TaxTMI 
TaxTMI 
2023 (4) TMI 911
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....e General With Shri Piyush Dharmadhikari And Shri A.D. Bajpai, Government Advocates ORDER These Bunch of cases belong to two different categories. W.P. No.16965/2016 and W.P. No.16453 pertain to 100% exemption from Entry Tax over import of coal by petitioners therein while WP No.3109/2015, W.P. No.2034/2015, W.P. No.2380/2015, W.P. No.2552/2015, W.P. No.3112/2015, W.P. No.3655/2015, W.P. No.4064/2016, W.P. No.4047/2017, W.P. No.9077/2018 and W.P. No.5912/2020, W.P. No.8691/2019 and W.P. No.16803/2020 pertain to concession in the rate of Entry Tax. Pertinently, among the cases seeking concession in Entry Tax, five cases (W.P. No.2034/2015, W.P. No.2552/2015, W.P. No.2380/2015, W.P. No.3109/2015 & W.P. No.3112/2015) relate to reopening of assessment. 2. Questions of law involved herein are common and therefore present order shall dispose of all these petitions. 3. Questions of law which beg for answers are as follows: (i) Whether coal imported by petitioners for generation of electricity in it's Thermal Power Plant is 100% exempt from levy of Entry Tax on the anvil of notification dated 13.12.2010 by virtue of being raw material purchased in the course of busines....
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.... provided in Section 2(28) of OVAT Act read with Rule 2(1)(c) of the OET Rules and Section 2(q) of the OET Act and all the above judicial pronouncements of Hon'ble Supreme Court and High Court, we are of the considered view that the activity of generating electricity in thermal power plant by using coal would qualify as a manufacturing activity. 2. In view of above decisions of Hon'ble Supreme Court, electricity is an article as referred to in Section 2(28) of the OVAT Act read with Rule 2(1)(c) of OET Rules which define 'manufacture'. 3. The above process clearly demonstrates that coal is the primary raw-material for generation/production of electricity in thermal power plant and without coal, no electricity can be produced/generated/manufactured. 5.2 While answering the aforesaid questions in aforesaid manner, following reasons were assigned by the Orissa High Court: (1) It is not the case of the Assessing Authority that without coal thermal power which is finished product in a thermal power station can be produced and therefore, coal is not a primary/principal raw material to generate/produce thermal power. On the other hand, use of coal and product....
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....y dismissal of SLA(C) No.35253/2015 preferred by State of Odisha on 05.07.2017. The order passed by Apex Court on 05.07.2017 is as follows: "Heard the learned counsels for the parties and perused the relevant material. We do not find any legal and valid ground for interference. The Special Leave Petition is dismissed. Contempt proceedings agaisnt Mr. A.C. Nayak, Joint Commissioner of Sales Tax, Sambalpur Range, Sambalpur is directed to stand closed." As such it is urged that petitioners are entitled to exemption/concession from payment of Entry Tax on coal purchased by petitioners on the anvil of notification dated 13.12.2010 vide Annexure P/3 in W.P. No.16965/2016 and concession in payment of Entry Tax as per notification no.A-3-195-05- 1-V(15), dated 01.04.2007 Annexure P/4 in W.P. No.3109/2019. 7. Per contra, State represented by Additional Advocate General Shri Ashish Anand Bernard contends that due to material difference in the terminology used for defining the expression "in the course of business", "raw material" and "manufacture" in the Odisha VAT Act, 2004 on one hand and M.P. VAT Act, 2002 on the other, the Division Bench judgment of Orissa High Co....
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....SCC 388 (Goan Real Estate and Construction Limited and another vs. Union of India) (2018) 9 SCC 1 (Commissioner of Customs (Import), Mumbai vs. Dilip Kumar and Company and others) (2019) 7 SCC 703 (Achal Industries vs. State of Karnataka), (2020) 3 SCC 133 (P. Singaravelan and others vs. District Collector, Tiruppur and DT and others), (2022) 5 SCC 62 (Krishi Upaj Mandi Samiti, New Mandi Yard, Alwar vs. Commissioner of Central Excise and Service Tax, Alwar). 8. As regards the cases pertaining to concession in the levy of entry tax on import of coal, Shri G.N. Purohit, learned senior counsel alongwith Shri Eshan Tripathi by referring to the definition of expression "raw material" in Section 2(g) of M.P. Entry Tax Act, 1976, contends that the said definition is unambiguous and self explanatory, which includes within its wide and generic sweep, fuel (coal) required for manufacturing/generating electricity. Shri Purohit further contends that once the concessional rate of Entry Tax to the tune of 2% was notified, no enhancement in the rate can take place in absence of any change in the fact situation. Shri Purohit also urges that reliance placed by....
