Madhya Pradesh High Court
Hindustan Copper Limited Represented ... vs The Additional Commissioner on 16 April, 2026
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO. 2026:MPHC-JBP:29956
1 WP-1098-2004
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE PRADEEP MITTAL
ON THE 16th OF APRIL, 2026
WRIT PETITION No. 1098 of 2004
HINDUSTAN COPPER LIMITED REPRESENTED BY SHRI O.P.
CHUGH HINDUSTAN COPPER LTD MALAJKHAND
Versus
THE ADDITIONAL COMMISSIONER AND OTHERS
Appearance:
Shri Abhijeet Shrivastava with Shri Amit Shrivastava - Advocate for
petitioner.
Shri Rajvardhan Dutt Padraha - Government Advocate for
respondent/State.
ORDER
Per: Justice Pradeep Mittal This writ petition under Article 226 Constitution of India, arises out of the Consolidated Revision Order dated 22.10.2002 passed by the Additional Commissioner, Commercial Tax, Jabalpur in Revision Cases No. 41/R/2001, 38/R/2001, 40/R/2001 and 39/R/2001 for the account years 1985-86, 1986- 87, 1988-89 and 1992-93 (Annexure P-7), upholding the levy of entry tax on Grinding Media Balls and Rubber Liners brought by the petitioner into the local area of Malajkhand, District Balaghat, under the M.P. Sthaniya Kshetra Me Mal Ke Pravesh Per Kar Adhiniyam, 1976 (hereinafter referred to as 'the Signature Not Verified Signed by: MANVENDRA SINGH PARIHAR Signing time: 21-04-2026 11:10:22 NEUTRAL CITATION NO. 2026:MPHC-JBP:29956 2 WP-1098-2004 Entry Tax Act'), treating these items as 'incidental goods' within the meaning of Section 2(hh) of the M.P. General Sales Tax Act, 1958 (hereinafter referred to as 'the GST Act').
2. The petitioner, Hindustan Copper Limited, is a Government of India company engaged in copper ore mining at Malajkhand, District Balaghat. It operates a plant for processing copper ore into copper concentrate. The copper ore, after being crushed through primary gyratory and secondary crushers, is conveyed to a Ball Mill where it is ground into fine powder. In the Ball Mill, Grinding Media Balls of 80 mm diameter are fitted with the aid of Rubber Liners. The ground ore is thereafter processed with chemicals and water to produce copper concentrate. It is undisputed that the Ball Mill is a machine. The Grinding Media Balls and Rubber Liners are components without which the Ball Mill cannot function. Both items have a working life of approximately six months, after which they are replaced.
3. The assessment cases pertaining to the aforesaid years have had a chequered history. At each stage, from the original assessment to the repeated remands in revision, the taxing authorities have taken the position that notwithstanding that Grinding Media Balls and Rubber Liners form an integral part of the Ball Mill, they are directly used 'in' the manufacturing process, undergo deterioration, and must therefore be classified as 'incidental goods' attracting entry tax at 1%. The impugned consolidated revision order dated 22.10.2002 reaffirms this position after the revisional authority personally visited the plant and inspected the operation of the Ball Mill. The petitioner challenges this order primarily on the ground that these items Signature Not Verified Signed by: MANVENDRA SINGH PARIHAR Signing time: 21-04-2026 11:10:22 NEUTRAL CITATION NO. 2026:MPHC-JBP:29956 3 WP-1098-2004 constitute plant and machinery and cannot be classified as incidental goods.
4. The short but important question that falls for consideration in this petition is: Whether Grinding Media Balls and Rubber Liners, which are fitted inside the Ball Mill as its constituent parts to enable the grinding of copper ore, are 'incidental goods' within the meaning of Section 2(hh) of the GST Act, or whether they form part of 'plant and machinery' and are thus outside the scope of levy of entry tax as incidental goods under the Entry Tax Act?
5. Section 2(hh) of the M.P. General Sales Tax Act, 1958 defines 'incidental goods' as under:
"Incidental goods means goods other than raw material and packing material referred to in clause (b) of sub-section (3) of section 8 of the Central Sales Tax Act, 1956, for use by the registered dealer in the manufacture or processing of goods or in mining or in the generation of or distribution of electricity or any other form of power."
6. Section 2(l) of the GST Act defines 'raw material' as: "an article used as an ingredient in any manufactured goods or an article consumed in the process of manufacture and includes fuel and lubricants required for the process of manufacture."
7. Thus, under the definition of 'incidental goods', goods which are raw material or packing material are excluded. The goods in question Grinding Media Balls and Rubber Liners are admittedly not raw material (they do not form part of the final product, i.e. copper concentrate, nor are they ingredients therein) and they are not packing material. The question Signature Not Verified Signed by: MANVENDRA SINGH PARIHAR Signing time: 21-04-2026 11:10:22 NEUTRAL CITATION NO. 2026:MPHC-JBP:29956 4 WP-1098-2004 therefore is whether they fall within the residual category of 'incidental goods' used in the manufacturing process, or whether they are plant and machinery, which stand altogether outside the two categories defined above.
