Case: State Of Bihar  Vs. Universal Hydrocarbons Co.Ltd. &amp; Anr Etc

Respondent No. 1 is a private company. The respondent No. 2 is one of therespondents purchases raw petroleum product. This product undergoes a process of manufacture in the factory. The ultimate commodity is calcined petroleum coke (hereinafter referred to "C.P.C.").The respondent was subject to sales tax under the Bihar Finance Act, 1981 (hereinafter referred to as "the Finance Act") on the sale of C.P.C. as well as the Central Sales Tax Act, 1956 (hereinafter referred to as "the Act"). The respondents stated that he missed to claim the adjustments of sales tax paid on the purchase of raw materials in the returns filed for the months of July and August, 1990. The admitted tax due thereon was paid. In terms of section15(b) of the Act, the respondent was entitled to a refund of sales tax paid under the Finance Act. While filing the return for the month of September, 1990, the respondent did not pay the admitted tax of Rs. 1, 96, 072 but claimed refund of Rs. 5, 22, 728 which would be adjusted towards the admitted tax of Rs. 1, 96, 072 and the balance of Rs. 3, 26, 656 was to be refunded on account of Bihar sales tax paid on the direct raw materials purchased for the months of July, August and September, 1990.The application for refund was considered by the Assistant Commissioner and the same was dismissed since the claim for refund was against law. By order dated November 8, 1990, a penalty of Rs. 9, 852.85 was imposed. Against this order, respondent preferred C.W.J.C. No. 7549 of 1990.Thereafter the respondent filed an application of refund for Rs. 19, 22, 340.12 for the periodand Rs. 17, 65, 987.01 for the periodunder section15(b) of the Act read with rule 35 of Bihar Sales Tax Rules, 1983, By notice dated February 2, 1991, the dealer was called upon to substantiate his claim. While that application was pending, he preferred C.W.J.C. No. 5813 of 1991 before the High Court of Patna. While disposing of the writ petition, the High Court ordered on September 5, 1991, to consider the claim of refund and pass orders. On a consideration of the matter, the Joint Commissioner by order dated December 16, 1991, rejected the claim. Thereupon, the respondent preferred C.W.J.C. No. 415 of 1992.Both C.W.J.C. Nos. 7549 of 1990 and 415 of 1992 came to be disposed of under a common order dated April 10, 1992 which is impugned in this civil appeal. Accordingly, the writ petitions were allowed.The High Court set aside the findings of the Joint Commissioner in so far as he held that R.P.C. and C.P.C. though different commercial commodities, are declared goods under section14(ia) of the Act, the petition was liable to be rejected on the ground that raw petroleum coke has undergone a process of manufacture. On this line of reasoning, the High Court took the view that C.P.C. is a form of R.P.C. and, therefore, petitioners before it, would be entitled to exemption reimbursement under section15(b) of the Act.

Court's reasoning:
In the instant case, the respondent purchases R.P.C. and after subjecting that to a process of manufacture C.P.C. is produced. When exemption was sought to be claimed on the ground that both these items will fall under section14(ia) of the Act, that was rejected by the JointHigh Court in the impugned judgment considered the scope of the phrase "that is to say". Thereafter it proceeded to hold that C.P.C. is a form of R.P.C. and, therefore, the exemption under section15(b) of the Act would be available.We have already, referred to entry relating to coke occurring under section14(ia) of the Act. When the entry says "coke in all its forms", there is no possibility of bringing coke of different forms except under this entry. The Joint Commissioner has clearly held that both raw petroleum coke and calcined petroleum coke, though different commercial commodities are "declared goods". However, he held that by process of manufacture, raw petroleum coke has lost its original identity and has resulted in a new product, namely, calcined petroleum coke. Therefore, according to him, the benefit under section15(b) of the Act could be availed of only if the same goods are subject tolevy of tax. He opined the use of words "such goods" under section15(b) of the Act are of significance.We are totally unable to accept this line of reasoning. Once the entry is "coke in all its forms" irrespective of the fact raw petroleum coke loses its original identity or in the process of manufacture calcined petroleum coke is produced, cannot take calcined petroleum coke out of the purview of this entry. In more or less identical situation, this Court held in India Carbons case that petroleum coke is one form of coal governed by the expression "coal" within sectionHigh Court was of the view that the word coal includes coke in all its forms in clause (i) of section14 of the Central Act and must be taken to mean coke derived from coal. In other words it must be coke which had been derived or acquired from coal by following the usual process of heating or burning. The contention, therefore, or the appellant was negatived that petroleum coke was covered by the aforesaid provision of the Central Act.This decision fully supports the respondent. The fact that calcined petroleum coke is a different commodity is of little consequence, In interpreting the scope of hides and skins which fall under section14(iii) of the Act, this Court in Mahi Traders case held at pageshe position here is entirely different. There is no such phrase under section14(ia) of the Act. In the case ofoccurring under section14(iv) of the Act, similar phraseology, namely, "that is to say"vital distinction cannot be lost sight of. Therefore, the argument of the appellant has to be rejected.