GURU REFRACTORIES Vs. STATE OF M P

JUDGEMENT

(1.) PETITIONER a registered partnership firm has filed the instant petition being aggrieved by the order, Annexure P-1 28-10-1997 by which the Deputy Commissioner, Commercial Tax, Gwalior Division, Gwalior in exercise of the powers of the revision has set aside the order passed by the Assessing Officer granting set off to the petitioner to the tune of Rs. 29,845/ -. According to the petitioner, the firm is engaged in the business of processing of cast iron (rough) unfinished pipe fittings and manhole covers, for which it has its unit at Maharaj Pura, Industrial Area, Gwalior. According to the petitioner, the process of manufacturing of cast iron (rough) unfinished fittings which is being undertaken by the petitioner by processing pig iron and cast iron scrap are melted in cupole furnace. After melting in cupole and after adding Ferro Selicon and Lime Stone, the molten iron is poured into different shapes and sizes of moulds and rough castings are obtained and sold at the primary stage to customers without finishing the same. It is stated that various other products are prepared out of melted iron, taken out from the moulds after cooling the casting. No finishing is done before the sale of the goods. The other orders are received from Madhya Pradesh Laghu Udyog Nigam, and supplies are made. Before casting, scrap iron and pig iron are purchased from a registered dealer and before purchasing sales tax is being paid to the registered dealer. After the sale of cast iron fittings, the amount of tax recovered from the purchaser is claimed as set off in terms of Section 8 (1) of the Madhya Pradesh General Sales Tax Act. Accordingly, the assessment order dated 22-7-1995 vide Annexure P-3 was passed by which the set off has been permitted. After the orders were passed, the Commissioner issued a show-cause notice vide Annexure P-5 asking as to why the order should not be reviewed. A perusal of the order indicates that the order has been passed in exercise of the powers vested in him under Section 39 (2) read with Section 62 (3) of the Madhya Pradesh Sales Tax Act, 1994.

(2.) IT may be relevant to mention here that the Madhya Pradesh General Sales Tax Act was repealed in the year 1994 and the Madhya Pradesh Commercial Taxes Adhiniyam, 1994 came into force.

(3.) THE petitioner in its reply to the show-cause notice submitted that it is entitled to the set off as it is purchasing pig iron as raw material from the registered dealers for making cast iron castings the products being sold by them, they are entitled to the benefit of set off in view of the notification of the Government. However, placing reliance on a judgment of the Supreme Court in the case of Bengal Iron Corporation and Anr. v. Commercial Tax Officer and Ors. , 1994 (Suppl.) Vol. 1 SCC 310 and Vasantham Foundry v. Union of India, AIR 1995 SC 2400, the Commissioner held that the petitioner is not entitled to set off and directed for recovery of the amount.