TaxTMI 
TaxTMI 
2010 (5) TMI 762
X X X X Extracts X X X X
X X X X Extracts X X X X
....s, "the Act"). It is the pleaded case of the petitioner that in the Industrial Policy Resolution announced by the Government of Assam in the year 1997, amongst others, individual industrial units established after April 1, 1997 were promised sales tax exemption on the sale of finished products as well as on the purchase of raw materials. Such exemption was to be granted for a period of seven years from the date of commencement of commercial production. As exemption from sales tax is regulated by the provisions of section 9(4) of the Act which contemplates the framing of appropriate schemes by the State Government, the Assam Industries (Sales Tax Concession) Scheme, 1997 was accordingly framed. Section 9(4) of the Act and clause (III) of the Scheme, which are in the following terms, will be required to be specifically noticed and, therefore, the said provisions are being reproduced hereinbelow: "9. (4) The State Government may, from time to time by notification in the Official Gazette, frame one or more schemes for the grant of relief to any class of industries within the State or within any specified part of the State on or after such date as may be specified in such scheme a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....expeller installed in the petitioner's unit from mustard seeds would continue to enjoy the exemption as before. Pursuant to the said decision of the District Level Committee, the eligibility certificate of the petitioner was amended and raw mustard oil which was earlier declared to be eligible for exemption of tax as a raw material stood deleted. It appears that, thereafter, the jurisdictional Superintendent of Taxes by a notice dated July 9, 2004 took note of the aforesaid developments and informed the petitioner that in view of the change of its entitlement for exemption from payment of sales tax, the petitioner is required to submit return and, thereafter, pay the requisite taxes. It also appears that an authorization certificate contemplated by the provisions of the Sales Tax Concession Scheme was issued to the petitioner by the Superintendent of Taxes on July 9, 2004 wherein mustard seeds alone was mentioned as the raw material on which exemption from payment of sales tax would be permissible. In the meantime, the assessing officer of the petitioner proceeded to complete the assessment of the petitioner for the period 2003-04 under the provisions of section 17(4) of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... learned senior counsel for the appellant and Mr. K. N. Choudhury, learned Additional Advocate-General, Assam appearing for the respondents. Dr. Saraf, learned senior counsel for the appellant/writ petitioner, has submitted that under section 9(4) of the Act exemption is to be granted on purchase of raw materials and also on the sale of the manufactured/ finished goods by an eligible unit. Referring to the Sales Tax Concession Scheme, Dr. Saraf has pointed out that the said Scheme contemplates grant of similar exemption to an eligible unit. Naturally, the Concession Scheme has to conform to the provisions of section 9(4) of the Act which basic requirement is adequately met in the present case. The exemption under the Act and the Scheme being on raw materials and manufactured goods, Dr. Saraf has laid emphasis on the definition of "manufacture" contained in section 2(22) of the Act which is in the following terms: "2. (22) 'manufacture' with all its grammatical variations and cognate expressions, means producing, making, extracting, altering, ornamenting, blending, finishing or otherwise processing, treating or adapting any goods; but does not include a works contract ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....earned Additional AdvocateGeneral, Assam, has contended that the judgments of the apex court relied upon on behalf of the appellant/writ petitioner have to be understood in the context of the facts of those cases and not as laying down any law of general application. Mr. Choudhury has also submitted that a consideration of the process deployed in the unit of the petitioner would go to show that raw mustard oil only undergoes a process of filtration before the filtered oil is packed in pouches for sale by the petitioner. The end-product, i.e., mustard oil, according to Mr. Choudhury, is no different from the input, i.e., raw mustard oil. In such a situation, the end-product, according to Mr. Choudhury, cannot be understood to have undergone a process of manufacture even in terms of the wide definition contained in section 2(22) of the Act. To support the above stand taken, Mr. Choudhury has relied on a judgment of the apex court in State of Maharashtra v. Shiv Datt & Sons reported in [1992] 84 STC 497; [1993] Supp. 1 SCC 222 to contend that the apex court while interpreting the word "manufacture" defined in section 2(17) of the Bombay Sales Tax Act, 1959 (which definition is in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he aforesaid view contained in para 5 of the judgment may be conveniently extracted below (at page 81 of 129 STC): "5. From a perusal of the definition, extracted above, it is clear that the processes of producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting of any goods fall within the meaning of the term 'manufacture'. But it may be pointed out that every type of variation of the goods or finishing of goods would not amount to manufacture unless it results in emergence of new commercial commodity. In the instant case, the very nature of the activity does not result in manufacture because no new commercial commodity comes into existence." Mr. Choudhury has also tried to take assistance from another judgment of the apex court in Punjab Aromatics v. State of Kerala reported in [2008] 14 VST 519; [2008] 11 SCC 482 wherein the apex court took the view that if the final product can be restored to the stage of the original input by another separate process the test of consumption/use of the input in the manufacture of the final product will not be satisfied so as to attract section 5A of the Kerala General Sales....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... changes in the end-product in comparison to the basic input must emerge. The extent of such change may vary from case to case. The decision of the apex court in Ashirwad Ispat Udyog[1999] 112 STC 207; [1998] 8 SCC 85 and Sonebhadra Fuels [2006] 147 STC 594 (SC); [2006] 7 SCC 322, in the ultimate analysis, does not lay down any proposition of law fundamentally different from what has been laid down in Shiv Datt Sons [1992] 84 STC 497 (SC); [1993] Supp. 1 SCC 222 and B.P. Oil Mills [1998] 111 STC 188 (SC); [1998] 6 SCC 577, inasmuch as, the end-product considered in Ashirwad Ispat Udyog [1999] 112 STC 207 (SC); [1998] 8 SCC 85 and Sonebhadra Fuels [2006] 147 STC 594 (SC); [2006] 7 SCC 322 had undergone some changes compared to the basic material from which the end-product had emerged. The decision in State of Maharashtra v. Mahalaxmi Stores [2003] 129 STC 79; [2003] 1 SCC 70 which insists on emergence of a new commercial commodity so as to attract the same definition as contained in the Assam Act (the apex court was considering the definition of "manufacture" in the Bombay Sales Tax Act, 1959 which is same as in the Assam Act) though, can be understood as striking a somewhat discord....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions of section 9(4) of the Assam Act would indicate that the said section is in two parts. By the first part the identity of the industries entitled to grant of relief by way of exemption is contemplated and the second part deals with the goods in respect of which the benefit of exemption will be applicable. The first part clearly identifies industries "producing goods" to be entitled to grant of relief under section 9(4) of the Act whereas the second part states that exemption will be both on raw materials and manufactured goods. The emphasis in section 9(4), therefore, is on production of goods in an industry. The above view also would be consistent with the purpose for which exemptions from payment of revenue are normally granted, i.e., to encourage industries with a view to greater productivity and employment. If section 9(4) of the Act is understood in the above manner, it would appear that only one specie of manufactured goods, i.e., those "produced" has been contemplated for grant of exemption under section 9(4). The learned single judge, therefore, was right in laying emphasis on the words "producing such goods": as appearing in section 9(4) of the Act and in examining the....