TaxTMI 
TaxTMI 
2023 (4) TMI 911
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....ari 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 business ? (ii) Whether provisions of Odisha VAT Act, 200....
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....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 production of electricity in a thermal power plant is an integral process and so inextricably connected that no thermal power can be prod....
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....es 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 Court cannot be applied mutatis mutandis to the facts and circumstances prevailing herein. The other contentions of learned counsel for State are as follows: (i) There is a marked difference between th....
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....llector, 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 State over the decision of Apex Court in Union of India vs. Ahmedabad Electricity Co. Ltd., 2003 (11) SCC 129 is misplaced for the reason that the said case relates to Central Excise Act where the definition of 'manufacture' is materially distinct from the definition of 'manufacture' under M.P. VAT Act. It is also contended by Shri P....
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....n 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 provisions of this Act to the extent they correspond to the provisions of the said Ordinance were in force during the material times. M.P. VAT Act, 2002 Section 2 (a) xxx xxx xxx (b) xxx xxx xxx (c) xxx xxx xxx (d) Business includes,- (i) any trade, commerce, manufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any gain or profit accrue....
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....cation 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) (hereinafter referred to as the Entry Tax Act), the State Government, hereby, exempts in whole from payment of entry tax under the said Act the class of dealers specified in column (2) of the Table below other than those specified in Annexure I, for the period specified in column (3) subject to the restrictions and conditions specified in column (4) of the said Table :- TABLE S.No. (1) Class of dealers (2) Period (3) Restrictions and conditions subject to which exemption is granted. (4) 1. Registered dealer who established a new industrial unit in any of the districts in the State of Madhya Pradesh. For a period of five years from the date of effecting the first purchase of raw material as on or after 1st November, 2010 for consumption in the industrial unit. (1)....
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....r 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 area as raw material in the manufacture of goods. Petitioners or all dealers bring coal into local area for being consumed by their thermal power stations for generation of electricity. 11.2 The Registration Certificate of petitioner vide Annexure P/2 in W.P. No.16965/2016 specifies karobar ka swarup as power generation, coal, SHD, etc. 11.3 The process of generation of electricity in a thermal power station is succinctly enumerated in the Division Bench judgment of Orissa High Court which can very well be borrowed for convenience, brevity and to avoid prolixity, as such; (i) Coal is burnt to create heat; (ii) The energy so generated by burning coal is used to heat water and air; (iii) This leads to creation of steam; (iv) The steam fired at high pressure turns the blades of turbine; (v) Turning of blades of turbine which contains dynamo conve....
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....e 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 27. The case law discussed above falls into four neat categories: (1) Where the goods remain exactly the same even after a particular process, there is obviously no manufacture involved. Processes which remove foreign matter from good complete in themselves and/or processes which clean goods that are complete in themselves fall within this category. (2) Where the goods remain essentially the same after the particular process, again there can be no manufacture. This is for the reason that the original article continues as such despite the said process and the changes brought about by the said process. (3) Where the goods are transformed into something different and/or new after a particular process, but the said goods are not marketable. Examples within this group are the Brakes India case [Brakes India Ltd.v. Supt. of Central Excise, (1997) 10 SCC 717] and cases where the transformation of goods having a shelf life which i....
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....roduces 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 Act/M.P. VAT Act Orissa VAT Act Raw Material - Section 2(1)(g) of M.P. Entry Tax Act. raw material means an article used as an ingredient in any manufactured goods, or an article consumed in the process of manufacture and includes fuel and lubricants required for the process of manufacture; Raw Material - Section 20(8)(k) In respect of raw materials used in manufacture or processing of goods, where the finished products are exempt from tax. Manufacture - Section 2(p) of M.P. VAT Act "Manufacture" includes any activity that brings out a change in an article or articles as a result of some process, treatment, labour and results in transformations into a new and different article so understood in commercial parlance having a distinct name, character and use, but does not include such activity of manufacture as may be notified; Manufacture - Section 2(28) "Manufacture" means any activity that brings out a change in an article or articles as result of some process, ....
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....l 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 shall be deemed to be a transaction comprised in business, (iii) purchase of any goods, the price of which is debited to the business and sale of any goods, the proceeds of which are credited to the business shall be deemed to be transactions comprised in business; Goods - Section 2(m) of M.P. VAT Act "Goods" means all kinds of movable property including computer software but excluding actionable claims, newspapers, stocks, shares, securities or Government stamps and includes all materials, articles and commodities, whether or not to be used in the construction, fitting out, improvement or repair of movable or immovable property, and also includes all growing crops, grass, trees, plants and things attached to, or forming part of the land which are agreed to be severed before the sale or under the contract of sale. Goods - Section 2(21) "Goods" means every kind of movable property not being newspapers, actionable claims, money, stock, shares or securities, and includes all materials, commodities and articles (inc....
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....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. State of Kerala and another, (2000) 6 SCC 359 where in concluding paragraph, Apex Court held thus: "44(v) If the order refusing leave to appeal is a speaking order, i.e., gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the Supreme Court being the Apex Court of the country. But, this does not amount to saying that the order of the court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting the special leave petition or that the order of the Supreme Court is the only order binding as res judicata in subsequent proceedings between the parties." ....
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....ly, petitions are allowed in following manner: (1) W.P. No.16965/2016 - To the extent indicated above the impugned order dated 02.09.2016 Annexure P/17 passed by Divisional Deputy Commissioner, Commercial Tax, Jabalpur Division II stands quashed. (2) W.P. No.2034/2015 - To the extent indicated above the reassessment notice dated 10.06.2014 Annexure P/2 and the order of reassessment dated 19.12.2014 Annexure P/6 passed by Divisional Deputy Commissioner, Commercial Tax, Satna stand quashed. (3) W.P. No.2380/2015 - To the extent indicated above the reassessment notice dated 10.06.2014 Annexure P/2 and the order of reassessment dated 19.12.2014 Annexure P/6 passed by Divisional Deputy Commissioner, Commercial Tax, Satna stand quashed. (4) W.P. No.2552/2015 - To the extent indicated above the reassessment notice dated 10.06.2014 Annexure P/2 and the order of reassessment dated 19.12.2014 Annexure P/6 passed by Divisional Deputy Commissioner, Commercial Tax, Satna stand quashed. (5) W.P. No.3109/2015 - To the extent indicated above the assessment order dated 10.06.2014 Annexure P/2 and the order dated 19.12.2014 Annexure P/6 passed by Divisional Deputy Commissioner, Commercial ....