of Incometax v. Elecon Engineering Co. Ltd. [1974] 96 ITR 672, where the question before their Lordships was whether drawings and patterns received by an assessee from a foreign company under a collaboration agreement can be said to be plant on which depreciation is allowable. The Lordships of the Allahabad High Court came to hold that in a case where the subject-matter is the building of some other kind of structure, a distinction was made with a view to find out whether the building or the structure is something by means of which the business activities are carried on or the building or structure is such that it does not play any part in carrying on of those activities, but it is merely a place within which they are carried on. In order to decide this question, what is said to be functional test, is to be applied. If on the application of this test it is found that the subject-matter of a building or apparatus or a p....
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.... goods being purchased by it are integrally related to the generation and distribution of the electricity. Even if theoretically possible, whether it would make it commercially inexpedient for the purpose of generation of power and distribution of electricity. In respect of this issue, it is clearly covered by the decision of the honourable Supreme Court in the case of Commercial Taxes Officer, Circle-D, Jaipur v. Rajasthan Electricity Board [1997] 104 STC 89. In that case the honourable Supreme Court affirmed the view taken by the Rajasthan High Court, wherein the Rajasthan High Court came to hold that the Rajasthan Electricity Board which was engaged in the business of generation and distribution of electricity to the consumers, could purchase by way of interState trade, at concessional rate of tax under section 8(1) of the Central Sales Tax Act, 1956, trucks, trolleys , trailers and the like (but not passenger vehicles), as also their accessories and spare parts, tyres, and tubes and that the board was entitled to have its certificate of registration altered to include "tools and plants, including vehicles and other transportable goods, including other spare parts, tubes and tyr....