M/S Ntpc Ltd. A Government Of India ... vs Divisional Deputy Commissioner on 13 April, 2023

[Cites 36, Cited by 6]

Madhya Pradesh High Court

M/S Ntpc Ltd. A Government Of India ... vs Divisional Deputy Commissioner on 13 April, 2023

Author: Sheel Nagu

Bench: Sheel Nagu, Virender Singh

IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE SHEEL NAGU
&
HON'BLE SHRI JUSTICE VIRENDER SINGH
WP. No.16965 of 2016

BETWEEN:-

M.B POWER LIMITED REG. OFFICE
HOTEL GOVINDAM COMPLEX KOTMA
ROAD ANUPPUR (MADHYA PRADESH
.....PETITIONER

(BY SHRI A.K. SHRIVASTAVA, SHRI G.N.
PUROHIT, SHRI NAMAN NAGRATH, SENIOR
ADVOCATES WITH MS UMA PARASHAR,
SHRI ESHAN TRIPATHI, SHRI VARUN
CHOPRA, SHRI SANJAY K. AGRAWAL, MS.
ANKITA KHARE, SHRI SARTHAK NEMA,
SHRI VAIBHAV MISHRA, SHRI KAUSTUBH
SHANKAR JHA, SHRI ANSHUMAN SINGH,
SHRI ANUJ SHRIVASTAVA, SHRI VASU JAIN,
SHRI VIRAJ SHANKAR JHA, SHRI GREESHM
JAIN AND SHRI ABHIJEET SHRIVASTAVA,
ADVOCATES)

AND

1. THE STATE OF MADHYA PRADESH
THROUGH PRINCIPAL SECRETARY DEPT
OF COMMERCE INDUSTRIES AND
EMPLOYMENT MANTRALAYA, VALLABH
BHAWAN, BHOPAL (MADHYA PRADESH)
- 2 -

2. PRINCIPAL SECRETARY COMMERCIAL
TAXES DEPARTMENT MANTRALAY
BHOPAL (MADHYA PRADESH)

3. COMMISSIONER INDUSTRIES
DIRECTORATE OF INDUSTRIES
VINDHYACHAL BHAWAN JAIL ROAD
ARERA HILLS (MADHYA PRADESH)

4. DIVISIONAL DEPUTY COMMISSIONER
COMMERCIAL TAXES DEPARTMENT
JABALPUR DIVIN. NO. 2 JABALPUR
(MADHYA PRADESH)

5. GENERAL MANAGER M.P. TRADE AND
INVESTMENT FACILITATION
CORPORATION LTD. SECRETARIAF FOR
SINGLE WINDO SYSTEM CEDAMP
BHAWAN 16 A ARERA HILL (MADHYA
PRADESH)
.....RESPONDENTS

(BY SHRI ASHISH ANAND BERNARD,
ADDITIONAL ADVOCATE GENERAL WITH
SHRI PIYUSH DHARMADHIKARI AND SHRI
A.D. BAJPAI, GOVERNMENT ADVOCATES)

WP. No.2034 of 2015

BETWEEN:-

M/S NATIONAL THERMAL POWER
CORPORATION LTD. REPRESENTED BY
SHRI H.K. SANDHIR EXECUTIVE
DIRECTOR VSTPP VINDHYA NAGAR
SINGRAULI (MADHYA PRADESH)
.....PETITIONER

(BY SHRI A.K. SHRIVASTAVA, SHRI G.N.
PUROHIT, SHRI NAMAN NAGRATH, SENIOR
ADVOCATES WITH MS UMA PARASHAR,
- 3 -

SHRI ESHAN TRIPATHI, SHRI VARUN
CHOPRA, SHRI SANJAY K. AGRAWAL, MS.
ANKITA KHARE, SHRI SARTHAK NEMA,
SHRI VAIBHAV MISHRA, SHRI KAUSTUBH
SHANKAR JHA, SHRI ANSHUMAN SINGH,
SHRI ANUJ SHRIVASTAVA, SHRI VASU JAIN,
SHRI VIRAJ SHANKAR JHA, SHRI GREESHM
JAIN AND SHRI ABHIJEET SHRIVASTAVA,
ADVOCATES)

AND

1. DIVISIONAL DEPUTY COMMISSIONER
SATNA (MADHYA PRADESH)

2. PRINCIPAL SECRETARY COMMERCIAL
TAXES DEPARTMENT VALLABH BHAWAN,
BHOPAL (MADHYA PRADESH)

3. COMMERCIAL TAX OFFICER
COMMERCIAL TAXES DEPARTMENT
WAIDHAN, DISTT. SINGROULI (MADHYA
PRADESH)

.....RESPONDENTS

(BY SHRI ASHISH ANAND BERNARD, ADDITIONAL ADVOCATE
GENERAL WITH SHRI PIYUSH DHARMADHIKARI AND SHRI
A.D. BAJPAI, GOVERNMENT ADVOCATES)

