1968 (12) TMI 90 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to order of Commissioner of Commercial Taxes regarding inclusion of goods in registered dealers' certificate for special rate of sales tax under section 6A of Bihar Sales Tax Act, 1959.

Detailed Analysis:
The petitioner, a public limited company manufacturing iron and steel products, applied for inclusion of goods in the certificate under section 6A of the Act. The Assistant Commissioner allowed some items but rejected others. The Deputy Commissioner set aside the orders and remanded for verification. The Commissioner allowed more items, leading to a revision application by the company to the Commercial Taxes Tribunal, which was dismissed. The company then filed a writ petition in the High Court, which directed a rehearing by the Commissioner. The Commissioner's subsequent order was challenged by the company, leading to the current application.

The petitioner argued that certain items like lamps, spare parts, screens, oil seals, wagon components, and packing materials were essential for the manufacturing process. The company provided detailed explanations for the necessity of each item in the manufacturing and processing of iron and steel. An affidavit listing the items and their specific uses was submitted by the Assistant Purchasing Officer of the company.

The petitioner contended that the Commissioner unjustly disallowed the inclusion of the ten items of goods under section 6A of the Act. The State's counsel argued that the goods were not directly required for manufacturing iron and steel products. However, no counter-affidavit was filed to deny the necessity of the items. The Commissioner's decision lacked reasoning for disallowing the items, despite previous court directions to consider a liberal interpretation of the law.

The Court analyzed each item individually. It found that lamps used for plant lighting, spare parts for machinery, screens, oil seals, wagon components, and packing materials were essential for the manufacturing process based on the Supreme Court's broad interpretation of similar provisions. The Court held that these items should have been included in the registration certificate under section 6A of the Act.

The Court partially allowed the application, quashing the Commissioner's order regarding the ten disputed items and directing the sales tax authorities to include them in the company's registration certificate. No costs were awarded in the matter.

In conclusion, the Court's decision was based on the necessity and direct relevance of the disputed items to the manufacturing and processing activities of the company, aligning with the broader interpretation of the law provided by the Supreme Court in similar cases.