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TMI Blog2019 (1) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... ok at the definition under Section 2(d). However, when the use is in the manufacturing or processing of goods for sale or in the telecommunication network or in mining or in the generation or distribution of electricity or any other form of power; there could be no restrictive meaning applied to the term "goods for sale". The "goods for sale" in the second limb of the provision has to be taken as referring to a common category, which is exigible to tax under one or other enactment within a State in the Country. Concessional rate of duty - inter-State purchases - migration to GST Regime - whether after the introduction of the goods and services tax enactments and the restrictive meaning of goods adopted under the CST Act, the petitioner/assessee can be allowed to have continued; HSD, in his certificate of registration under the CST Act, enabling him to claim concessional rate? - Held that:- The provisions are in pari materia in so far as the legislation of the State of Kerala and Haryana. The reference herein above is to the Haryana Goods & Services Tax Act, the provisions of which are similar to the KG&ST Act; both having adopted mutatis mutandis the provisions of the CG&ST Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s-all fuels and deleted the said entry from the certificate of registration granted under the CST Act. The returns filed in Form No.10 of the Kerala Value Added Tax Act, 2003(for brevity KVAT Act ) for the months of July, September and October 2017 were hence rejected. 3. The assessee was in first appeal which was rejected by Annexure B. A second appeal also proved unsuccessful. The Tribunal looked at the definition of goods as amended and now existing under Section 2(d) of the CST Act as also the distinction between mining and quarrying as understood in common parlance. The assessee had claimed that a company Indian Rare Earths Ltd., was allowed to be continued to have the benefit under the CST Act of a concessional rate for inter-State purchases of HSD fuel used in their mining activity. The Tribunal looked at the dictionary meaning of 'mining' and 'minerals' and found that mining involves getting valuable or useful mineral from the earth; for example coal, diamond and gold. A mineral was given the meaning tin, salt or sulphur found naturally in rock and earth. It was hence held that quarrying granite metals is entirely different from mining of minerals. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re confined to the States. The revocation of HSD purchased by the petitioner inter-State, from the CST registration certificate, thus dis-entitling the petitioner from concessional rate,is illegal; is the compelling argument of the learned Counsel for the petitioner. 5. The learned Senior Government Pleader however, seeks to draw a distinction in the operation of mines and quarries as has been found by the Tribunal. The learned Government Pleader refers to the Mines Act, 1952 to specifically point out that Section 2(j) defines mine and clause (kk) defines open cast working, the latter of which is considered to be a quarrying operation as distinguished from mining. Though the open cast work is also included under the definition of mine, there is a distinction in the operations carried on. A mining activity necessarily requires excavation from under the soil, of valuable minerals whereas quarry, especially that of granite metals, requires only an open cast working. The decision of the Hon'ble Supreme Court in M aheshwari Fish Seed Farm v. Tamil Nadu Electricity Board and others [(2004) 4 SCC 705] is relied on to argue that with respect to exemption, the provisions have to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble Supreme Court relied on the decision in CIT West Bengal Vs. Benoy Kumar Sahas [1957] 32 ITR 466 (SC) which interpreted the term agriculture as occurring in Section 2(1) of the Income Tax Act, 1961 defining 'agricultural income'. It was held that the term need not be confined to production of food grains and food products but could include all products of land involving human labour. The interpretation should be one advancing the object of the legislation and in the context of free power enabled to agriculture, it was held so : 13. The relevant entry in the Act as its historical background shows was intended to provide electricity at concessional rates or free of any charge to the farmers by dividing them into classes such as small farmers and other farmers. A farmer would be an agriculturist in the traditional sense and narrow meaning of the term. A person engaged in aquaculture or fish farming would not be called a farmer. Neither the legislature while enacting the Schedule to the Act as it originally stood nor the State Government issuing the notification amending the Schedule can be attributed with the intention that they had intended to make available electric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t all commend us to adopt such a distinction insofar as the fiscal legislation of CST is concerned. In fact such a course, of adopting the distinction under the regulatory enactments, to the fiscal enactment has been deprecated by the Hon'ble Supreme Court in Maheswari Fish Seeds Farm . 