DEPUTY COMMISSIONERS Vs. INDIAN RARE EARTHS LTD

JUDGEMENT

(1.) THE Deputy Commissioner of Sales Tax is the revision petitioner in all these six cases. By a common order, six tax appeals had been disposed of by the Kerala Sales Tax Appellate Tribunal, Trivandrum. Four of them were the appeals filed by a Government of India Company, Indian Rare Earths Limited and two others by a State Government enterprise, Kerala Minerals and Metas Limited. The revisions, because of their identical nature could appropriately be disposed of by a common Judgment. The cases related to the assessment pertaining to years 1983 -84 to 1986 -87 and the issue concerns the rate of tax that could be assessed in respect of their products, as to whether they were taxable under entry 71 of the 1st schedule of the K. G. S. T. Act, at 8 per cent or only at the general rates of 4 per cent/5 per cent as unclassified items.

(2.) THE products sold by the companies were minerals, such as Ilmenite, Monazite, Sillimanite, Rutile, Zircon, Garnet, etc. Entry 71 as at the relevant time came in the group heading chemical elements and compounds. The entry stood shifted as item 42 from 1st July 1987, and again changed in 2000 which strictly are not relevant for the purpose of these cases. The tax rates for the group as it stood at the relevant time could be tabulated and extracted as following:

(3.) THE appellate authority found that the assessees arc dealers in minerals. While considering the question, the authority had went into the details of the processes. The sands collected from beach of Chavara was a compendium of minerals. The mining as above was on the basis of licences issued under the Mines and Mineral(Regulation)and Development Act, on payment of royalty. After being brought down to factory from the slurry the minerals were separated, by process of washing, froth floatation, sieving, magnetic picking, etc. ( but not any chemical processing ). Concentrators were used for heavy mineral concentrates, and they were again cleaned through an upgrading plant. After a process of drying, exploiting on the different properties of the minerals, separation was carried out, and the final products segregated. Taking note of the process of winning them and the end products, the appellate authority had concurred with the view of the assessing authority, by holding that the minerals collected was not sold in the same term and the item sold cannot be considered as sand as seen in the beach and in its natural form.