Case: M/S Boc India Ltd Vs. State Of Jharkhand

ingredients of the last mentioned class qualify themselves as and are eligible to be called "Raw-Material" for the end- product. One of the valid tests, in our opinion, could be that the ingredient should be so essential for the chemical processes culminating in the emergence of the desired end-product, that having regard to its importance in and indispensability for the process, it could be said that its very consumption on burning-up is its quality and value as raw-materials. In such a case, the relevant test is not its absence in the end-product, but the dependence of the end-product for its essential presence at the delivery end of the process. The ingredient goes into the making of the end-product in the sense that without its absence the presence of the end-product, as such, is rendered impossible. This quality should coalesce with the requirement that its utilisation is in the manufacturing process as distinct from the manufacturing apparatus." 21. Yet again, in the case of Tata Engineering & Locomotive Company Limited vs. State of Bihar & Anr. [(1994) 6 SCC 479] , this Court while interpreting the provisions of Section 13(1)(b) of the Act itself, held that batteries, tyres and tubes which are by themselves finished products would be raw-material when they are fitted in a vehicle, stating: "What requires consideration, therefore, is whether items such as tyres, tubes, batteries etc. purchased by the appellant for use in the manufacture of vehicles which are otherwise finished products could avail of concessional rate of tax at 1%. That would depend on the construction and understanding of the expression industrial raw-material (inputs) used in the Notification. The word raw-material has not been defined in the Act. It has, therefore, to be understood in the ordinary and well accepted connotation of it in the common parlance of the persons who deal with it. According to dictionary, it means something which is used for manufacturing or producing the good. The ordinary common sense understanding of it is that it is something from which another new or distinct commodity can be produced." 22. Mr. B.B. Singh, however, rightly pointed out that the question as to whether the oxygen gas is a raw material or not had not been raised before the Assessing Authority. For the first time, before this Court, a question of fact has been raised. We cannot, for arriving at such a finding as to whether the same is correct or not, rely on Wikipedia alone, on which reliance has been placed. {See Commissioner of Customs, Bangalore vs. ACER India (P) Ltd. [(2008) 1 SCC 382] and Ponds India Limited vs. Commissioner of Trade Tax, Lucknow [(2008) 8 SCC 369] 23. We do not know what are the manufacturing processes involved and what role oxygen gas has to play in the matter of manufacturing of steel. It is also not possible for us to base our decision solely on the basis of a diagram contained in Encyclopaedia Britannica. Whether oxygen gas can be considered to be a raw material is essentially a question of fact. Evidence is required to be adduced. Such evidence although may be in possession of TISCO. In the event, such a question is raised by the assessee, namely, BOC, the Assessing Authority must go therein. For the purpose of claiming exemption from payment of tax and/or special rate of tax applicable to a particular gas or commodity or goods, the assessee itself must bring on record sufficient materials to show that it comes within the purview of the notification. Both in M/s Ballarpur Industries Ltd (supra) and Tata Engineering & Locomotive Company Limited [supra], the question as to whether sodium sulphate and/or batteries, tyres, tubes were raw materials or not could be determined by this Court as such a question had been raised by the Assessing Authority.24. We may, however, must place on record that we do not agree with Mr. B.B. Singh that the principle that as a procedure has been prescribed in the statute, the same must be followed or no benefit would be available to the assessee as is said to have been held by this Court in Narbada Prasad vs. Chhagan Lal & Ors. [(1969) 1 SCR 499] and in Kunwar Pal Singh (dead) by L.Rs. etc. etc. vs. State of U.P. & ors. [(2007) 5 SCC 85] . The said decisions cannot have any application in the facts of the present case. In Narbada Prasad vs. Chhagan Lal & Ors [supra], this Court was dealing with a matter concerning Representation of the People Act in regard to filing of an election petition as in the election petition essential facts as specified therein was required to be pleaded in the manner laid down therein. In Kunwar Pal Singh (dead) by L.Rs. etc. etc. vs. State of U.P. & ors. [(2007) 5 SCC 85] , this Court was dealing with the provisions of the Land Acquisition Act. Keeping in view the fact that the same was barred by limitation, this Court held: "The principle is well settled that where any statutory provision provides a particular manner for doing a particular act, then, theat thing or act must be done in accordance with the manner prescribed therefor in the Act." 25. For the self same reasons, we are of the opinion, that it is not necessary to go into the question as to whether a person even if he proves that he inadvertently did not claim the benefit of a notification would depend upon the facts and circumstances of each case as no such rule in absolute terms can be laid down therefor. 26. We may, however, notice that this Court in Share Medical Care vs. Union of India & ors. [(2007) 4 SCC 573] has opined as under: "15. From the above decisions, it is clear that even if an applicant does not claim benefit under a particular notification at the initial stage, he is not debarred, prohibited or estopped from claiming such benefit at a later stage."

