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TMI Blog2001 (4) TMI 882X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. Advocates M/s. Nagendran, V. Giri and Mohammed Nias had appeared for the petitioners and Sri. N. Manoj Kumar, Government Pleader represented the State. Facts in O.P. No. 9834 of 2001 may be taken as a representative case. It is a limited company and the others are also companies, having their factories in the State of Kerala. 4.. M/s. United Alloys (P) Ltd., is engaged in the manufacture of iron and steel products, including M.S. ingots. Most of the purchases for manufacture is from outside the State, and using C forms. They have Kerala general sales tax and Central sales tax registration. The purchases suffer four per cent Central sales tax, invariably. A demand had been raised against them for entry tax under the Kerala Tax on Entry of Goods into Local Areas Act, 1994 ("Entry Tax Act") on March 8, 2001, for the years 1997-98, 1998-99 and 1999-2000. Notice under section 15(1) by the Intelligence Officer (2nd respondent) alleged as following: "You have not filed the return as required under section 7(1) of the Act before the authority concerned. A notice dated February 24, 2001 was issued to remit the entry tax along with penalty under section 15(2) of the Kerala Tax on E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt, and it was no more open to challenge at the hands of the petitioners. It is further submitted therefore that the issue of reading down the provisions never arises. The original petitions are premature if not misconceived. Over and above these the benefit of S.R.O. Nos. 263 and 702 were not intended to be made available to the persons like the petitioners, and the demand of entry tax and penalty was therefore admissible under the statute. The factual statements filed substantially supported the above submissions. I may also make it clear that the decision in these original petitions solely concern about the demand made about the ingot moulds imported by the petitioners. 8.. In order to appreciate the situation arising in the case, it may be necessary that the nature of the business of the petitioners are understood. The process is manufacturing of steel and alloys. Steel scrap and ferro alloys are melted by adding additives and the molten liquid is poured into ingot moulds. This gradually solidifies as M.S. ingots and are later removed. The ingot moulds are of cast iron. After putting them for short such use as receptacles, the ingot moulds which lose shape are on their tu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods as raw materials and (3) the manufactured goods are liable to be taxed under the K.G.S.T. Act/C.S.T. Act. They submit that when the statutory provisions and the Government orders are clear and unambiguous, a demand for tax in a belated occasion is without authority of law and illegal. 12.. The argument is impressive, and if the above position is acceptable, it is submitted that it may not be necessary or required to go into the other contentions urged, viz., the legality of taxation, overlooking the import of article 301 and a requirement for, reading down sections 3 and 4 of the Entry Tax Act. The respective contentions could be subjected to examination in the aforesaid circumstances. 13.. Learned Government Pleader had invited my attention to the judgment of this Court reported in 1995 (TC) 376 (Jose Electricals v. State). It may be necessary to scan through the cited authorities to appreciate the arguments highlighted. In the Jose Electricals case (1995) TC 376, the validity of Act 15 of 1994 had been upheld by a division Bench of this Court. The challenge was on the ground that the Act opposed articles 301 and 304 of the Constitution of India, as it hampers free-flo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government to grant exemptions and the S.R.O. relied was issued in exercise of such powers. What is given by one hand could not have been taken back by the other. They point out that the original section 4(2) of the Act had been deleted, and the present section 4 conferred benefits only on dealers, and the notification was taking note of the impact of amendment brought by section 9 of the Kerala Finance Act, 1996. 17.. I may, at this juncture, point out that the argument to read down section 3 of the Act, in case of liability under the Entry Tax Act is upheld, may not be sustainable, since the entry tax does not amount to a species of sales tax at all. Entry tax is a tax leviable at the point of entry of goods into local area for the purpose of consumption, use or sale. It is not a tax on sale. It is a tax on entry, and the contention that article 301 is attracted arises from their understanding it as not sales tax. As pointed out by the Supreme Court in State of Bihar v. Bihar Chamber of Commerce [1996] 103 STC 1, the petitioners cannot at the same breath say that it is not a tax on entry, but a tax in the nature on sale. Therefore a reading down of the sections does not at all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 STC 239 (SC), that provision of a statute is to be read together and not in isolation is the interpretation to be attempted to. The idea conveyed by the S.R.O. becomes clear and perceivable, when examined in this background. 19.. Petitioners had also brought to my notice, decision of the Supreme Court in Mafatlal Industries Ltd. v. Nadiad Nagar Palika [2000] 118 STC 494; (2000) 3 SCC 1 highlighting the meaning of the words consumption and use. Consumption is explained as a process of conversion of a commodity into a different commercial commodity by subjecting it to some processing. The process of the petitioners well adapt themselves to this test, say excepting the case of the petitioner in O.P. No. 7687 of 2001, where the items assessed are more than one. The rest of the case answer to the eligibility. I, therefore, hold that excepting in the above case (but there also the M.S. ingot are to be brought within the benefits) the demand for entry tax and penalty proceedings complained of was without authority of law. It is so declared. 20.. Before concluding I may also refer to observations from the reported case in R.K. Garg v. Union of India [1982] 133 ITR 239 (SC); (1981) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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