9911796707
TMI Blog1999 (3) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... exure-5 series; (2) Writ of certiorari quashing the decision of opposite party No. 4 vide order dated April 8, 1996, rejecting the petition of the petitioner for exemption certificate under section 206C of the Act; (3) Writ of mandamus declaring that screening process adopted by the petitioner amounts to processing within the proviso to section 206C of the Act and to direct the opposite party No. 5 to grant such certificate so that the opposite party No. 6 agents/servants/branch officers will not realize income-tax at the point of purchase of tendu leaves; (4) Such other order/direction/declaration/writ as this court may deem proper in the interest of justice..." The petitioner is an assessee under the Income-tax Act and carries on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner submitted an application before opposite party No. 4 for grant of exemption certificate/non-deduction certificate so that the Orissa Forest Development Corporation would not realise income-tax at the time of purchase. Opposite party No. 4 had granted such certificate. Copy of such certificate is annexed as annexure-1 to the writ petition. The petitioner claims that again he applied for such a certificate on April 3, 1996, for the period April 1, 1996 to March 31, 1997. Copy of such application is annexed as annexure-2 to the writ petition. By order dated April 8, 1996, opposite party No. 4 rejected the application of the petitioner dated April 3, 1996. The grounds of rejection of such certificate are as follows : (a) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96, and January 17, 1996, the Central Board of Direct Taxes has reversed its view and issued circulars vide File No. 149/160/95-TPL directing that the operations of drying, sprinkling of water, bundling of kendu leaves, etc., do not result in any change in the products. Therefore, it cannot be equated with "processing". Accordingly, the provisions of section 206C shall be applicable to the case of kendu leaves traders. It is submitted by the petitioner that the view of the apex court is clear as per the decision reported in Bengal Iron Corporation v. Commercial Tax Officer, AIR 1993 SC 2414; [1993] 90 STC 47. The relevant portion is quoted as follows (headnote of AIR 1993 SC) : "Clarifications/circulars issued by the Central Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to be dismissed. We have heard learned counsel of both sides. The only dispute that arises in the writ petition is with regard to the interpretation of the word "processing" and, whether the activities undertaken to make kendu leaves saleable and marketable condition amount to processing, as mentioned in section 206C of the Income-tax Act. A large number of reported decisions have been cited from the Bar. The following cases have been referred to in support of the case of the petitioner : Commissioner of Sales Tax v. Bist (D. S.) [1979] 44 STC 392 (SC), CWT v. Syed Amjad Ali [1993] 202 ITR 19 (All), CIT v. London Star Diamond Co. (I.) Ltd. [1995] 213 ITR 517 (Bom), CIT v. Lakhtar Cotton Press Co. (Pvt.) Ltd. [1983] 142 ITR 503 (G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r preparation for the market', it would amount to processing of the commodity within the meaning of section 8(3)(b) and rule 13. The nature and extent of processing may vary from case to case, In one case the processing may be slight and in another it may be extensive; but with each process suffered, the commodity would experience a change. Wherever a commodity undergoes a change as a result of some operation performed on it or in regard to it, such operation would amount to processing of the commodity. The nature and extent of the change is not material. The question is not whether there is manual application of energy or there is application of mechanical force. Whatever be the means employed for the purpose of carrying out the operation, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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