WP. No.2380 of 2015

BETWEEN:-

M/S NATIONAL THERMAL POWER
CORPORATION LTD. THROUGH SHRI
H.K. SANDHIR S/O G.D. SANDHIR
EXECUTIVE DIRECTOR NTPC LTD.
- 4 -

VSTPP VINDHYA NAGAR SINGRAULI
(MADHYA PRADESH)
.....PETITIONER

AND

1. DIVISIONAL DEPUTY COMMISSIONER
COMMERCIAL TAX, SATNA (MADHYA
PRADESH)

2. THE PRINCIPAL SECRETARY
COMMERCIAL TAX DEPARTMENT
VALLABH BHAWAN BHOPAL (MADHYA
PRADESH)

3. COMMERIAL TAX OFFICER ... WAIDHAN
DISTT. SINGRAULI (MADHYA PRADESH)

.....RESPONDENTS

(BY SHRI ASHISH ANAND BERNARD,
ADDITIONAL ADVOCATE GENERAL WITH
SHRI PIYUSH DHARMADHIKARI AND SHRI
A.D. BAJPAI, GOVERNMENT ADVOCATES)
- 5 -

WP. No.2552 of 2015

BETWEEN:-

M/S NATIONAL THERMAL POWER
CORPORATION LTD. SHRI H.K.
SANDHIR NTPC S/O G.D. SANDHIR
EXECUTIVE DIRECTOR NTPC LTD.
VINDHYA NAGAR SINGRAULI
(MADHYA PRADESH)
.....PETITIONER

AND

1. DIVISIONAL DEPUTY COMMISSIONER
INFORMATION SATNA (MADHYA
PRADESH)

2. PRINCIPAL SECRETARY COMMERCIAL
TAXES DEPARTMENT VALLABH BHAWAN,
BHOPAL (MADHYA PRADESH)

3. COMMERCIAL TAX OFFICER
COMMERCIAL TAXES DEPARTMENT
WAIDHAN, DISTT. SINGROULI (MADHYA
PRADESH)

.....RESPONDENTS
- 6 -

(BY SHRI ASHISH ANAND BERNARD,
ADDITIONAL ADVOCATE GENERAL WITH
SHRI PIYUSH DHARMADHIKARI AND SHRI
A.D. BAJPAI, GOVERNMENT ADVOCATES)

WP. No.3109 of 2015

BETWEEN:-

M/S NATIONAL THERMAL POWER
CORPORATION LTD THR. SHRI H.K.
SANDHIR S/O G.D. SANDHIR
EXECUTIVE DIRECTOR NTPC LTD.
VSTPP. VINDHYA NAGAR SINGRAULI
(MADHYA PRADESH)
.....PETITIONER

AND

1. DIVISIONAL DEPUTY COMMISSIONER
COMMERCIAL TAX OFFICER SATNA
(MADHYA PRADESH)

2. PRINCIPAL SECRETARY COMMERCIAL
TAXES DEPARTMENT VALLABH BHAWAN
BHOPAL (MADHYA PRADESH)
- 7 -

3. COMMERCIAL TAX OFFICER . WAIDHAN,
DISTT. SINGROULI (MADHYA PRADESH)

.....RESPONDENTS

(BY SHRI ASHISH ANAND BERNARD,
ADDITIONAL ADVOCATE GENERAL WITH
SHRI PIYUSH DHARMADHIKARI AND SHRI
A.D. BAJPAI, GOVERNMENT ADVOCATES)

WP. No.3112 of 2015

BETWEEN:-

M/S NATIONAL THERMAL POWER
CORPORATION LTD. THR. SHRI H.K.
SANDHIR S/O G.D. SANDHIR
EXECUTIVE DIRECTOR NTPC LTD.
VSTPP VINDHYA NAGAR SINGRAULI
(MADHYA PRADESH)
.....PETITIONER

AND

1. DIVISIONAL DEPUTY COMMISSIONER
COMMERCIAL TAX OFFICER SATNA
(MADHYA PRADESH)
- 8 -

2. PRINCIPAL SECRETARY STATE OF
MADHYA PRADESH, VALLABH BHAWAN
BHOPAL (MADHYA PRADESH)

3. COMMERCIAL TAX OFFICER . WAIDHAN,
DISTT. SINGROULI (MADHYA PRADESH)

.....RESPONDENTS

(BY SHRI ASHISH ANAND BERNARD,
ADDITIONAL ADVOCATE GENERAL WITH
SHRI PIYUSH DHARMADHIKARI AND SHRI
A.D. BAJPAI, GOVERNMENT ADVOCATES)

