9911796707
TMI Blog1996 (1) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... Jagannath Cotton Company, v. State of Orissa [1995] 96 STC 291 (Orissa)], the writ applications were disposed of. The order of reassessment impugned in O.J.C. No. 1166 of 1992 and the notices impugned in other writ petitions were set aside on a finding that the order of reassessment was illegal. The earlier judgment is reported in [1995] 96 STC 291 (Orissa) (Jagannath Cotton Company v. State oj'Orissa). Against the aforesaid judgment, the Commissioner of Sales Tax and the Sales Tax Officer, Sambatpur (opposite parties 2 and 3) filed appeals in the Supreme Court which were numbered as Civil Appeal Nos. 6627 to 6631 of 1995. Ultimately, the appeals were allowed and the cases were remanded to the High Court for fresh consideration in the ligh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve consideration, we must also see what are the provisions, if any, in the Orissa Sales Tax Act providing exemption from sales tax in the case of new industries and whether they are consistent with the provisions of I.P.R. or are they different. The High Court seems to have proceeded on the assumption that the I.P.R. by itself is enough to provide the exemption from the sales tax. But where the provisions of the Sales Tax Act are also amended providing for exemption, then the court has to see whether they are the same as the I.P.R. or are they different-and if different, what is the effect of such difference. It is, therefore, necessary to ascertain the relevant provisions in the Sales Tax Act, Rules and notifications, if any, issued thereu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring process employed in the unit. No further counter-affidavit has been filed on behalf of opposite party No. I or opposite parties Nos. 2 and 3. 3.. In view of the observations made in the judgment of the Supreme Court (Commissioner of Sales Tax v. Jagannath Cotton Company [1995] 99 STC 83) and the contentions raised by either of the parties, the following questions are to be determined: (i) Whether there is any manufacturing process involved in producing "cotton" from "waste cotton"? and (ii) Whether the provisions of the Industrial Policy Resolution are consistent with the provisions of the Orissa Sales Tax Act? 4.. Since the provisions of the I.P.R. have been quoted in the previous judgment of this Court (Jagannath Cotton Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served in the Full Bench decision of this Court reported in [1995] 97 STC 375 (Sri Jagannath Industries v. State of Orissa) the definition clause introduced by way of amendment was essentially declaratory in nature and can be, read as intended to have retrospective effect. 6.. The word "manufacture" has been construed in several decisions of the Su preme Court reported in AIR 1968 SC 922 (South Bihar Sugar Mills Ltd. v. Union of India); [1973] 32 STC 623 (Ganesh Trading Co. v. State of Haryana) and [1964] 15 STC 719 (Hajee Abdul Shukoor and Co. v. State of Madras). The ratio of all these decisions is that every change in the raw material is not "manufacture", but there must be such a transformation that a new and different article must em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Full Bench decision of this Court reported in [1995] 97 STC 375 (Sri Jagannath Industries v. State of Orissa) that the process undertaken in preparing exercise and bound books out of paper is "manufacturing process". 8.. There is no dispute that the raw material used is "waste cotton". Ordinarily, "waste cotton" has no use and it is an industrial waste product. By re-cycling such industrial waste product the petitioner-unit is producing "cotton" which has got several uses. The process of changing "waste botton" to "cotton" has been described by the petitioner in its additional affidavit filed on November 17, 1995 in paragraphs 3.4 and 3.5. The said assertions made in paragraphs 3.4 and 3.5 are supported by the reply dated November 6, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the industrial unit is entitled to the exemption claimed by it. 9.. Mr. Ray, the learned counsel appearing for the petitioner, had also placed reliance upon the decision of the Allahabad High Court in the case of Kumar Fuels v. State of Uttar Pradesh [1986] 63 STC 467 to contend that it is not open to the sales tax authorities to go beyond the certificates issued in favour of the petitioner entitling it to claim exemption. However, in view of out decision upholding the main contention, it is not necessary to go into this aspect of the matter. 10.. Accordingly, the writ applications are allowed and the orders of assessment passed under section 12(8) of the Act as per annexures 1 and 1/A in O.J.C. No. 1166 of 1992 and the notices under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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