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....ea for consumption or use of such goods but not for sale therein; and such tax shall be paid by every dealer liable to tax under the [VAT Act] who has effected entry of such goods: Provided that no tax under this sub-section shall be levied,- (not reproduced for being irrelevant) Section 10 : Power to exempt The State Government may, by notification, and subject to such restrictions and conditions as may be specified therein, exempt, whether prospectively or retrospectively, in whole or in part : (i) any class of dealers or persons, or any goods or class of goods, from the payment of entry tax under this Act in respect of all or any of the local areas, for such period as may be specified in the notifications; (ii) any dealer or class of dealers, from any provision of the Act as may be specified in the notification : Provided that in respect to the period during which the Ordinance repealed under Section 24 was in force, the retrospective effect may be given from the date of the commencement of the said Ordinance as if the liability to pay tax arose under this Act and for that purpose it shall and shall always be deemed that the ....
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....ommercial parlance having a distinct name, character and use, but does not include such activity of manufacture as may be notified; (pa) xxx xxx xxx (pb) xxx xxx xxx q) xxx xxx xxx (r) xxx xxx xxx (s) xxx xxx xxx (t) xxx xxx xxx (u) xxx xxx xxx (v) xxx xxx xxx (w) xxx xxx xxx (x) xxx xxx xxx (y) xxx xxx xxx (z) xxx xxx xxx 10. In the face of rival contentions as reproduced above, it is obvious that this Court has to deal with the four questions as enumerated above. 10.1. The first question posed by this Court is whether coal imported by petitioners for generation of electricity by Thermal Power Plant is exempted from Entry Tax on the anvil of notification dated 13.12.2010 by virtue of being raw material purchased in the course of business ? 10.1(a) The exemption notification dated 13.12.2010 issued u/S 10 of M.P. Entry Tax Act is extracted below: "Bhopal, the 13th December 2010 FA-3-25-2010-1-V-(96).-In exercise of the powers conferred by Section 10 of the Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 (No.52 of 1976) (her....
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....nbsp; (5) The facility of exemption under this notification shall be available to the industrial unit which has commenced commercial production on or after 1st November, 2010, but before 1st November, 2015." 11. Bare perusal of the charging provision Section 3 of M.P. Entry Tax Act reveals that the levy of Entry Tax is on the entry in the course of business of a dealer of goods specified in Schedule II into each local area for consumption, use or sale. However, no levy of entry tax can be made over goods specified in Schedule III which are for sale. Extract of Schedule II appended to M.P. Entry Tax Act reads as under: SCHEDULE II (Effective from 1.10.97) (See Sections 4, 9 and 12) S.No. Description of goods Rate of tax(%) (1) (2) (3) 1. Coal including coke in all its forms 2.5 11.1 The State is vested with power to exempt certain goods from levy of entry tax subject to such restrictions and conditions and on such terms and conditions as it thinks fit. In the instant case, the State by notification dated 13.12.2010 Annexure P/3 in W.P. No.16965/2016 exempted in whole payment of Entry Tax on coal which is brought by dealers into the local ....
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....Ltd., (1998) 2 SCC 32 of a Division Bench and the case of Servo-Med Industries (P) Ltd. vs. CCE, (2015) 14 SCC 47 rendered by three Judge Bhench are being extracted below: "Union of India v. J.G. Glass Industries Ltd., (1998) 2 SCC 32 On an analysis of the aforesaid rulings, a twofold test emerges for deciding whether the process is that of "manufacture". First, whether by the said process a different commercial commodity comes into existence or whether the identity of the original commodity ceases to exist; secondly, whether the commodity which was already in existence will serve no purpose but for the said process. In other words, whether the commodity already in existence will be of no commercial use but for the said process. In the present case, the plain bottles are themselves commercial commodities and can be sold and used as such. By the process of printing names or logos on the bottles, the basic character or the commodity does not change. They continue to be bottles. It cannot be said that but for the process of printing, the bottles will serve no purpose or are of no commercial use. Servo-Med Industries (P) Ltd v. CCE, (2015) 14 SCC 47 ....
