STATE OF ORISSA Vs. IPITATA REFRACTORIES LTD

JUDGEMENT

(1.) ON being moved by the Revenue by an application under section 24 (1) of the Orissa Sales Tax Act, 1947 (in short, "the Act"), the Orissa Sales Tax Tribunal (in short, "the Tribunal") has referred the following question for opinion of this Court : Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the fire bricks are heating equipments or spares, components or accessories, part of the plant, and then in allowing the assessee's claim of concessional rate of tax on its sales of such fire bricks to M/s. National Aluminium Company Limited (smelter division) ?

(2.) THE background facts giving rise to the question are as under : M/s. Ipitata Refractories Limited (hereinafter referred to as "the assessee") sold fire bricks worth Rs. 54,98,175. 58 to M/s. National Aluminium Company Limited (in short "the NALCO") (described hereinafter as "purchasing dealer") for the assessment year 1984-85. Tax at concessional rate of 4 per cent was collected and deductions were claimed on the basis of declarations issued in form IV by the purchasing dealer. The goods sold were "fire bricks and mortar". The claim was disallowed by the assessing officer on the ground that the purchasing dealer was not authorised to purchase refractories (fire bricks and mortar) as such items were not indicated in its certificate of registration. The assessee's stand was based on serial No. 39 of the list of taxable goods which refers to goods purchased by a dealer which are intended to be used in the manufacture or processing or packing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power. The assessing officer was of the view that refractories are in the nature of consumables, and therefore, the same should have been specifically mentioned in the certificate of registration so as to entitle the purchasing dealer to avail the concession. Accordingly tax at the rate of 12 per cent was levied. The conclusion of the assessing officer was assailed in appeal before the Assistant Commissioner of Sales Tax, Cuttack II Range, Cuttack. Before the said authority it was submitted that the purchasing dealer was entitled to terms of its certificate of registration to purchase heating equipments, accessories, components, spares, etc. The first appellate authority did not accept the contention. The matter was carried in appeal before the Tribunal. A Full Bench of the Tribunal heard the appeal. It considered the utility of fire bricks in the process of manufacture of aluminium. The assessee, as appears from the records of the Tribunal, submitted that "fire clay" is a kind of clay capable of resisting intense heat used for making fire bricks, furnace linings, etc. "fire bricks" are those which are made to withstand great heat, used to line fire places, furnaces. Furnace is a plant for melting metal. The Tribunal noticed that there was no controversy on the point that the fire bricks have capacity to resist heat of 1400 degree centigrade which the ordinary brick cannot withstand and that those were required for lining the furnace which is a part and parcel of the main plant of the smelter division of the purchasing dealer. The certificate of registration of the purchasing dealer was referred to. It was noticed that the purchasing dealer was entitled to purchase "all kinds of plant, machinery and heating components and spares for use in manufacture of aluminia". Considering the use of fire bricks it was held that it was one of the component parts of smelter machines used in the process of manufacture of aluminium and is encovered by "heating equipment, or spares, components or accessories, part of the plant". Accordingly it was held that the concessional rate of tax was rightly claimed by the assessee, and the appeal was allowed.

(3.) "equipment" as defined in Corpus Juris Secundum, reads as follows :