8. A Constitution Bench of the Madhya Pradesh High Court, in the celebrated decision in Commissioner of Sales Tax, M.P. v. Vippy Solvex Products Pvt. Ltd., settled the fundamental distinction that governs this field. It was laid down that plant and machinery are not 'incidental goods' because they are not used 'in' the process of manufacture in the sense contemplated by the definition, rather, they are goods used 'for' carrying out manufacture. Manufacturing is conducted through and by means of plant and machinery, plant and machinery themselves are the instrumentalities of production and not goods consumed or used in the course of manufacturing. This distinction between goods used 'for' manufacture (plant and machinery) and goods used 'in' manufacture (incidental goods) is the cornerstone of the jurisprudence under the Entry Tax Act in Madhya Pradesh. The revisional authority, while acknowledging the force of this decision, sought to distinguish it by observing that although Grinding Media Balls and Rubber Liners are parts of the Ball Mill, they are directly used 'in' the manufacturing process and undergo deterioration. With respect, this reasoning is erroneous.
9. It is an admitted and undisputed fact on the record including as found by the revisional authority himself after physical inspection of the plant that the Ball Mill cannot operate and cannot perform its function of grinding copper ore unless the Grinding Media Balls are fitted inside it along with the Rubber Liners. The Grinding Media Balls and the Rubber Liners are Signature Not Verified Signed by: MANVENDRA SINGH PARIHAR Signing time: 21-04-2026 11:10:22 NEUTRAL CITATION NO. 2026:MPHC-JBP:29956 5 WP-1098-2004 not extraneous or secondary adjuncts to the Ball Mill, they are the very means by which the Ball Mill grinds the ore. In other words, without these components in position, the Ball Mill is an incomplete and inoperable structure it cannot grind anything. This conclusively establishes that Grinding Media Balls and Rubber Liners are integral constituent parts of the Ball Mill machine.
10. The Privy Council in Corporation of Calcutta v. Cossipore and Chitpur Municipality, AIR 1922 PC 27 , observed that parts or members of a machine which, when assembled, form a complete machine, may also be styled 'machinery'. The Gujarat High Court in The State of Gujarat v. Minu Chemical Pvt. Ltd. [1982] 50 STC 63, which was extensively cited before us, affirmed drawing from Webster's Dictionary and the Privy Council dictum that the word 'machinery' includes 'the component parts of a complex machine'. This Court respectfully adopts and applies this principle.
11. The mere fact that Grinding Media Balls and Rubber Liners undergo wear and tear and must be replaced every six months does not alter their character as components of the Ball Mill machine. Many components of heavy industrial machines refractory linings in furnaces, electrodes in electric arc furnaces, dies in presses are consumable in nature, require periodic replacement, and yet remain integral parts of the respective machines. The replacement cycle is a function of operational wear, not a criterion that changes the legal character of the component.
12. In Deputy Commissioner of Sales Tax v. Pio Food Packers , the Supreme Court laid down that where there is no essential difference in Signature Not Verified Signed by: MANVENDRA SINGH PARIHAR Signing time: 21-04-2026 11:10:22 NEUTRAL CITATION NO. 2026:MPHC-JBP:29956 6 WP-1098-2004 identity between the original commodity and the processed article, it cannot be said that one commodity has been consumed in the manufacture of another. This principle highlights that mere use or involvement of an article in a process does not, by itself, render it a consumable or distinct commodity unless it loses its identity in the course of such use. When read in conjunction with the settled position that components essential to the functioning of a machine partake the character of the machine itself, it becomes evident that integral parts of machinery, which enable the very operation of the machine, cannot be classified as 'incidental goods' merely because they come into direct contact with the material being processed or are subject to wear and tear.
13. From the material on record, the following uncontroverted technical facts emerge regarding the nature and function of grinding media balls and rubber liners in the ball mill:
(i) The ball mill is an indisputably recognised piece of industrial machinery used for grinding crushed ore into fine powder as an essential step in the manufacture of copper concentrate.
(ii) Grinding media balls of 80 mm diameter are fitted inside the ball mill cylinder. The grinding action being the very purpose of the machine is achieved through the collision and friction between the rotating steel balls and the ore material. Without balls of the correct size and specification, the ball mill cannot perform its primary function of reducing particle size.
(iii) Rubber liners are fitted on the interior shell of the ball mill. They serve the dual function of: (a) protecting the steel shell from wear and impact Signature Not Verified Signed by: MANVENDRA SINGH PARIHAR Signing time: 21-04-2026 11:10:22 NEUTRAL CITATION NO. 2026:MPHC-JBP:29956 7 WP-1098-2004 damage caused by the balls; and (b) controlling the trajectory of the grinding media so as to ensure optimum grinding efficiency. Without rubber liners, the grinding media cannot achieve the proper 'charge trajectory' and the mill shell would rapidly deteriorate.
