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TMI Blog2018 (11) TMI 1360X X X X Extracts X X X X X X X X Extracts X X X X ..... the connected crushing operations. To fuel its machinery and vehicles, the Company uses High Speed Diesel(HSD). So the Company claims concession for the HSD and wants to download CForms. Access denied, the Company has filed this writ petition. Submissions: Petitioner's: 3. Sri Philip J. Vettickattu, the learned counsel for the petitioner, strenuously contends that the Company can claim tax concession on the HSD it purchases. According to him, Section 8 of the Central Sales Tax Act, 1956 ("CST Act") enables the Company to claim that advantage. 4. As Section 8 of the Act refers only to mining, Sri Vettickattu has taken me through a few lexical provisions of certain statutes: Section 3(d) of the Mines and Minerals (Development and Regulation) Act, Section 2(j) of the Mines Act, 1952, and also the Kerala Minor Mineral Concession Rules, 2015. 5. Sri Vettickattu has taken pains to explain that the fuel consumed for the machinery and the motor vehicles must alike be treated as the goods enjoying the tax benefit under Section 8 of the CST Act. To support his contentions he has relied on Indian Copper Corporation Ltd., v. Commissioner of Commercial Taxes AIR 1965 SC 891, J.K. Cotton ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of oil, Hindustan Petroleum Corporation has allowed it to have its own filling station. 11. So the Company Wanted to take advantage of Section 8 of the CST Act. For that purpose, the Company wanted to download C forms from KVATIS, the department's online portal. Access denied, the Company submitted applications in November and December 2017, requesting the authorities to let the Company to access the C forms. Though departmentally the Company's applications were considered, eventually nothing came out of it. Aggrieved, the Company has filed this Writ petition. 12. I reckon much depends on what Section 8 of the CST Act says. The provision, to the extent relevant, reads: Section 8. Rates of tax on sales in the course of inter-State trade or commerce:- (1) Every dealer, who in the course of inter-State trade or commerce, sells to a registered dealer goods of the description referred to in sub-section (3), shall be liable to pay tax under this Act, which shall be three per cent of his turnover or at the rate applicable to the sale or purchase of such goods inside the appropriate State under the sales tax law of that State, whichever is lower: . . . (2) . . . (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined operations, including surface and underground attack and ore treatment." 17. The Shorter Oxford English Dictionary defines "quarry" as an open-air excavation from which stone for building, etc., is or has been obtained by cutting, blasting, etc. Any place from which stone may be extracted. The same dictionary defines "mine" as an excavation or a system of excavations in the earth for the extraction of metal, metallic ore, coal, salt, etc. Lexically, true, both "quarrying" and "mining" are distinct activities with different objectives. But the question is, does this distinction survive legislatively. In Section 8 of the CST Act, only mining is found mentioned, though. 18. In Bihar Mines Ltd., of the Constitution Bench, Bachawat J., wrote a concurring judgment, supplementing the lead judgment by Raghubar Dayal, J. His Lordship has elaborated on "mining" and "winning minerals." That discussion may not help here. Legislative Definitions: 19. Section 2 (j) (iv) of the Mines Act, 1952, defines "mine" to mean "any excavation where any operation for the purpose of searching for or obtaining minerals has been or is being carried on." And this excavation includes (i) all borings, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he legislative history and also the federal distribution of powers on the subject: mining. Referring to the States' powers, it observes that under Section 15(1) of the 1957 Act various State Governments have made rules in respect of minor minerals. Although these rules vary from State to State, there are certain broad features present in all of them. The majority of States provide for two types of mineral concessions: a lease on tenure basis and a permit to extract a specified quantity of a minor mineral. In all the States, the rules provide for the grant of a lease for a particular term, varying from one year to twenty years. These leases are variously described in different State rules as "mining lease", "quarrying lease" and "quarry lease", and are similar to the mining leases granted under the Mineral Concession Rules, 1960. 26. Then, D.K. Trivedi has paid particular attention to the Gujarat Minor Mineral Rules, in the statutory backdrop of Section 15(2). The term "minerals", as we have already noted, is defined by Clause (a) of Section 3 as including "all minerals except mineral oils". This definition would thus include, according to D.K. Trivedi, minerals which are minor min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ude mining operations by any means; that is, mining lease, quarrying lease, mining permit, and so on. Therefore, the irresistible conclusion is that mining referred to in Section 8 of the CST Act encompasses the quarrying as well. And the Company, here, is quarrying. Fuel for Mining or Quarrying Operations: Does the fuel for the transport vehicles, too, fall within Section 8 of the CST Act? 30. The petitioner Company is a dealer under Section 8 of the CST Act. That assertion admits of no contradiction. But the Company claims benefits under Section 8 of the CST Act. The question is whether the fuel it uses for its machinery and vehicles qualifies for that benefit, as we now accept that the Company is in mining activity. 31. 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 in the telecommunications network or in mining, or in the generation or distribution of electricity or any other form of power. 32. In Indian Copp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o on. By Rule 13, the Central Government has prescribed the goods referred to in s. 8(3)(b) : such goods must be intended for use in the manufacture or processing of goods for sale or in mining or generation or distribution of power, and the intended use of the goods must be as specified in Rule 13. It is true that under Rule 13, read with Section 8(3)(b), mere intention to use the goods in the manufacture or processing of goods for sale will not be a sufficient ground for specification; the intention must be to use the goods as raw materials as processing materials, machinery, plant, equipment, tools, stores, spare parts, accessories, fuel or lubricants. Then the Court has held: "In our judgment if a process or activity is so integrally related to the ultimate manufacture of goods so that without that process or activity manufacture may, even if theoretically possible, be commercially inexpedient, goods intended for use in the process or activity as specified in Rule 13 will qualify for special treatment. This is not to say that every category of goods "in connection with" manufacture of or "in relation to" manufacture, or which facilitates the conduct of the business of manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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