TaxTMI 
TaxTMI 
2015 (4) TMI 1082
X X X X Extracts X X X X
X X X X Extracts X X X X
....sh Commercial Tax Act, 1994 read with Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976. The petitioner-company is a duly incorporated and registered company under the Companies Act, 1956 engaged in the business of manufacture and sale of tea. The petitioner-company is having its own tea gardens situated outside the State of Madhya Pradesh where the tea is grown and processed in the units which results in finished commodities. The tea manufactured by the petitioner company outside the State of Madhya Pradesh is sold through its C & F depots and consignment agents appointed throughout the country. The company is also registered as a dealer under the provisions of the Madhya Pradesh Commercial Tax Act, 1994 and under the provisions of the Central Sales Tax Act, 1956. By virtue of the aforesaid registration also it continued to be registered as a dealer under the provisions of the VAT Act, 2002 which came into force from April 1, 2006. The company has established a unit for blending tea of different grades and repacking the same under smaller consumer packages at Mangliya., Distt. Indore. It has been contended that the petitioner-company receives different grad....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... issued by the State Government in exercise of the powers conferred by clause (o) of section 2 of the Madhya Pradesh Commercial Tax Act, 1994, the process of blending of tea does not constitute a process of manufacture. There is no change in the commercial duty, i.e., the tea which was brought into the State of Madhya Pradesh for the purpose of blending and tea transferred outside the State of Madhya Pradesh after its blending. The petitioner placed heavy reliance upon the definition of expression "manufacture" as defined under section 2(o) of the Madhya Pradesh Commercial Tax Act and his contention is that such definition of manufacture was applicable for the purpose of entry tax also. It has also been stated that since blending of tea has been statutory excluded from the definition of manufacture and in absence of any manufacture there could not be any change in commercial commodity as such it can never be said that the tea brought to the State of Madhya Pradesh for the purpose of blending is either used or consumed in the local area. Petitioner's claim was disallowed by the assessing authority by order dated December 7, 2006 and the assessing authority refused to grant the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ax has to be paid and the question of set off as claimed by the petitioner does not arise. He has placed reliance upon the judgment delivered in the case of Badrinarayan v. State of M. P. reported in [1988] 70 STC 12 (MP) and in the case of Chandrabhan & Co. v. D. K. Verma reported in [1981] CTJ 60 and his contention is that keeping in view the aforesaid judgments as different grades of tea is used in the process of blending the question of allowing the claim of the petitioner does not arise and entry tax has rightly been charged. Heard learned counsel for the parties at length and perused the record. In the present case, the entry tax is levied by virtue of statutory provisions as contained under the Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976. Section 3(1) of the Act, reads as under: There shall be levied an entry tax,- (a) On the entry in the course of business of a dealer of goods specified in Scheduled II, into each local area for consumption, use or sale therein; and (b) On the entry in the course of business of a dealer of goods specified in Schedule III into each local area for consumption or use of such goods but not fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ude its sale along with the goods packed or contained therein." The aforesaid statutory provision of law provides for imposition of entry tax and the word manufacture/processing does not find place in the aforesaid . statutory provision of law. The words "use" and "consumption" finds place in the aforesaid statutory provision of law. In the present case, it is an undisputed fact that different grades of tea is brought into the State of Madhya Pradesh by the petitioner and in the process of blending, different grades of tea is used while conducting the process of blending. In the case of Badrinarayan [1988] 70 STC 12 (MP), the Division Bench 7 of this court, in paragraph 3 to 5 has held as under (pages 14 to 16 in 70 STC): "3. Having heard the learned counsel for the parties, we have come to the conclusion that this petition deserves to be allowed. The short question for consideration in this case is whether the petitioner was entitled to the grant of eligibility certificate in accordance with the provisions of the notification dated October 23, 1981 issued by the State Government under section 12 of the Act. The relevant provisions of that notification, which were in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ay High Court in Nilgiri Ceylon Tea Supplying Co. v. State of Bombay [1959] 10 STC 500 (Bom). The assessees in this case were registered dealers in tea under the Bombay Sales Tax Act, 1953, and they purchased in bulk diverse brands of tea and without the application of any mechanical or chemical process, blended these brands of different qualities according to a certain formula evolved by them and sold the tea mixture in the market. The question arose before the sales tax authorities whether the different brands of tea purchased and blended by the assessees for the purpose of producing the tea mixture could be said to have been "processed" after the purchase within the meaning of the proviso to section 8(a), so as to preclude the assessees from being entitled to deduct from their turnover under section 8(a) the value of the tea purchased by them. The High Court of Bombay held that the different brands of tea purchased by the assessees could not be regarded as "processed" within the meaning of the proviso to clause (a) of section 8, because there was "not even application of mechanical force so as to subject the commodity to a process, manufacture, development or preparation" and th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re 3). In the circumstances of the case, parties shall bear their own costs of this petition. The outstanding amount of security deposit, if any, shall be refunded to the petitioner." Blending of tea was held to be a kind of production of a new commodity by the Division Bench of this court. In the case of Chandrabhan & Co. [1981] CTJ 60, it was held as under: "The words 'consumption' and 'use' in the context of entry 52 of List II were construed by the Supreme Court in Burmah Shell Oil Storage and Distributing Co. of India Ltd. v. Belgaum Borough Municipality AIR 1963 SC 906. The Supreme Court observed that 'the two expressions use and consumption together therefore, connote the bringing in of goods and animals not with a view to taking them out again but with a view to their retention either for use without using them up or for consumption in a manner which destroys, wastes, or uses them up'. It was further pointed out that 'in this context, the word "consumption", as has been shown above, must receive a larger meaning than merely the act of consuming in the generally understood sense.' The court then adopted with approval the meaning....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... word used is wider than consumption and any kind of utilisation which is ordinarily understood as consumption or use of a commodity entering a local area will make the commodity liable to tax under the Entry Tax Act. In the light of the aforesaid judgment delivered by the Division Bench of our own High Court, this court is of the considered opinion that the petitioner is certainly not entitled for any relief of whatsoever kind only because blending of tea does not fall within the meaning and term 'manufacture' in the light of the statutory exclusion of the process of blending from the definition of the word 'manufacture' under the Madhya Pradesh Commercial Tax Act. Keeping in view section 3(1) of the Entry Tax Act, as the commodity in question has been used and the words 'consumption and use' are mentioned in the charging section, in the light of the Division Bench judgments, this court is of the considered opinion that the revisional authority was justified in dismissing the revision of the petitioner. In respect of the judgments relied upon by the learned counsel for the petitioner, as they all relate to manufacturing process and the term manufacture, are....