WP. No.3655 of 2015

BETWEEN:-

M/S NATIONAL THERMAL POWER
CORPORATION LTD. SHRI H.K.
SANDHIR S/O G.D. SHANDHIR
EXECUTIVE DIRECTOR NTPC LTD.
VSTPP VINDHYA NAGAR SINGRAULI
(MADHYA PRADESH)
.....PETITIONER

AND
- 9 -

1. DIVISIONAL DEPUTY COMMISSIONER
COMMERCIAL TAX OFFICER SATNA
(MADHYA PRADESH)

2. PRINCIPAL SECRETARY, COMMERCIAL
TAX DEPARTMENT, STATE OF MADHYA
PRADESH, VALLABH BHAWAN
BHOPAL (MADHYA PRADESH)

3. COMMERCIAL TAX OFFICER. WAIDHAN,
DISTT. SINGROULI (MADHYA PRADESH)

.....RESPONDENTS

(BY SHRI ASHISH ANAND BERNARD,
ADDITIONAL ADVOCATE GENERAL WITH
SHRI PIYUSH DHARMADHIKARI AND SHRI
A.D. BAJPAI, GOVERNMENT ADVOCATES)

WP. No.4064 of 2015

BETWEEN:-

M/S NTPC LTD. REPRESENTED BY SHRI
SUNSANTA KUMAR ROY EXECUTIVE
DIRECTOR NTPC LTD., VSTPP,
VINDHYA NAGAR SINGRUALI
(MADHYA PRADESH)
.....PETITIONER

JAIN AND SHRI ABHIJEET SHRIVASTAVA,
ADVOCATES)

AND

1. DIVISIONAL DEPUTY COMMISSIONER
COMMERCIAL TAX OFFICER SATNA
(MADHYA PRADESH)

2. PRINCIPAL SECRETARY, COMMERCIAL
TAX DEPARTMENT, VALLABH BHAWAN
BHOPAL (MADHYA PRADESH)

3. COMMERCIAL TAX OFFICER
COMMERCIAL TAXES DEPARTMENT
SINGRAULI (MADHYA PRADESH)

.....RESPONDENTS

(BY SHRI ASHISH ANAND BERNARD,
ADDITIONAL ADVOCATE GENERAL WITH
SHRI PIYUSH DHARMADHIKARI AND SHRI
A.D. BAJPAI, GOVERNMENT ADVOCATES)

WP. No.16453 of 2016

BETWEEN:-

ESSAR POWER (M.P.) LIMITED
THROUGH ITS DEPUTY GENERAL
MANAGER FINANCE SHRI RAM
KISHORE DWIVEDI AGE 45 YRS. S/O
SHRI CHHITISHWAR SINGH
EXECUTIVE BLOCK II -A , FLAT NO.
503, ESSAR TOWNSHIP WAIDHAN
(MADHYA PRADESH)
.....PETITIONER

(BY SHRI A.K. SHRIVASTAVA, SHRI G.N.
PUROHIT, SHRI NAMAN NAGRATH, SENIOR
ADVOCATES WITH MS UMA PARASHAR,
- 11 -

AND

1. THE STATE OF MADHYA PRADESH
THROUGH PRINCIPAL SECRETARY DEPT.
OF COMMERCE INDUSTRIES AND
EMPLOYMENT MANTRALAYA BHOPAL
(MADHYA PRADESH)

2. PRINCIPAL SECRETARY COMMERCIAL
TAXES DEPARTMENT MANTRALAYA
(MADHYA PRADESH)

3. COMMISSIONER INDUSTRIES
DEPARTMENT CINDHYACHAL BHAWAN,
JAIL ROAD, ARERA HILLS (MADHYA
PRADESH)

4. COMMISSIONER COMMERCIAL TAXES
DEPARTMENT GOVT. OF M.P., M.G.ROAD
(MADHYA PRADESH)

5. GENERAL MANAGER M.P.TRADE AND
INVESTMENT FACILITATION
CORPORATION LTD SECRETARIAT FOR
SINGLE WINDOW SYSTENM CEDAMP
BHAWAN, 16-A, ARERA HILLS (MADHYA
PRADESH)

6. DIVISIONAL COMMISSIONER
COMMERCIAL TAXES DEPARTMENT
DISTT- SATNA (MADHYA
PRADESH)
- 12 -

.....RESPONDENTS

(BY SHRI ASHISH ANAND BERNARD,
ADDITIONAL ADVOCATE GENERAL WITH
SHRI PIYUSH DHARMADHIKARI AND SHRI
A.D. BAJPAI, GOVERNMENT ADVOCATES)

