1993 (9) TMI 335 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of notice issued under section 12 of the Rajasthan Sales Tax Act, 1954.
2. Classification of old batteries scrap as raw material under section 2(mm) of the Act.
3. Restraining respondent from reopening assessment or passing adverse orders.
4. Determining whether manufacturing activities fall within the definition of "manufacture" under section 2(k) of the Act.

Analysis:
The petitioner, a manufacturer of lead rods from old batteries scrap, challenged a notice issued under section 12 of the Rajasthan Sales Tax Act, 1954, seeking to quash the notice and declare the scrap as raw material. The petitioner contended that the lead rods were manufactured through a complete process involving melting and shaping the material. The petitioner relied on a previous case where inclusion in the registration certificate was deemed conclusive proof of an item being raw material. The respondent reopened the assessment disallowing concessional tax rate on the scrap, citing a previous Board of Revenue decision. The respondent did not dispute the inclusion of batteries as raw material in the petitioner's registration certificate.

In a previous case, the Court held that inclusion in the registration certificate as raw material was conclusive proof and rejected the assessing authority's rejection of concessional tax rate claim. The Court emphasized that the registration certificate's contents were binding unless modified or cancelled, and penalties could not be imposed without evidence of breach. The respondent referred to a Board of Revenue decision from 1977, which deemed old batteries not raw material for lead manufacture. However, the Court noted a Division Bench decision that contradicted the Board's view, rendering it obsolete and overruled.

The respondent argued that the petitioner could address concerns before the authority and pursue remedies through appeal or revision if unsatisfied. The Court acknowledged the usual course of directing the petitioner to seek remedies through appropriate channels but highlighted the prolonged pendency of the matter since 1992. Citing the Division Bench's decisive view on registration certificate inclusion, the Court deemed further inquiry unnecessary and allowed the writ petition, quashing the notice dated July 1, 1992.

In conclusion, the Court upheld the petitioner's claim, emphasizing the conclusive nature of registration certificate inclusion as raw material and overruling the outdated Board of Revenue decision. The Court's decision rested on established legal principles and precedents, ensuring fairness and consistency in tax assessments related to raw material classification and concessional tax rates.