9911796707
TMI Blog2010 (7) TMI 783X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased printing ink for Rs. 1,00,03,050 from M/s. Quality Ink Manufacturing, Kottayam during the year 2001-02. The ink so purchased was to be used for printing newspapers by the said firm. This firm filed form No. 18 under the Kerala General Sales Tax Act, 1963 (for short, "the Act") for purchase of raw material for use in the manufacture of "finished goods", i.e., newspaper and in terms of section 5(3) of the Act they were liable to pay only concessional tax at the rate of three per cent for that period. There was no dispute at any point of time that this concern was engaged in printing of newspapers. However, the Department felt that no manufacturing was involved in the process of printing of newspapers and, as such, purchase of prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was held that "manufacture" means use of raw materials for production of goods commercially different from raw materials used. When the end-product is a commercially different product, it amounts to manufacturing. The Assistant Commissioner, Commercial Tax, who had issued the notice, came to the conclusion that the concession has been extended to non-taxable goods also and formed an opinion that the concession is applicable only to "goods" and newspaper was not a "goods" within the meaning of section 2 of the Act. While referring to another judgment of this court in Collector of Central Excise, New Delhi v. Ballarpur Industries Ltd. [1990] 77 STC 282; [1989] 4 SCC 566, the said Assistant Commissioner concluded that newspa- per was not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (3) of section 5 of the Act, the High Court held that the notice issued was proper as form No. 18 which gives benefit of concessional rate of tax was factually not correct. While dismissing the writ petition, however, the Bench issued a direction to the assessing authority to examine whether the imposition of penalty at double the rate is justified in the facts and circumstances of the case, within a period of two months from the date of receipt of the copy of the judgment. It is this judgment of the High Court which has been assailed in the present appeal under article 136 of the Constitution of India. The learned counsel appearing for the appellant with some vehemence argued that the High Court had specifically noticed the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the matter at best can be remanded to the High Court and the notice cannot be quashed as the contentions will still have to be examined by the competent authority/courts. Having heard the learned senior counsel appearing for the parties, we are of the considered view that the order under challenge requires interference by this court. There is no dispute to the fact that the material amendments were carried out in the provisions of section 5(3) of the Act with effect from April 1, 2002. The existing first proviso to section 5(3)(i) was deleted as well as the expression "or uses the same in the manufacture of any goods which are not liable to tax in this Act" in section 5(3)(i) was also deleted. Despite these amendments, as it appears fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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