WP. No.4047 of 2017

BETWEEN:-

M/S NTPC LTD IN THE NAME OF
VINDHYACHAL SUPER THERMAL
POWER PROJECT THR. EXECUTIVE
DIRECTOR SHRI RAJESH KUMAR
NTPC LTD VSTPP VINDHYA NAGAR
SINGRAULI (MADHYA PRADESH)
.....PETITIONER

AND

1. DIVISIONAL DEPUTY COMMISSIONER
COMMERCIAL TAX SATNA (MADHYA
PRADESH)

2. PRINCIPAL SECRETARY, COMMERCIAL
TAX DEPARTMENT, VALLABH BHAWAN
BHOPAL (MADHYA PRADESH)
- 13 -

3. COMMERCIAL TAX OFFICER
COMMERCIAL TAXES DEPARTMENT,
WAIDHAN, SINGRAULI (MADHYA
PRADESH)

.....RESPONDENTS

(BY SHRI ASHISH ANAND BERNARD,
ADDITIONAL ADVOCATE GENERAL WITH
SHRI PIYUSH DHARMADHIKARI AND SHRI
A.D. BAJPAI, GOVERNMENT ADVOCATES)

WP. No.9077 of 2018

BETWEEN:-

M/S NTPC LTD. A GOVERNMENT OF
INDIA COMPANY HAVING POWER
PROJECT OF MADHYA PRADESH IN
THE NAME OF M/S VINDHYACHAL
SUPER THERMAL POWER PROJECT
REPRESENTED BY SHRI A.K. TIWARI
GROUP GENERAL MANAGER NTPC
LTD VINDHYA NAGAR, DIST.
SINGRAULI, SCOPE COMPLEX 07,
INSTITUTIONAL AREA, LODHI ROAD,
NEW DELHI, THROUGH NTPC LTD.
VSTPP, VINDHYA NAGAR, (MADHYA
PRADESH)
.....PETITIONER

SHRI ANUJ SHRIVASTAVA, SHRI VASU JAIN,
SHRI VIRAJ SHANKAR JHA, SHRI GREESHM
JAIN AND SHRI ABHIJEET SHRIVASTAVA,
ADVOCATES)

AND

1. DIVISIONAL DEPUTY COMMISSIONER
THROUGH COMMERCIAL TAX SATNA
(MADHYA PRADESH)

2. STATE OF M.P. THROUGH PRINCIPAL
SECRETARY COMMERCIAL TAX
DEPARTMENT VALLABH BHAWAN,
BHOPAL (MADHYA PRADESH)

3. COMMERCIAL TAX OFFICER WAIDHAN
DISTT. SINGROULI (MADHYA PRADESH)

.....RESPONDENTS

(BY SHRI ASHISH ANAND BERNARD,
ADDITIONAL ADVOCATE GENERAL WITH
SHRI PIYUSH DHARMADHIKARI AND SHRI
A.D. BAJPAI, GOVERNMENT ADVOCATES)

WP. No.8691 of 2019

BETWEEN:-

M/S JHABUA POWER LTD. MR. ARUN
HOLONI SR. MANAGER FINANCE
BUNGLOW NO 1 B TAHUL TOWNSHIP
MANDLA ROAD JABALPUR (MADHYA
PRADESH)
.....PETITIONER

(BY SHRI A.K. SHRIVASTAVA, SHRI G.N.
PUROHIT, SHRI NAMAN NAGRATH, SENIOR
ADVOCATES WITH MS UMA PARASHAR,
SHRI ESHAN TRIPATHI, SHRI VARUN
- 15 -

CHOPRA, SHRI SANJAY K. AGRAWAL, MS.
ANKITA KHARE, SHRI SARTHAK NEMA,
SHRI VAIBHAV MISHRA, SHRI KAUSTUBH
SHANKAR JHA, SHRI ANSHUMAN SINGH,
SHRI ANUJ SHRIVASTAVA, SHRI VASU JAIN,
SHRI VIRAJ SHANKAR JHA, SHRI GREESHM
JAIN AND SHRI ABHIJEET SHRIVASTAVA,
ADVOCATES)

