9911796707
TMI Blog1964 (10) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... liaries, oils, lublicants, tallows, starches, woollen clothings, gums, clays, salt beltings; bobbins, shuttles; wooden accessories and other mill stores for manufacturing cloth, yarn, tiles and paints, etc." The Sales Tax Officer granted the certificate as prayed. The certificate of registration was later modified and the following additional categories of goods were specified : "Industrial gases, drawing instruments, photographic materials, packing materials including wood, paper, straw and cardboards, etc., and building materials including iron, steel, cement, lime, fire bricks and refractories." 2.Thereafter by notice dated July 19, 1961, the Sales Tax Officer cancelled the specification in respect of coal and called upon the Company to show cause why the certificate of registration be not amended so as to exclude therefrom "drawing instruments, photographic materials, building materials including iron, steel, cement and lime and certain goods covered under the term electricals." The Company showed cause against the notice and contended that all the articles specified in the certificate were required in the manufacture and processing of goods for sale. By order dated August 9, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) authorising the cancellation of the certificate qua the items which were erroneously included. 5.In the first instance, it must be pointed out that the High Court has, in rejecting the petition, dealt with certain matters which were never in issue between the Company and the Sales Tax Officer. By the order of the Sales Tax Officer "machinery", and "colours and chemicals" were not deleted from the certificate, and the exclusion of "building materials, cement and lime" was expressly restricted so that it was not to operate in respect of cement used in manufacture of tiles for sale. The Sales Tax Officer had rejected the claim of the Company only in respect of drawing instruments, photographic materials, building materials inlcuding lime and cement (except cement used in manufacture of tiles for re-sale), electricals, iron, steel and coal, and it was not open to the High Court to expand the scope of the petition challenging the correctness of the order of the Sales Tax Officer, and to deal with matters which were never in issue or to decide that other categories of goods which the Sales Tax Officer had not ordered to be deleted did not fall within the terms of Section 8(3)(b) read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing of goods for sale or in mining, or in the generation or distribution of electricity or any other form of power." 7.The High Court confirmed the exclusion of drawing and photographic materials on the ground that those materials are required merely in the preparation of designs which though necessary for turning out textile goods cannot be said to be goods intended for use in the manufacture of goods. In the view of the High Court, designing is a process distinct from the process of manufacture, i.e., of making or fabricating raw materials by hand, art or machinery, and work into forms convenient for use. But without a design of the goods sought to be manufactured in a factory which is geared to production of goods of uniform pattern, it would be impossible to attempt manufacture of goods on a commercial scale. The production itself has to be of a set pattern, and deviation from the design prepared would be impermissible. That without the use of drawing and photographic materials, designing of patterns would, if not impossible, be very difficult, is conceded. But the High Court was apparently of the view, and that view is supported by counsel for the Sales Tax Officer, that g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anterior processes as goods used in the manufacture of cloth. To read the expression "in the manufacture" of cloth in that restricted sense, would rise many anomalies. Raw cotton and machinery for weaving cotton and even vehicles for transporting raw and finished goods would qualify under Rule 13, but not spinning machinery, without which the business cannot be carried on. In our judgment, Rule 13 does not justify the importation of restrictions which are not clearly expressed, nor imperatively intended. Goods used as equipment, as tools, as stores, as spare parts, or as accessories in the manufacture or processing of goods, in mining, and in the generation and distribution of power need not, to qualify for special treatment under Section 8(1), be ingredients or commodities used in the processes, nor must they be directly and actually needed for "turning out or the creation of goods." 9. 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, by commercially inexpedient goods intended for use in the process or activity as specified in Rule 13 wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory in which machinery is installed. Whether a building is a "plant" within the meaning of Rule 13, is a difficult question on which no opinion need be expressed. But to qualify for specification under Section 8(3)(b) goods must be intended for use of the nature mentioned in Rule 13, in the manufacture of goods. Building materials used as raw materials for construction of "plant" cannot be said to be used as plant in the manufacture of goods. The Legislature has contemplated that the goods to qualify under Section 8(3)(b) must be intended for use as raw materials or as plant, or as equipment in the manufacture or processing of goods, and it cannot be said that building materials fall within this description. The High Court was, therefore, right in rejecting the claim of the Company in that behalf. 12.The expression "electricals" is somewhat vague. But in a factory manufacturing cotton and other textiles, certain electrical equipment in the present stage of development would be commercially necessary. For instance, without electric lighting it would be very difficult to carry on the business. Again electrical humidifiers, exhaust fans and similar electrical equipment would in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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