HARINAGAR SUGAR MILLS LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) The petitioners in both the cases, which are companies registered under the Indian Companies Act and are engaged in the manufacture and sale of sugar, have filed the present writ applications for quashing the notification dated 25-7-2001, issued by the Government in exercise of poser under Sub-section (1) of Section 3 of the Bihar Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1993 (hereinafter referred to as 'the Act') in respect of the scheduled goods listed therein so far as the same is applicable to the industries of the petitioners. Later on, they challenged the vires of the amended provisions of the said Act brought by Bihar Act 10 of 2001. The copies of the amendments brought in the Act as well as the notification issued under Sub-section (1) of Section 3 of the Act have been annexed in both the writ applications. However, hereinafter reference will be made to the annexures appended in C.W.J.C. No. 6540 of 2002.

(2.) The factual matrix lies in a narrow compass. The petitioner-companies are engaged in the business of manufacturing sugar by vacuum pan process. It is registered under the provisions of the Central Sales Tax Act and also under the provisions of the Bihar Finance Act. The raw material used in the sugar factory is sugarcane besides other raw materials like lime, sulphar, etc. The Companies purchase certain manufactured goods namely goods made out from iron and steel, pipes, electrical fittings, coal, paints etc. from outside the State of Bihar in course of interstate sale after payment of Central Sales, Tax for the purposes of fitting or fixing or installation in the factory or factory premise and which ultimately become fixed capital assets of the companies. The aforesaid purchased goods are neither consumed nor used as raw material for the manufacture of new commodity nor for sale to any other person. The said goods were not included in the schedule of the Act leviable to pay entry tax. Later on, twelve items including the goods purchased by the petitioners have been included in the schedule by the Amending Act and a notification under Section 3 (1) of the Act has also been issued prescribing rates of entry tax, restrictions and conditions regarding the same.

(3.) The assertion of the petitioners is that the action of the authorities after the amendment asking the petitioners to pay entry tax is impermissible in law as the petitioners are not liable to pay entry tax on those goods for the reason that those goods are neither sold nor consumed nor used by them as raw materials for the purposes of making any commercial commodity.