9911796707
TMI Blog1967 (7) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... he observation that the two purchasing dealers did not purchase the gloves either for the purposes of manufacture or for resale. He, however, found that the said gloves appeared to have been used by the workers while engaged in work in factories. Against the aforesaid order of the Commercial Tax Officer, the assessee appealed before the Assistant Commissioner of Commercial Taxes, Chowringhee Circle, who affirmed the order of the Commercial Tax Officer with the following observations: "The 'gloves' are no doubt essentially required by the factory workers in handling shovels, rods, etc., by them to guard against heat and/or corrosion but the same cannot be said as being required or having any direct bearing in the process of manufacture of goods for sale. I am, therefore, of the opinion that the noted purchasing dealers were not entitled to purchase the gloves free of tax on the strength of their registration certificate." Aggrieved by the order of the Assistant Commissioner, the assessee appealed before the Commissioner of Commercial Taxes and the appeal was heard by the Additional Commissioner. Before the Additional Commissioner it was argued that the gloves, in respect of wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led an application for revision before the Board of Revenue. The Additional Member of the Board of Revenue rejected that application with the following observation: "The grounds raised on behalf of the petitioner boil down to the determination of one single point, namely, whether these gloves can be said to be intended for use by the purchasing dealers in the manufacture of goods for sale. The learned Additional Commissioner has held that they cannot be said to be used in the manufacture of goods for sale. Upon a careful consideration of the question, I come to hold the same view. The preposition 'in' justifies and, in fact, requires restricted interpretation of the relevant clause in section 5(2)(a)(ii)." Thereupon the assessee-dealer tried to induce the Board to make a reference to this Court on a question of law involved in the case and therein failing moved this Court and obtained an order from this Court calling upon the Board of Revenue to make a statement of case on the following question of law: "Whether the 'gloves' put on by the purchasing companies' workmen engaged in hot jobs or in handling corrosive substances in the course of manufacture can be said to have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otives and motor vehicles, (d) tyres and tubes for such motor vehicles, (e) laboratory fittings used for the sampling and analysis of the ores and other raw materials in the initial stage of mining operations and in the process of manufacture. The claim of the assessee in respect of the exclusion of other goods was rejected. Thereupon the assessee appealed before the Supreme Court. Shah, J., in delivering the judgment of the Court, observed: "........It is......difficult to appreciate the ground on which the High Court sought to exclude from the 'locomotives and motor vehicles' those vehicles which were used by the Corporation after the mining operations were concluded and before the manufacturing process commenced, and those which were used in carrying finished products. There was not even an averment that vehicles which were used for the excluded purposes were different from the vehicles used in carrying and removing raw materials during the process of manufacture and vehicles used underground and on the surface in mining operations. This by itself would be sufficient to reject the reservation made by the High Court. We are also of the opinion that in a case where a dealer is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd other materials used in mining or in the manufacture of goods are not intended for use in the process of manufacturing or mining operations. We are also unable to appreciate why the High Court specified laboratory fittings used for analysis and sampling ore and other raw materials only in the initial stages of mining operations and in the process of manufacture. There is no discussion in the judgment in support of this observation, and we see no ground to support the reservation which restricts the specification to laboratory fittings used only in the initial stages." In the next case, that is to say, in the case of J.K. Cotton Spinning and Weaving Mills Co. Ltd.[1966] 16 S.T.C. 563., the Supreme Court interpreted the expression "in the manufacture of goods" in section 8(3)(b) of the Central Sales Tax Act in the following language: "The expression 'in the manufacture of goods' should normally encompass the entire process carried on by the dealer of converting raw materials into finished goods. Where any particular process is so integrally connected with the ultimate production of goods that but for that process, manufacture or processing of goods would be commercially inexpedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be two per cent. of his turnover. (2) * * * (3) The goods referred to in clause (b) of sub-section (1)- (a) * * * (b) are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power." The rule referred to in section 8(3)(b) is rule 13 of the Central Sales Tax (Registration and Turnover) Rules, 1957, which reads as follows: "The goods referred to in clause (b) of sub-section (3) of section 8, which a registered dealer may purchase, shall be goods intended for use by him as raw materials, processing materials, machinery, plant, equipment, tools, stores, spare parts, accessories, fuel or lubricants, in the manufacture or processing of goods for sale or in mining, or in the generation or distribution of electricity or any other form of power." Section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act is similar to section 8(3)(b) of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where any particular process is so integrally connected with the ultimate production of goods that, but for that process, manufacture or processing of goods would be commercially inexpedient, goods required in that process would, in our judgment, fall within the expression 'in the manufacture of goods'." Illustrating what their Lordships had said earlier, it was further observed that in a factory manufacturing cotton and other textiles, certain electrical equipment in the present stage of development would be commercially necessary. For instance, without electric lighting it would be very difficult to carry on the business and their Lordships allowed electrical lighting equipments also under section 8(3)(b). As we read the two judgments of the Supreme Court, we feel that goods which are consumed in the manufacture of finished products, as also goods which are used in the process of manufacturing so as to make the manufacture commercially expedient, are goods which may be treated as used in the manufacture. In the instant case, the concurrent findings of the revenue authorities are that the industrial gloves were essentially required by the workmen to operate the shovels and rods ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
