1985 (3) TMI 249 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to orders deleting explosives and other goods from raw materials in registration certificate under M.P. General Sales Tax Act.

Analysis:
The petitioner, a coal mining company, challenged the deletion of explosives and other goods from the raw materials specified in its registration certificate under the M.P. General Sales Tax Act. The petitioner contended that the definition of "raw material" in the Act was broad enough to cover these goods, and the Sales Tax Officer erred in excluding them. The petitioner had initially requested the specification of explosives, fuel, and lubricants as raw materials, which were included in the registration certificate. Later, dolomite and lime were also specified as raw materials. The Sales Tax Officer issued a memo requiring the petitioner to appear for amending the registration certificates, leading to the deletion of explosives and related goods from raw materials and categorizing them as incidental goods. The petitioner argued that explosives were essential ingredients for blasting coal mines and fell within the definition of raw material. The Deputy Advocate-General for the respondents contended that explosives could not be considered raw materials for manufacturing coal.

The court analyzed the definitions of "raw material" and "manufacture" under the Act. The definition of raw material included articles used as ingredients in manufactured goods or consumed in the manufacturing process, encompassing fuel and lubricants. The definition of manufacture included processes like extraction and collection. The court noted that mining involved the extraction of coal, falling within the definition of manufacture. Considering explosives as necessary for the extraction process, the court concluded that explosives qualified as raw materials. The court distinguished a previous case concerning timber and cement, emphasizing that explosives for mining were distinct. Therefore, the Sales Tax Officer's deletion of explosives from raw materials was unjustified.

The court allowed the petition, quashing the Sales Tax Officer's order and directing the reinstatement of explosives and other specified goods as raw materials in the registration certificate. Each party was ordered to bear its own costs, and any deposited security amount was to be refunded to the petitioner.