AND

1. THE STATE OF MADHYA PRADESH
DIVISIONAL DEPUTY COMMISSIONER
JABALPUR (MADHYA PRADESH)

2. STATE OF M.P. THROUGH PRINCIPAL
SECRETARY COMMERCIAL TAX DEPTT.
VALLABH BHAWAN BHOPAL (MADHYA
PRADESH)

3. COMMERCIAL TAX OFFICER JABALPUR
JABALPUR (MADHYA PRADESH)

.....RESPONDENTS

(BY SHRI ASHISH ANAND BERNARD,
ADDITIONAL ADVOCATE GENERAL WITH
SHRI PIYUSH DHARMADHIKARI AND SHRI
A.D. BAJPAI, GOVERNMENT ADVOCATES)

WP. No.5912 of 2020

BETWEEN:-

M/S NTPC LTD. THR. REPRESENTED BY
SHRI DEBASHIS SEN EXECUTIVE
DIRECTOR NTPC LTD. VSTPP VINDHYA
NAGAR SINGRAULI (MADHYA
PRADESH)
.....PETITIONER
- 16 -

AND
1. DIVISIONAL DEPUTY COMMISSIONER
COMMERCIAL TAX SATNA (MADHYA
PRADESH)

2. STATE OF MADHYA PRADESH THROUGH
PRINCIPAL SECRETARY COMMERCIAL
TAX DEPARTMENT VALLABH BHAWAN
BHOPAL (MADHYA PRADESH)

3. COMMERCIAL TAX OFFICER SINGRAULI
WAIDHAN DISTT.SINGRAULI (MADHYA
PRADESH)
.....RESPONDENTS

(BY SHRI ASHISH ANAND BERNARD,
ADDITIONAL ADVOCATE GENERAL WITH
SHRI PIYUSH DHARMADHIKARI AND SHRI
A.D. BAJPAI, GOVERNMENT ADVOCATES)

WP. No.16803 of 2020

BETWEEN:-

M/S JHABUA POWER LIMITED THRO.
BUNGLOW NO 1B, RAJUL TOWNSHIP
- 17 -

MANDLA ROAD JABALPUR (MADHYA
PRADESH)
.....PETITIONER

AND

1. DIVISIONAL DEPUTY COMMISSIONER
COMMERCIAL TAX DISTT. JABALPUR M.P.
(MADHYA PRADESH)

2. STATE OF M.P. THR. PRINCIPAL
SECRETARY COMMERCIAL TAXES
DEPARTMENT VALLABH BHAWAN BHOPAL
(MADHYA PRADESH)

3. COMMERCIAL TAX OFFICER WAIDHAN
DISTT. SINGRAULI (MADHYA PRADESH)
.....RESPONDENTS

(BY SHRI ASHISH ANAND BERNARD,
ADDITIONAL ADVOCATE GENERAL WITH
SHRI PIYUSH DHARMADHIKARI AND SHRI
A.D. BAJPAI, GOVERNMENT ADVOCATES)
-----------------------------------------------------------------------------------------------
Reserved on : 02.02.2023
Pronounced on : 13.04.2023

----------------------------------------------------------------------------------------
- 18 -

This petition having been heard and reserved for orders,
coming on for pronouncement this day, Hon'ble Shri Justice Sheel
Nagu pronounced the following:

ORDER

These Bunch of cases belong to two different categories. W.P. No.16965/2016 and W.P. No.16453 pertain to 100% exemption from Entry Tax over import of coal by petitioners therein while WP No.3109/2015, W.P. No.2034/2015, W.P. No.2380/2015, W.P. No.2552/2015, W.P. No.3112/2015, W.P. No.3655/2015, W.P. No.4064/2016, W.P. No.4047/2017, W.P. No.9077/2018 and W.P. No.5912/2020, W.P. No.8691/2019 and W.P. No.16803/2020 pertain to concession in the rate of Entry Tax. Pertinently, among the cases seeking concession in Entry Tax, five cases (W.P. No.2034/2015, W.P. No.2552/2015, W.P. No.2380/2015, W.P. No.3109/2015 & W.P. No.3112/2015) relate to reopening of assessment.

2. Questions of law involved herein are common and therefore present order shall dispose of all these petitions.

3. Questions of law which beg for answers are as follows:

(i) Whether coal imported by petitioners for generation of electricity in it's Thermal Power Plant is 100% exempt from levy of Entry Tax on the anvil of notification dated 13.12.2010 by virtue of being raw material purchased in the course of business ?

- 19 -

(ii) Whether provisions of Odisha VAT Act, 2004 are pari materia to the provisions of M.P. VAT Act, 2002, to enable petitioners to take advantage of Division Bench judgment of Orissa High Court in Odisha Power Generation Corporation Ltd. vs. State of Odisha and another dated 30.03.2015 whereby in similar facts and circumstances the contention of petitioners therein (which were similar to the petitioners herein) was upheld by treating coal as the raw material brought in the course of business for generation of electricity ?

