Proprietor - Smt. Rita Adhlaklia v. StateofChhattisgarh

Proprietor - Smt. Rita Adhlaklia 197, Light Industrial Area BhUasi

6. Khedia Industries, Proprietor - Shrinivas Khedia, A, Market Sector-lBhilai

7. B.W.L. Ltd., Represented H.P. iUietawt, Director, IndustrialAreaBhilal —PETITIONERS VERSUS

1. StateofChhattisgarh Through Secretary, Ffaiance & Commercial Tax Department, Mantralaya, Raipur (C.G.j o IK^ •"**"' !Ur • --< 11111 .'»; ./

2. Commissioner, Commercial Tax, Raipur (C.Cr.)

3. Assistaht Commissioner, Commercial Tax, Raipur (C.G.)

4. Assistant Commissloner, Commercial Tax, Durg (C.G.) ~

5. Asslstant Commlssioncr, .,- ^ ^— CommercialTax.Bhilai (C.O.) - RESPONDENTS FEFmoy UNDER ARTICLE 22f6/227 GF THE CONSTITUTION OF INDIA 2T6/S '.-/ HIGH COURT OFCHHATTISGARH AT BILASPUR DIVISION BENCH CORAB/I: HON'BLE SHRI YATINDRA SINGH. C.J, HON'BLE SHRI R.S. SHARMA. J. Writ Petition No. 3047 of 2003 Petitioners DM Engineering Limited and Othi s. Respondents State of Chhattisgarh and Others VERSUS Writ Petition under Articles 226/227 of the Constitution c India Appearance: Shri Ashish Shrivastava, counsel for the P itioners. Shri AS Kachhawaha, Deputy Advocate G leral for the State / Respondents. ORDER (27m November, 2012)

1. This is the writ petition challenging the notificatii i dated

11.08.2003 issued by the State Government under Section 2 ) of the Chhattisgarh Vanijyik Kar Adhiniyam, 1994 (the Act) by \i lich the notification dated 30.06.2003 was rescinded with effect from 01

7.2003.

3. We have heard counsel for the parties. Section 2 (o) of the Act defines the word 'manufacture' It is as follows: "Manufacture" includes any process or manner of produc ig, 'ut collecting, extracting, preparing or making any goods, does not include such manufacture or manufactu 19 process as may be notified," The State Government inifiaNy 4. 01.04.1995 detailing the process that shall not be tre ed as It st ed that manufacture for the purpos§,s of Section 2(o) of the Act. issued a notificatio the processing of others, drawing of steel wires out of steel rods shall not be eated as iron rods and steels a irt than, manufacture. It meant that the drawing of the steel wires froi the steel rodswas manufacture.

5. By the notification dated 30.06.2003, the drawing of ; sel wires out of the steel rods was deleted from the notification dated O 04.1995. The effect of this notification was drawing of steel wires from teel rods was not treated as a manufacture. This notification was mac effective from 1.7.2003.

6. By the impugned notification dated 11.08.2003 the rtification dated 30.06.2003 was deleted with effect from 1.7.2003. Th result is that drawing of steel wires from steel rods continued to be mai ifacturing process. Submission of the Counsel

7. The counsel for the Petitioners relies upon Collector if Central Excise Vs. Technoweld Industries, reported in 2003 (155) EL 209 (SC) (the Technoweld case); Commissioner of Central Excise, II Commissionerate Vs. Tarpaulin International, reported in (20 3) 9 SCC 103 (theTarpaulin case);Commissioner of Sales Tax, U.P. Vs. al Kunwa Stone Crusher (P) Ltd. reported in (2000)3 SCC 525 (the Sto i-Crusher case) and submits that: hennai (i) (iii) (iii) (iv) Commercial tax can be charged only on different i mmercial goods. However, ifthegoodscontinueto bethesame, commercial tax can be charged on purchase/ sale; Iron rods and iron wires are commercially one len no and the same goods. On the purchase/ sale of an iron rod, thec nmercial taxhas been charged. Now, no commercial tax can ! ; charged on the sale/purchase of the iron wires. The rescinding of the notification

01.07.20 i has no effect as iron wires and iron rods are one product; In any case the notifications are prospective in ope tion. The earlier notification rescind cannot t i .14.8.2003 ^. ^ '-s '<s. ^K. SSSff7^!^ i3 t' R '%t. "'^&. %'lhJ^ notification dated 30.6.2003 with retrospective eff ;t namely w.e.f. 01.07.2003.

8. It is not disputed that commercial tax is charged on c< imercially different goods. same thing, then no further commercial tax can be charged. However, In case the iron rods and iron wires are o 3 and the according to the Deputy Advocate General; • The iron wires are produced by a manufacturing proces from iron rods; • • Iron rods and iron wires are commercially different market if one goes to buy an iron rod, he cannot be giv< and vice versa; )oods. In iron wire Iron wires cannot be exempted from commercial tax me ily on the ground that the commercial tax has been paid on the irc rods. The first Three Submissions

9. The Technoweld case as well as the Tarpaulin case a se under the Central Excise Act. The definition of the word 'Manufacl •e' in the Central Excise Act and the Act is different and different prino es apply under them in determining whether the process is a manufact e or not. These cases are not relevant in deciding the controversy in issi '.

10. The Stone Crusher case arose out of the U.P. Sales T ;Act. In this case the question was whether the stone, chips and gif same thing as the stone boulder from which they were n de after are the crushing the stone boulders.

11. The aforesaid case arose out of assessment proceedin the Tribunal had recorded a finding that proceeding, commercially different goods to be identified differently for the [ It sales tax. This finding was also upheld by the High Court. reason, the Supreme Court had said that no sales tax is pays le as no different goods came into existence. rere not > for this rpose of In that ••7 /'

12. In the present case, the commercial tax authorities. the question has not beengone into by the same, we see no In view of justification to decide the first three submissions. and has to be decided on evidence. It is a question of fact

13. In case any assessment is being made against the Petitioner, it is always open to the Petitioner to raise the question that the goods are commercially one and the same and there is no manufacture. The Fourth Submission

14. The notifications are delegated legislation and come into force from the date they are issued; they do not have any retrospective operation.

15. In view of above, the notification dated 11.08.2003 cannot rescind the notification dated 30.06.2003 with retrospective effect. However it can be effective only from 11.08.2003 i.e. from the period 01.07.2003 till 10.08.2003 the drawing of steel wires from steel rods can not be treated as manufacture.

16. Nevertheless, we clarify that the aforesaid proposition will not apply to any assessment already finalised; no review may be filed on this ground. This may only apply only in respect of pending assessments.

17. With the aforesaid observations, the writ petition is decided. Sd/- Chlef Justice 1 IV/*-' i!;nmi Sd/- R.S.Sharma Judge