11. As found by us, the regulatory enactments treated it as two different activities, for the purpose of demarcating the power of the Central and State Governments, as also to apply different safety standards; which objects do not have any relevance as far as the fiscal legislation is concerned. The mineral extracted, whether it be on an open cast working or excavation from under the surface soil, does not govern the taxing power. The decisions under the said enactments also indicate that but for the issuance of permits, the activities of mining and quarrying have been judicially recognized as one and the same. We refer to the decision of the Honoruable Supreme Court in D.K.Trivedi and Sons (supra) , which found that quarry leases are, therefore, included in the term mining leases , in para 52 of the said decision. We also notice the decisions in AIR 1976 SC 1393 [Bhagwan Dass v. State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods are now under the Union and State legislation levying tax on both goods and services. The object and purpose of the provision of concession of inter-state trade of goods now retained under the general sales tax regime does not at all alter. This is more so since by introduction of the goods and services tax regime there is levied a uniform tax on the goods coming thereunder and the taxation also is destination based, in so far as inter-state transactions are concerned. However with respect to goods retained under the general sales tax law the taxation remains to be origin based. 13. Herein HSD which is retained under the general sales tax laws would be taxable at the State of purchase and the intention in providing for a concession under Section 8 of the CST Act, is to provide a manufacturer or reseller to pay the concessional rate in the State, from which the transaction originates and then again subject it to resale or manufacture, in the destination State where there is a further tax levied on resale or sale of the manufactured product. Nothing revloves on whether the activity is an open cast work or underground excavation. Either way, the product or mineral excavated is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other mineral substances are taken by digging, duistinguished from the pits from which stones only are taken, and which are called quarries . 18. We do not seek or find any assistance from the aforestated decisions since we are called upon to interpret the word mining as it appears in a fiscal legislation on the basis of the intention with which the same has been included in the provision which provided for a concessional rate. The intention is to provide the concessional rate in inter-state trade where the specific goods are purchased for re-sale or for use inter alia in the manufacture or processing of goods, in mining, telecommunications and generation or distribution of electricity or any other form of power. The essential object is to lessen the tax burden when there is a further sale by itself or after manufacture or processing. In mining on the excavation of minerals, they are taxable at the next instance of sale. We also noticed from the Mines Act and the MMDR Act that though mines and quarries are treated differently for regulatory purposes, both are similar activities involving excavation; be it open cast working or subterranean tunneling. In the Indian context ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with a memo as document No.7. 21. In, Carpo Power Ltd. the question raised was the issuance of C-forms in respect of natural gas purchased by the assessee, for generation of electricity. The specific contention taken by the State of Haryana was similar to that taken by the State of Kerala before us. We refer to paragraphs 17 to 20 of the aforesaid judgment: 17. The definition of goods' in section 2(52) of the CGST Act is very wide. It includes every kind of movable property, excluding money and securities but including actionable claims, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply. Section 9(2) of the CGST Act provides that petroleum crude, high speed diesel, motor spirit, natural gas and aviation turbine fuel shall be levied tax under the CGST Act from the date as notified by the Government on the recommendations of the Council. Sections 2(52) and 9 (2) of the HGST Act are similar to Sections 2(52) and 9 (2) of the CGST Act. It is pertinent to note that till date, the Government has not issued a notification under either the CGST Act or the HGST Act. Hen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime being in force in the state or any part thereof providing levy of taxes on the sale of goods generally or expressly on any specified goods. The KG ST Act and CG ST Act are the taxation enactments in force in the State of Kerala with respect to sale of goods, the incidence of levy being now on the supply of such goods. 24. We also notice that Carpo Power Ltd. has been approved by the Honorable Supreme Court insofar as the Special Leave Petition having been dismissed as revealed from document No.9. We, hence, are of the opinion that the assesseerevision petitioner is entitled to get the concessional rate as available under the CST Act for the HSD used in its quarrying activity which is confined to the activity of operation of machinery for the purposes of quarrying. 25. The learned Senior Government Pleader raised a further argument that the assessee did not have a KGST registration for the purpose of claiming such exemption. We do not think such an argument can be raised at this stage and we also find the argument to be without any basis. It is an admitted fact that the assessee was having a CST registration and was enabled the concessional rate for the HSD used in its m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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