(iii) Whether Special Leave Appeal(Civil) No.35253/2015 dismissed by Apex court on 05.07.2017 amounts to confirmation of Division Bench judgment of Orissa High Court dated 30.03.2015 as binding precedent ?

4. Learned senior counsel Shri A.K. Shrivastava, Shri G.N. Purohit, Shri Naman Nagrath with Ms. Uma Parashar, Shri Eshan Tripathi, Shri Varun Chopra, Shri Sanjay K. Agrawal, Shri Vaibhav Mishra, Shri K.S. Jha, Shri Anshuman Singh, Shri Anuj Shrivastava, Shri Vasu Jain, Shri Viraj Shankar Jha, Shri Greeshm Jain and Shri Abhijeet Shrivastava and learned counsel for State Shri Ashish Anand Bernad, Additional Advocate General, Shri A.D. Bajpai, Government Advocate and Shri Piyush Dharmadhikari, Government Advocate are heard.

5. It is not disputed at the Bar that Division Bench of Orisha High Court while considering a similar grievance of Odisha Power

- 20 -

Generation Corporation Ltd. formulated following questions for its consideration:

(i) Whether generation of electricity is manufacturing activity ?

(ii) Whether electricity is an article/a good as referred to in Section 2(28) of Odisha VAT Act, 2004 which defines expression 'manufacture' ?

(iii) Whether coal is a raw material for generation of electricity in Thermal Power Station ?

(iv) If answers to Question Nos.1, 2 and 3 are in affirmative then whether petitioners are entitled to avail concessional rate of Entry Tax on coal in terms of Rule 3(4) of Odisha Entry Tax Rules, 2004 ?

5.1 After considering gamut of arguments rendered by rival parties and going into the object and intent behind expression 'manufacture', 'raw material', etc. and relying upon various decisions of Apex Court the Division Bench of Orissa High Court answered the aforesaid questions in following manner:

1. In view of definition of 'manufacture' as provided in Section 2(28) of OVAT Act read with Rule 2(1)(c) of the OET Rules and Section 2(q) of the OET Act and all the above judicial pronouncements of Hon'ble Supreme Court and High Court, we are of the considered view that the activity of generating electricity in thermal power plant by using coal would qualify as a manufacturing activity.

- 21 -

2. In view of above decisions of Hon'ble Supreme Court, electricity is an article as referred to in Section 2(28) of the OVAT Act read with Rule 2(1)(c) of OET Rules which define 'manufacture'.

3. The above process clearly demonstrates that coal is the primary raw-material for generation/production of electricity in thermal power plant and without coal, no electricity can be produced/generated/manufactured.

5.2 While answering the aforesaid questions in aforesaid manner, following reasons were assigned by the Orissa High Court:

(1) It is not the case of the Assessing Authority that without coal thermal power which is finished product in a thermal power station can be produced and therefore, coal is not a primary/principal raw material to generate/produce thermal power. On the other hand, use of coal and production of electricity in a thermal power plant is an integral process and so inextricably connected that no thermal power can be produced without use of coal;

(2) Consumption and output ratio between coal and electricity is not necessary/relevant in deciding whether coal is a raw material for generation/production of thermal power. (3) While adjudicating as to whether coal is a raw material for generation/production of thermal power, it is irrelevant to find out whether water, wind, solar power are raw material for generation of hydro electricity, wind energy and solar energy respectively. Such questions may be adjudicated in appropriate case(s).

(4) There is no dispute over the legal proposition that every change in a processing is not manufacture as held by the Hon'ble Supreme Court in Kutty Flush Doors & Furniture Co. (supra). As in the present case a new and different article, i.e., electricity energy emerges which is distinct in name, character

- 22 -

and use from coal, the above case of the Hon'ble Supreme Court supports the petitioner.

(5) While dealing with question Nos. (i) and (iii) above, we have already held for the reasons stated therein that generation of electricity is a manufacturing activity and coal is a raw material for generation/production of electricity."

5.3 The Division Bench of Orissa High Court ultimately held thus:

"49. In view of our answer to question Nos.(i), (ii) and

(iii) in favour of the petitioner, we are of the considered opinion that the petitioner is entitled to avail concessional rate of entry tax on coal in terms of Rule 3(4) of the OET Rules.

50. Accordingly, the impugned order of assessment dated 03.05.2014 (Annexure-6 series) passed by the Assessing Authority is quashed.

