1964 (10) TMI 41 - SC - VAT and Sales Tax

Inclusion in certificate of registration - Held that - Appeal partly allowed. The order passed by the High Court will therefore be modified. Items (i), (ii) and (vi), laboratory fittings out of item (iii) used for sampling and analysis of the ore and other raw materials in the mining operations and in the process of manufacture for sale and cane baskets out of item (vii) used for carrying ore and other materials used in the course of manufacture, will be specified in the certificate of registration. Household, hospital equipment with furnishings and fittings part of item (iii) , medical supplies item (iv) , stationery item (v) and cane baskets used for collecting refuse to protect the health and cleanliness in the colony of workmen part of item (vii) will not be included in the certificate of registration.

Summary

Issues Involved: Specification of goods in the certificate of registration under Section 8(3)(b) of the Central Sales Tax Act, 1956.

Issue-wise Detailed Analysis:

1. Locomotives and Motor-Vehicles:
The High Court excluded vehicles used by the Corporation after mining operations concluded and before manufacturing commenced, as well as those used for transporting finished products. The Supreme Court found no basis for this exclusion, noting that the vehicles were integral to the continuous process of mining and manufacturing. The Court held that vehicles used for transporting raw materials to the factory and finished products from the factory should be included in the certificate of registration.

2. Accessories and Spare Parts for Locomotives and Motor-Vehicles:
Given the inclusion of locomotives and motor-vehicles used in the entire process, the Supreme Court also included their accessories and spare parts in the certificate of registration. The High Court's exclusion was found unjustifiable.

3. Hospital Equipment with Furnishings and Fittings:
The High Court excluded hospital equipment, furnishings, and fittings, despite the statutory duty to provide hospital facilities. The Supreme Court agreed, stating that these items are not directly intended for use in manufacturing or mining operations, even though maintaining health services is obligatory.

4. Medical Supplies:
Similar to hospital equipment, medical supplies were excluded as they are not intended for direct use in manufacturing or mining operations. The Supreme Court upheld the High Court's decision.

5. Stationery:
The High Court excluded stationery, reasoning it is not intended for direct use in manufacturing or mining operations. The Supreme Court concurred, noting that while stationery facilitates business operations, it does not meet the criteria for inclusion under Section 8(3)(b).

6. Tyres and Tubes for Motor-Vehicles:
The Supreme Court included tyres and tubes for motor-vehicles in the certificate of registration, aligning with its decision on locomotives and motor-vehicles.

7. Cane Baskets:
The High Court excluded cane baskets used for collecting refuse but included those used for carrying ore and other materials. The Supreme Court agreed with the inclusion of baskets used in the manufacturing process but disagreed with the exclusion of baskets used for refuse collection, emphasizing their role in maintaining health and cleanliness.

Laboratory Fittings:
The High Court specified laboratory fittings only for initial stages of mining and manufacturing. The Supreme Court found no basis for this limitation and included all laboratory fittings used for sampling and analysis throughout the mining and manufacturing process.

Conclusion:
The Supreme Court modified the High Court's order, specifying items (i), (ii), (vi), laboratory fittings for all stages of mining and manufacturing, and cane baskets used for carrying ore and materials in the certificate of registration. Items such as household and hospital equipment, medical supplies, stationery, and refuse-collecting cane baskets were excluded. The appeal was partially allowed with no order as to costs.