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....thus exhaustive in nature. This expression "business" includes the process of manufacture. 11.10 In view of above provision, it is obvious that coal is raw material as defined in Section 2(g) of M.P. Entry Tax Act required for the process of manufacturing/generation of electricity. More so coal is also one of the items mentioned in Schedule II appended to the Entry Tax Act. 11.11 Once it has been held that coal is raw material for manufacturing/generating electricity and thus is exigible to Entry Tax Act, the exemption/concession notification issued by the State u/S 10 of M.P. Entry Tax Act vide Annexure P/3 in W.P. No.16965/2016, and Annexure P/4 in W.P. No.3109/2015 are available to be availed by petitioners exempting them from payment of Entry Tax on coal brought into local area where the thermal power station of petitioners are situated on such terms and conditions as mentioned in the notification. 12. For the sake of clarity and convenience, this Court produces a comparative tabular illustration of the definition provided in M.P. VAT Act/M.P. Entry Tax Act on the one hand and Orissa VAT Act/Entry Tax Act of certain relevant expressions as follows: M.P. Entry Tax Ac....
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....) "Business" includes - (a) any trade, commerce or manufacture; (b) any adventure or concern in the nature of trade, commerce or manufacture; (c) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern; (d) any transaction in connection with, or incidental or ancillary to, the commencement or closure of such trade, commerce, manufacture, adventure or concern; (e) any occasional transaction, whether or not there is volume, frequency, continuity or regularity of such transaction, in the nature of such trade, commerce, manufacture, adventure or concern, whether or not such trade, commerce, manufacture, adventure, concern or transaction is effected with a motive to gain or profit or whether or not any gain or profit accrues from such trade, commerce, manufacture, adventure, concern or transaction. Explanation.- For the purposes of this clause,- (i) the activity of raising of man-made forest or rearing of seedlings or plants shall be deemed to be a business, (ii) transaction of sale or purchase of capital goods pertaining to any trade, commerce, manufacture, adventure, concern or transaction sh....
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....ered by Division Bench of Orissa High Court equating the expression "generation of electricity" to "manufacture of electricity". 13.2 More so, the judgment of Division Bench of Orissa High Court has been upheld by Apex Court by dismissal of SLA(C) on 05.07.2017 which is an order passed on merits after due consideration of the grounds raised by the State of Odisha and the respondents before Apex Court. The very fact that the order of the Apex Court starts with the sentence "Heard the learned counsel for the parties and perused the relevant material, we do not find any legal and valid ground for interference" reflects that Apex Court after due consideration of the rival contentions had dismissed the Special Leave to Appeal of the State of Odisha. The order of Apex Court passed on 05.07.2017 is of dismissal of SLA(C) No.35253/2015 and thus it appears that leave to prefer an appeal is declined to State of Odisha. As such, the doctrine of merger does not come into play but, however, the judgment of Division Bench of Orissa High Court acts as res judicata in subsequent proceedings between the parties therein. This principle has been laid down in the case of Kunha Yammed and others vs.....
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....of electricity were treated to be raw material for manufacturing electricity. 14. This Court is conscious of it's limitations faced while interpreting taxing Statutes. The time tested principle laid down in the celebrated case of Cap Brandy Syndicate vs. Inland Revenue Commissioner is that the Taxing Statue has to be looked at as what it clearly textually says since there is no room for intendment or equity about a tax. More so there is no presumption as to a tax. Nothing is to be read in and nothing is to be implied. The Court can look fairly at the language used by the Taxing Statute. 15. If the contention of learned counsel for the State is accepted then lot many things will have to be intended, implied and presumed which, in the considered opinion of this Court, will do offence to the plain and clear language of the Statute. 16. In the conspectus of above discussion, this Court has no manner of doubt that submissions of State deserve to be rejected and petitions with regard to exemption as well as concession deserve to be allowed. 17. Accordingly, petitions are allowed in following manner: (1) W.P. No.16965/2016 - To the extent indicated above the impugned ....