ASHIRWAD ISPAT UDYOG Vs. STATE LEVEL COMMITTEE

JUDGEMENT

(1.) The principal judgment and order under appeal and the orders following it, also under appeal, were passed by a Division Bench of the High Court of Madhya Pradesh on writ petitions filed by the appellants.

(2.) Very briefly stated, the facts are these:The appellants purchase iron and steel scrap from the Bhilai Steel Plant and other parties. The scrap, in the form of defective angles, flats, channels, tubes and coils is of very considerable size. The appellants cut down the scrap so that it may be utilised by rolling mills and forging parts manufacturers, gear and pinion manufacturers and dye block manufacturers. The question is whether such cutting down, with the help of shearing machines and glass cutting, of the scrap of widths of 2' to 5' and thickness upto 2.5" into strips of the size of 2" to 4" is a process of "manufacture" within the special definition of that word in section 2(j) of the Madhya Pradesh General Sales Tax Act. The definition reads thus:

(3.) The State Government issued a notification on 16th October, 1986 under Section 12 of the said Act granting exemption to dealers, who were registered under the said Act and had established eligible industrial units in any district in the State and held a provisional or permanent eligibility certificate issued by an officer authorised for the purpose, from payment of tax to the extent stated therein. Dealers registered with the Industries Department of the Government of Madhya Pradesh who had set up small scale industrial units and who had made a capital investment in fixed assets above Rs. 10 lakhs were exempted from the whole of the tax if they had set up industries within the areas categorised therein for the periods set out thereagainst. The exemption was available subject to the condition, inter alia, that it "shall be available only in respect of the sales of the goods which the dealer is licensed to manufacture and which are manufactured by him as also waste and by-products obtained in the course of manufacture."