51. In the result, the writ petition is allowed, but without any order as to costs."

6. Learned senior counsel for petitioners in all the petitions have relied upon aforesaid decision of Division Bench of Orissa High Court by contending that all the relevant questions of law have been answered by Orissa High Court in favour of petitioners therein. Thus, it is contended that petitioners are entitled for the same benefit as extended to petitioner before Orissa High Court. It is further informed that the aforesaid decision of Orissa High Court has received the stamp of approval from Apex Court by dismissal of SLA(C) No.35253/2015 preferred by State of Odisha on 05.07.2017. The order passed by Apex Court on 05.07.2017 is as follows:

"Heard the learned counsels for the parties and perused the relevant material.

- 23 -

We do not find any legal and valid ground for interference. The Special Leave Petition is dismissed. Contempt proceedings agaisnt Mr. A.C. Nayak, Joint Commissioner of Sales Tax, Sambalpur Range, Sambalpur is directed to stand closed."

As such it is urged that petitioners are entitled to exemption/concession from payment of Entry Tax on coal purchased by petitioners on the anvil of notification dated 13.12.2010 vide Annexure P/3 in W.P. No.16965/2016 and concession in payment of Entry Tax as per notification no.A-3-195-05- 1-V(15), dated 01.04.2007 Annexure P/4 in W.P. No.3109/2019.

7. Per contra, State represented by Additional Advocate General Shri Ashish Anand Bernard contends that due to material difference in the terminology used for defining the expression "in the course of business", "raw material" and "manufacture" in the Odisha VAT Act, 2004 on one hand and M.P. VAT Act, 2002 on the other, the Division Bench judgment of Orissa High Court cannot be applied mutatis mutandis to the facts and circumstances prevailing herein. The other contentions of learned counsel for State are as follows:

(i) There is a marked difference between the definition of various expressions in M.P. VAT Act as compared to Odisha VAT Act.

(ii) Provision of the like of Section 2(d)(ii)(b) of M.P. VAT Act does not exist in the Odisha VAT Act.

(iii) There is a marked difference between the text and context of the charging provision Section 3 of Odisha Entry Tax Act and Section 3 of M.P. Entry Tax Act.

- 24 -

(iv) The exemption notification vide Annexure P/3 exempts entry of raw material for manufacture which does not include generation of electricity.

(v) The definition of 'manufacture' in M.P. VAT Act is inclusive whereas in Odisha VAT Act it is exhaustive.

(vi) Since any element/part of raw material of coal is untraceable in the end product/finished goods (electricity), coal cannot be treated as raw material for generating electricity.

(vii) The SLA(C) dismissed on 05.07.2017 by Apex Court does not confirm the order of the Division Bench of Orissa High Court since the SLA(C) was dismissed without hearing on merits. It is thus contended that petitioner cannot take advantage of the doctrine of merger and thus Division Bench judgment of Orissa High Court is open to be distinguished on facts.

(viii) That in case of ambiguity in taxing statutes, the same needs to be read in favour of the assessee whereas in cases of ambiguity in exemption provision, the same needs to be read in favour of Revenue. On the anvil of aforesaid principle, it is submitted by State that since the controversy herein relates to exemption provision, any ambiguity arising therefrom is to be read in favour of Revenue.

(ix) For the aforesaid purpose, learned counsel for State has relied upon following judgments:

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(1975) 3 SCC 448 (State of Mysore vs. West Coast Papers Mills Ltd. And another) (1992) 4 SCC 363 (Commissioner of Income Tax vs. Sun Engineering Works (P) Ltd., (2003) 11 SCC 129 (Union of India vs. Ahmedabad Electricity Co. Ltd. And others), (2009) 1 SCC 469 (Commissioner of Central Excise, Bangalore vs. Srikumar Agencies and others), (2009) 5 SCC 545 (Nair Service Society vs. Dr. T. Beermasthan and others), (2010) 5 SCC 388 (Goan Real Estate and Construction Limited and another vs. Union of India) (2018) 9 SCC 1 (Commissioner of Customs (Import), Mumbai vs. Dilip Kumar and Company and others) (2019) 7 SCC 703 (Achal Industries vs. State of Karnataka), (2020) 3 SCC 133 (P. Singaravelan and others vs. District Collector, Tiruppur and DT and others), (2022) 5 SCC 62 (Krishi Upaj Mandi Samiti, New Mandi Yard, Alwar vs. Commissioner of Central Excise and Service Tax, Alwar).