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]16. BOC admittedly is the manufacturer of oxygen gas. It is a dealer within the meaning of the provisions of the Act being a supplier of its product. It, thus, comes within the purview of `dealer as contained in Section 2(e) of the Act as it carries on the business of buying, selling, supplying or distributing goods for cash or for deferred payment or for commission, remuneration or other valuable consideration. It is an assessee. It even as an agent of the State is bound to collect taxes on its behalf and deposit the same in accordance with law. Non-compliance thereof would lead to penal actions. Even in the demand made by the Deputy Commissioner, Commercial Taxes, Jamshedpur Circle, Jamshedpur dated 22.7.2005 it was threatened with proceedings for recovery of the differential amount unless it produced the evidence of deposit thereof.17. Thus, a demand has been made on BOC. Hence, the opinion of the High Court that it did not have any locus standi to maintain the writ application cannot be accepted. It may be true that the consumer of oxygen gas is TISCO. It was also entitled to purchase the said goods at a concessional rate. If the material is used for manufacture, the rate of tax is three per cent whereas if the material is used as raw material for processing and/or manufacturing of the end product, indisputably, the rate of tax would be two per cent. Ultimately, BOC may be entitled to recover the differential amount of tax from TISCO, but, the same by itself would not mean that it is a busybody. Not only the penal proceedings but also other proceedings could be initiated against it for non-deposit of the aggregate amount of tax within the prescribed period. If an order of assessment is passed against the assessee, the only remedy before it is to prefer an appeal/revision in terms of the provisions of the Act. Thus, in our opinion, it was a person aggrieved to maintain a writ application.Mr. B.B. Singh, however, rightly pointed out that the question as to whether the oxygen gas is a raw material or not had not been raised before the Assessing Authority. For the first time, before this Court, a question of fact has been raised. We cannot, for arriving at such a finding as to whether the same is correct or not, rely on Wikipedia alone, on which reliance has been placed.We do not know what are the manufacturing processes involved and what role oxygen gas has to play in the matter of manufacturing of steel. It is also not possible for us to base our decision solely on the basis of a diagram contained in Encyclopaedia Britannica. Whether oxygen gas can be considered to be a raw material is essentially a question of fact. Evidence is required to be adduced. Such evidence although may be in possession of TISCO. In the event, such a question is raised by the assessee, namely, BOC, the Assessing Authority must go therein. For the purpose of claiming exemption from payment of tax and/or special rate of tax applicable to a particular gas or commodity or goods, the assessee itself must bring on record sufficient materials to show that it comes within the purview of the notification. Both in M/s Ballarpur Industries Ltd (supra) and Tata Engineering & Locomotive Company Limited [supra], the question as to whether sodium sulphate and/or batteries, tyres, tubes were raw materials or not could be determined by this Court as such a question had been raised by the Assessing Authority.24. We may, however, must place on record that we do not agree with Mr. B.B. Singh that the principle that as a procedure has been prescribed in the statute, the same must be followed or no benefit would be available to the assessee as is said to have been held by this Court in Narbada Prasad vs. Chhagan Lal & Ors. [(1969) 1 SCR 499] and in Kunwar Pal Singh (dead) by L.Rs. etc. etc. vs. State of U.P. & ors. [(2007) 5 SCC 85] . The said decisions cannot have any application in the facts of the present case. In Narbada Prasad vs. Chhagan Lal & Ors [supra], this Court was dealing with a matter concerning Representation of the People Act in regard to filing of an election petition as in the election petition essential facts as specified therein was required to be pleaded in the manner laid down therein.For the self same reasons, we are of the opinion, that it is not necessary to go into the question as to whether a person even if he proves that he inadvertently did not claim the benefit of a notification would depend upon the facts and circumstances of each case as no such rule in absolute terms can be laid down therefor.