TaxTMI 
TaxTMI 
2025 (9) TMI 120
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.... 2. Whether under the facts and circumstances of the case the Tribunal is justified to rely upon the decision of the High Court in the case of Rewa Coal Fields Ltd. Shahdol Vs. Sales Tax Commissioner, M.P. & Others (1994) 18 CTJ, page-71 which is under the MP General Sales Tax Act when the definition of manufacture u/s-2(j) was wide enough even to include collection of sand from river bed. 3. Whether under the facts and circumstances of the case the Tribunal is justified to apply the definition of raw material in this case whereas the issue is on manufacture. The CG Vat Act do not define raw material. Questions of law in Tax Case No. 27/2024 1. Whether under the facts and the circumstances of the case inspite of accepting that the appellant do not hold explosive license the amount of Rs. 13,10,772/- in the balance sheet as blasting expenses, the Tribunal is justified to hold that this is purchase of explosive. 2. Whether under the facts and circumstances of the case the Tribunal is justified to rely upon the decision of the High Court in the case of Rewa Coal Fields Ltd. Shahdol Vs. Sales Tax Commissioner, M.P. & Others (1994) 18 CTJ, page-7....
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.... liable for enhanced rate of tax @ 10% under Section 4A of the Entry Tax Act and it was further pleaded that the applicant had never purchased explosives and had paid the amount to M/s. Starex Minerals. It was found that the applicant itself had shown Rs. 13,10,772/- for purchase of explosives and had paid entry tax @ 1%. The Chhattisgarh Commercial Tax Tribunal relying upon the judgment of the Supreme Court in the matter of Rewa Coal Fields Ltd. Shahdol v. Sales Tax Commissioner, M.P. and others (1994) 18 CTJ, page-71held that mining was a manufacturing activity and proceeded to dismiss the appeal and rectification application was also dismissed whereupon reference application was filed under Section 55(1) of the VAT Act which was also dismissed. However, ultimately, application was filed before this Court for calling upon the Tribunal to make a reference and the Tribunal was directed to make reference upon which this reference has been made and above stated questions of law have been sent by the Tribunal seeking answer by this Court. 5. Mr. Neelabh Dubey, learned counsel appearing for the applicants herein/assessee, would submit that the Assessing Officer solely relying upon t....
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....ndez and others (2021) 11 SCC 705 to support his contention. He would further rely upon the decision of the M.P. High Court in the matter of Associated Cement Companies Ltd. v. State of M.P. and others 1995 SCC OnLine MP 87. He would also submit that the applicants had purchased 'explosives' from outside the local area for use in 'mining' making them liable for entry tax under the Entry Tax Act. He would contend that amending the notification dated 29-9-1997, notification dated 27-7-2006 was published making substitution in entry No. 3 of Serial No. 1 and by the said amendment, enhanced rate of entry tax @ 6% was chargeable on purchase of 'explosives' from dealer registered within the State of Chhattisgarh and entry tax @ 10% was chargeable on purchase of 'explosives' from other dealer. He would further contend that once goods have been identified as being used mainly for manufacturing, in a particular local area/areas and notification under Section 4A is issued with respect to entry of such goods in the notified local areas, then tax cannot be charged at any other rate specified under Section 4. Since by notification dated 27-7-2006, the rate notified on entry of 'explosives' in l....
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....'s case (supra) has held that the charging event arises on entry of scheduled goods into a local area. It has been further held that charging event is complete as and when goods enter into local area for use, sale or consumption irrespective of its origin, and observed as under: - "63. There cannot be any dispute to the proposition as laid down by this Court in the abovenoted cases. Statutes which are in consideration are the statutes where clear charging provision has been enacted and charging of entry tax is on entry of the scheduled goods into a local area for consumption, use or sale. Thus, the charging event arises on entry of scheduled goods into a local area. Any goods which are entering into a local area of a State whether coming from another local area of State, any other State or outside the country, the charging event is same for all goods entering into local area. We, thus, are of the clear view that charging section is clear, unambiguous and the provisions cannot be read to mean that the imported goods coming from outside the country are excluded from charge of entry tax. No such indication is discernible from any provision of the Act. Charging event is comple....
