AMBA CARBONISATION PVT LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) THE petitioner is a Company incorporated under the provisions of the Companies Act. It set up a unit for manufacture of special smokeless fuel (for short, 'ssf Coke') at Gidha, Koilwar, District bhujpur. The industry is said to have been established by the petitioner pursuant to the industrial policy framed by the State of Bihar promising various types of incentives, inter alia, to the new industry. According to the petitioner, it has been granted tax exemption certificate from payment of sales tax on the sale of its finished product viz. , SSF Coke under the notification dated 22nd December, 1995 issued in exercise of the power under Section 7 (3) of the Bihar Finance Act, 1981 (for short, Act, 1981 ). That the coal/ coke is a notified commodity under the provisions of Act, 1981 for the purpose of levy as well as tax is not in dispute. The exemption granted to the petitioner from payment of sales tax is for a period of ten years from the date of commencement of the production i. e. from 31-8-2000 to 31-8-2010.

(2.) THE Bihar Tax on Entry of Goods into local Areas for Consumption, Use or Sale therein Act, 1993 (for short, 'the Entry Tax Act')came into force in the year, 1993, Section 3 of the Entry Tax Act is a charging section and it provide for tax on entry of scheduled goods into a local area for consumption, use or sale therein. The Entry Tax act has been amended by Amending Acts in the years 2001, 2004 and 2006. That coal/ coke is notified goods under the Entry Tax act is also not in dispute. The petitioner claims that the raw-material i. e. coal imported from the collieries outside the State of Bihar by it for manufacture of SSF Coke cannot be subjected to the entry tax under the Entry Tax Act as the petitioner is exempted from payment of sales tax on its finished product i. e. , SSF Coke. By means of this writ petition, the petitioner, therefore, has prayed for issuance of a direction to the sales tax authorities of State of Bihar not to charge any entry tax from the petitioner on entry of coal imported by the petitioner from outside the State. The relief is principally founded on the notification dated 22nd of december, 1995 issued by the State Government of Bihar in exercise of the power conferred by clause (b) of sub-section (3) of section 7 of the Act, 1981 and the judgment of the Supreme Court in the case of associated Cement Companies Ltd. v. State of bihar (2004) 7 SCC 642.

(3.) THE Act, 1981 is an Act relating to levy of tax on the sale and purchase of goods in the State of Bihar. Section 3 of the Act, 1981 is the charging section which, interalia, creates a liability of sales tax under the act. The taxable event is the sales or purchase of goods. Section 7 empowers the State government to exempt sales tax on sale of any goods or class or description of goods by issuing a notification subject to the conditions or restriction as may be deemed proper.