STEEL INDIA Vs. STATE OF BIHAR

JUDGEMENT

(1.) THE petitioner has filed this writ petition challenging the order dated May 15, 1998, passed by the Joint Commissioner of Commercial Taxes (Administration), Dhanbad (respondent No. 3), contained in annexure 14 to the, writ petition, setting aside the certificate exempting it from payment of tax on purchase of raw materials and directing the Bokaro Steel Plant not to issue any tax-free raw material to it, except on receipt of the new/revised exemption certificate. By the said order, which has been passed by him in exercise of revisional power conferred on him under section 46 (4) of the Bihar Finance Act, 1981 (hereinafter referred to as "the Act"), the Joint Commissioner has held that the petitioner is not entitled to exemption from payment of tax on purchase of raw materials under the Government Notification S. O. 95 dated April 4, 1994 (herein-after referred to as "the notification") because it is not manufacturing any finished goods.

(2.) THE Government of Bihar adopted Industrial Policy, 1993, providing incentives to the entrepreneurs to establish new industries. One of the incentives was in the form of exemption from payment of sales tax on purchase of raw materials. Pursuant to the said policy decision the Government issued the notification giving benefit of exemption from payment of tax on purchase of raw materials to 46 industries mentioned in clause 1. Clause 2 of the notification, the English version of which is reproduced below, has specified the raw material with respect to which the exemption from payment of tax can be claimed and has also laid down the conditions subject to which such exemption can be availed of by the industries :

(3.) THE petitioner has not stated the goods, it is manufacturing. In fact it is not manufacturing any finished goods and it is only doing the work of cutting iron coil into smaller pieces. Its allegations that it puts the small size iron sheet in furnace to make the mild so that they may be used for manufacturing various items are factually incorrect, because it does not have any such furnace. In paragraph 33 of the counter-affidavit it has been specifically stated by the respondents that the petitioner has no furnace and the same has not been denied or disputed in the rejoinder affidavit. Cutting of the iron sheet into the small pieces does not amount to manufacture of finished goods. Therefore, the petitioner is, not entitled to exemption from payment of tax on purchase of raw materials. In this connection reference may be made to Commissioner of Sales Tax, Orissa v. Jagannath Cotton Company [1995] 99 STC 83, wherein the Supreme Court while dealing with the similar question has laid down as under :