(iv) The ball mill becomes functional and operative only after the grinding media balls and rubber liners are fitted to it. Without these components, the ball mill is a mere hollow cylinder incapable of performing any industrial function.
14. The expression 'incidental goods' in the context of entry tax legislation has been judicially interpreted to mean goods that are secondary, non-essential, or peripheral to the manufacturing process as distinguished from goods that are integral, essential, and constitutive of the machine or plant itself. The question is not whether the goods are consumed or worn out in the process of use, but whether they form an integral and essential part of the plant or machinery, even where individual items, taken in isolation, may not constitute machinery, they would nonetheless fall within the ambit of 'machinery' if they form integral parts of a larger processing unit. It was emphasised that such components, though lacking independent mechanical contrivance, are essential to the functioning of the complete system. plants and machinery are often assembled by procuring different components from different sources. Therefore, parts which go into the making of a composite processing unit must be regarded as machinery if they are indispensable for its operation, notwithstanding that they are not complete machines by themselves. Applying the aforesaid principles to the present case, it is Signature Not Verified Signed by: MANVENDRA SINGH PARIHAR Signing time: 21-04-2026 11:10:22 NEUTRAL CITATION NO. 2026:MPHC-JBP:29956 8 WP-1098-2004 evident that components which are integral to the functioning of a plant or processing unit, and without which the machinery would be incomplete or inoperative, must be treated as 'plant and machinery'. The decisive test is functional integrality and indispensability to the operation of the machinery as a whole.
15. The revisional authority has fallen into a manifest error in treating the direct physical involvement of Grinding Media Balls and Rubber Liners in the grinding process as determinative of their classification as 'incidental goods'. This approach erroneously equates functional participation with legal character. The Ball Mill, as a complete unit, performs the act of grinding, and the said items discharge that function only as integral and inseparable components of the machine, not as independent goods deployed in the manufacturing process. If such a test were to be accepted, every active component of machinery which comes into contact with the material being processed would stand reduced to 'incidental goods', thereby obliterating the well-recognized distinction between goods used 'for' manufacture (plant and machinery) and goods used 'in' manufacture. Such an interpretation would defeat the legislative scheme and cannot be sustained.
16. The impugned order is also inconsistent with the binding revision order dated 29.03.1997 passed by the predecessor of Respondent No. 1, which had, after personal inspection of the same plant, categorically held that Grinding Media Balls and Rubber Liners are plant and machinery. While earlier revision orders do not create res judicata in the technical sense for subsequent assessment years, the complete absence of any new fact or Signature Not Verified Signed by: MANVENDRA SINGH PARIHAR Signing time: 21-04-2026 11:10:22 NEUTRAL CITATION NO. 2026:MPHC-JBP:29956 9 WP-1098-2004 circumstance distinguishing the subsequent years renders the reversal of that finding arbitrary and unsustainable.
17. In view of the above findings, the levy of entry tax on Grinding Media Balls and Rubber Liners being held unsustainable, the consequential levy of penalty under Section 17(3) of the Entry Tax Act also cannot be sustained and is liable to be set aside.
18. In view of the principal finding recorded above, it is not necessary to adjudicate upon the petitioner's alternative submission that if these goods are treated as consumed in the manufacturing process, they would be raw material taxable at a concessional rate of 0.5% under the proviso to Section 4 of the Entry Tax Act.
19. For the reasons recorded above, this writ petition is allowed. The consolidated revision order dated 22.10.2002 (Annexure P-7), and the underlying assessment orders to the extent they levy entry tax at 1% on Grinding Media Balls and Rubber Liners treating them as 'incidental goods', and also the penalty levied under Section 17(3), are hereby quashed and set aside.
20. Grinding Media Balls and Rubber Liners used in the Ball Mill at the petitioner's copper processing plant at Malajkhand, District Balaghat, constitute integral parts of plant and machinery and are not 'incidental goods' within the meaning of Section 2(hh) of the M.P. General Sales Tax Act, 1958 read with the Entry Tax Act, 1976. Accordingly, no entry tax is leviable on these goods under the impugned assessment orders.
21. The respondents shall give effect to this order and, if any Signature Not Verified Signed by: MANVENDRA SINGH PARIHAR Signing time: 21-04-2026 11:10:22 NEUTRAL CITATION NO. 2026:MPHC-JBP:29956 10 WP-1098-2004 amounts have been deposited pursuant to the impugned demand, the same shall be refunded to the petitioner within a period of three months from the date of this order.
No order as to costs.
(VIVEK RUSIA) (PRADEEP MITTAL)
JUDGE JUDGE
Praveen
Signature Not Verified
Signed by: MANVENDRA
SINGH PARIHAR
Signing time: 21-04-2026
11:10:22