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TMI Blog2015 (3) TMI 1337X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheme, by paying a tax computed on the basis of the number of specified machines used by him, he would be entitled to an exemption from separate assessment in respect of the M-sand that was produced in the course of production of granite metal. The legislative scheme envisaged the payment of compounded tax by reckoning only certain specified machines, from among the various machines that were used in the production of granite metal, and the VSI/HSI machine was not one of them - The demands made on the petitioners, in connection with a separate assessment of the M-sand or Manufactured sand obtained through the use of VSI/HSI machines, cannot be legally sustained - The notices and orders, impugned in these Writ Petitions, are consequently quashed. Petition allowed. - W.P.(C) No. 19574 of 2014 - - - Dated:- 6-3-2015 - A.K. Jayasankaran Nambiar, J. For Appellant: Raju Joseph, Sr. Advocate, Harisankar V. Menon, Meera V. Menon, N. James Koshy, Mayankutty Mather, Abdul Jawad and R. Leela For Respondents: George Mecheril, Spl. Government Pleader JUDGMENT A.K. Jayasankaran Nambiar, 1. As these Writ Petitions involve a common issue, they are taken up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied for permission to pay tax in accordance with S. 8(b) during the various years under consideration in the Writ Petitions, and paid tax at the appropriate rates during the said years. In accordance with the said provision, therefore, they also became entitled to claim an exemption, from separate assessment, of the Manufactured sand or M-sand that was produced during the course of production of granite metal. The petitioners were, therefore, not paying tax separately on the M-sand that was produced and sold by them. The revenue authorities, however, took objection to the said course of action of the petitioners, for it was found that the petitioners had also installed, in their premises, separate machines such as Vertical Shaft Impactors, for shaping the granite metal coming out of the secondary crushers. It was found that there was considerable amount of M-sand that was produced through the operation of the said machines. The revenue authorities, therefore, proceeded to demand differential tax from the petitioners, in respect of the M-sand that was generated through the operation of those machines on which tax had not been paid under S. 8(b) of the Act. The notices issued to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion capacity, as part of the compounding scheme for granite metal. While the amendment is prospective in its operation, it also suggests that for the prior period, there could not have been a demand for differential tax based on the operation of the said machines. 5. Per contra, the contentions of the respondent State, briefly stated are as follows: * The petitioners had installed Vertical Shaft Impact machines, in their units where they were producing granite metals. In as much as the said machines were not crusher machines, and the benefit of compounding was extended only to dealers producing granite metal with the aid of mechanized crushing machines, the M-sand produced through the use of V.S.I. machines would not qualify for the exemption contemplated in the proviso to S. 8(b). * The M-sand that is produced through the use of the VSI machine cannot be treated as a bi-product that is obtained during the manufacture of granite metal, but is rather a main product, that is obtained only through the use of the VSI machine, and hence separately taxable under the K.V.A.T. Act. It is only the M-sand that is obtained in the process of producing granite metal with the aid of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -sand or Manufactured Sand actually refers to. The petitioners would maintain that it is a bi-product obtained during the manufacture of granite metal, in that it is obtained as a result of shaping the granite metal that comes out of the secondary crushers. It is stated to refer to granite metal of 3mm size and below. In the statement filed on behalf of the respondents, however, the production process of crushed aggregates (granite metal), crusher sand and Manufactured sand is described as follows: 6. The Production processes of crushed aggregates (granite metal), crusher sand and Manufactured sand are as follows: a) Primary Crushing: The primary jaw crusher converts the blasted rubbles (800 mm to 250 mm) from the quarry to smaller size (75 mm to 200 mm) suitable feed material for the secondary crusher to produce aggregates of different size that could be used for construction. The primary crushing is usually a single jaw crusher. Larger size jaw crushers are used in primary crushing to reduce the secondary blasting in quarry operation to minimize the problems caused due to fly rocks. (b) Secondary Crushing: The primary function of the secondary crushing machine is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provided over this vibrating screen and the entire fine particles are washed by this water spray and wash water is collected in the classified fitted below vibrating screen. The output from the VSI/HSI are separated into M. Sand and over size aggregates. This M. Sand is supplied to classifier fitted below the screener and the over sized aggregates are again fed to VSI for regrinding. The classifier is fitted with a screw elevator and the M. Sand discharged to the classifier tank filled with water is supplied to the M. Sand conveyor by this screw conveyor and finally M. Sand is collected in the yard and loaded to trucks. The wash water from the vibrating screens and over flow from the classifier is supplied to a series of settling tanks, where the M. Sand particles in the wash water is settled in respective tanks and over flow water free from M. Sand particles are again pumped for reuse in granite aggregates wetting and M. Sand washing. The settled M. Sand particles are collected periodically and sold as second quality M. sand. 10. It is apparent therefore, that the difference of opinion between the petitioners and the respondents is only with regard to what constitutes M-sand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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