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.... (1) The State Government may, by notification, specify the local area or areas and the goods which are used or consumed in such local area or areas mainly for the manufacture of other goods or as packing materials and may direct that, as from the date specified in the notification and in such manner as may be prescribed, the entry tax payable by a dealer under this Act shall be charged on his taxable quantum relating to such goods at a rate not exceeding fifty per centum as may be specified in such notification notwithstanding anything to the contrary contained in Section 4. (2) On the issue of the notification under sub-section (1), entry tax shall not be chargeable and payable on such goods at any other rate mentioned in any other provisions of this Act." 15. Section 4A of the Entry Tax Act empowers the State Government to specify the local area or areas and the goods which are used or consumed in such local area or areas mainly for manufacture of other goods. The State Government may direct that from the date specified in the notification and in the prescribed manner, entry tax payable by a dealer shall be charged on his taxable quantum relating to such good....
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.... chargeable on purchase of explosives from other dealers. This rate was made applicable in all local areas in the State of Chhattisgarh. 18. The M.P. High Court in Associated Cement Companies Ltd. (supra) has considered Section 4A of the Entry Tax Act and held that on the issue of the notification, entry tax shall be chargeable and payable on the entry of the goods specified at the rate to be prescribed in the notification subject to a ceiling of 10% per annum and not at the rate prescribed in Section 4 of the Schedules to the Act, and observed as under: - "11. xxx xxx xxx The intention underlying proviso I is to offer concessional rate of goods specified in Schedule II and all the goods specified in Schedule III other than limestone. Items 3, 13 and 14 of Schedule II which are excluded for the purpose of the proviso are iron and steel, paddy and pulses. Schedule III is in three parts. Part I prescribes 1.5% as the tax for goods specified in Entries 1 to 32, 32-A and 32-B of Part II of Schedule II and 7.75% for foreign and Indian Made foreign liquor. Part II specifies 0.5% as tax in respect of silver and gold ornaments of personal wear and 0.25% in respect of b....
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.... activity in the State cannot be regarded as an unreasonable classification or a classification having no nexus with the object sought to be achieved. It is also to be noticed that within the sub-group relating to limestone, no further classification has been attempted. In these circumstances, we are unable to hold that the exclusion of the limestone from the operation of the concession offends the equality clause of the Constitution. Point answered accordingly." 19. Furthermore, in Associated Cement Companies Ltd. (supra), their Lordships of the M.P. High Court considering the provisions of the Entry Tax Act held that the Entry Tax Act provides two legislative schemes in the matter of imposition of entry tax, one scheme which may be regarded as the normal scheme is comprised in Section 3, 4, 9 and related Sections and the second scheme is the one comprised in Sections 3, 4A and 12, and observed as under: - "26. The provisions of the Act clearly reveal two legislative schemes in the matter of imposition of entry tax. One Scheme which may be regarded as the normal scheme is comprised in Sections 3, 4, 9 and related sections. The second scheme is the one comprised in Sect....
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....s being violative of the first proviso to Section 9(1) of the Act are beyond the competence of the State Government the point is answered accordingly." 20. Similarly, in the matter of Mysore Cement Ltd. and another v. State of Madhya Pradesh and others 2003 SCC OnLine MP 479, the notification issued under Section 4A of the Entry Tax Act was unsuccessfully challenged. In the matter of Godfrey Philips India Ltd. v. State of M.P. and others 2008 SCC OnLine MP 660, the M.P. High Court, discussing the complete scheme of the Entry Tax Act, affirmed the principle of law laid down in Associated Cement Companies Ltd. (supra) and Mysore Cement Ltd. (supra), and observed as under: - "200. As far as the challenge to the constitutional validity of the several notifications issued by the State, mostly under section 4A of the Act, on the ground that few persons and goods have been selected for the purposes of imposing higher rate of tax, is concerned, the issues stand concluded by the judgments of this court in the cases of Associated Cement Companies Ltd. v. State of M. P. AIR 1996 MP 116 and Mysore Cement v. State of Madhya Pradesh 143 STC 432 (MP) ; (2003) 2 STJ 615 wherein prescri....