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8. As regards the cases pertaining to concession in the levy of entry tax on import of coal, Shri G.N. Purohit, learned senior counsel alongwith Shri Eshan Tripathi by referring to the definition of expression "raw material"

in Section 2(g) of M.P. Entry Tax Act, 1976, contends that the said definition is unambiguous and self explanatory, which includes within its wide and generic sweep, fuel (coal) required for manufacturing/generating electricity. Shri Purohit further contends that once the concessional rate of Entry Tax to the tune of 2% was notified, no enhancement in the rate can take place in absence of any change in the fact situation. Shri Purohit also urges that reliance placed by State over the decision of Apex Court in Union of India vs. Ahmedabad Electricity Co. Ltd., 2003 (11) SCC 129 is misplaced for the reason that the said case relates to Central Excise Act where the definition of 'manufacture' is materially distinct from the definition of 'manufacture' under M.P. VAT Act. It is also contended by Shri Purohit that the very fact of the concessional/exemption notification being generic in nature which does not expressly exclude the concept of generation of electricity from the purview of 'manufacturing', it is implied that generation of electricity is a component of "manufacture".

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9. Before adverting to the process of adjudication of various issues raised by rival parties, it would be apt to reproduce the relevant statutory provision of M.P. Entry Tax Act and M.P. VAT Act.

9.1 Pertinently, expression 'manufacture' is not defined in Section 2 of M.P. Entry Tax Act but by virtue of Section 2(2) of M.P. Entry Tax Act, all expressions which are not defined in M.P. Entry Tax Act but are defined in M.P. VAT Act shall have the meaning assigned to them in M.P. VAT Act. Thus, relevant expressions defined in M.P. Entry Tax Act and M.P. VAT Act are being reproduced hereinunder:

Entry Tax Act, 1976 Section 2 :

      (1)    xxx    xxx    xxx
      (a)    xxx    xxx    xxx
      (b)    xxx    xxx    xxx
      (c)    xxx    xxx    xxx
      (d)    xxx    xxx    xxx
      (e)    xxx    xxx    xxx
      (f)    xxx    xxx    xxx

      (g)    raw material means 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;

      (h)    xxx    xxx    xxx
      (i)    xxx    xxx    xxx
      (j)    xxx    xxx    xxx
      (k)    xxx    xxx    xxx
      (l)    xxx    xxx    xxx
      (m)    xxx    xxx    xxx
                                -   28 -


(2)     All those expressions, other than expression "goods" and

"sale" which are used but are not defined in this Act and are defined in the [VAT Act] shall have the meanings assigned to them in that Act.


Section 3: Incidence of taxation

(1)     There shall be levied an entry tax,-
(a)     on the entry in the course of business of a dealer of goods

specified in Schedule -II, into each local area for consumption, use or sale therein, and

(b) on the entry in the course of business of a dealer of goods specified in Schedule -III into each local area for consumption or use of such goods but not for sale therein;

and such tax shall be paid by every dealer liable to tax under the [VAT Act] who has effected entry of such goods:

Provided that no tax under this sub-section shall be levied,- (not reproduced for being irrelevant) Section 10 : Power to exempt The State Government may, by notification, and subject to such restrictions and conditions as may be specified therein, exempt, whether prospectively or retrospectively, in whole or in part :

(i) any class of dealers or persons, or any goods or class of goods, from the payment of entry tax under this Act in respect of all or any of the local areas, for such period as may be specified in the notifications;

(ii) any dealer or class of dealers, from any provision of the Act as may be specified in the notification :

Provided that in respect to the period during which the Ordinance repealed under Section 24 was in force, the retrospective effect may be given from the date of the commencement of the said Ordinance as if the liability to pay tax arose under this Act and for that purpose it shall and shall always

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be deemed that the provisions of this Act to the extent they correspond to the provisions of the said Ordinance were in force during the material times.


M.P. VAT Act, 2002

Section 2

(a)   xxx   xxx     xxx
(b)   xxx   xxx     xxx
(c)   xxx   xxx     xxx
(d)   Business includes,-

       (i)    any trade, commerce, manufacture or any adventure

or concern in the nature of trade, commerce or manufacture, whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any gain or profit accrues from such trade, commerce, manufacture, adventure or concern an irrespective of the volume, frequency, continuity or regularity of such trade, commerce, manufacture, adventure or concern; and

(ii) any transaction of sale or purchase of goods in connection with or incidental or ancillary to the trade, commerce, manufacture, adventure or concern referred to in clause (i), that is to say,-

(a) goods whether or not they are in their original form or in the form of second hand goods, unserviceable goods, obsolete or discarded goods, mere scrap or waste material; and

(b) goods which are obtained as waste products or by-products in the course of manufacturing or processing of other goods or

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mining or generation of or distribution of electrical energy or any other form of power.

(e)    xxx    xxx    xxx
(f)    xxx    xxx    xxx
(g)    xxx    xxx    xxx
(h)    xxx    xxx    xxx
(i)    xxx    xxx    xxx
(j)    xxx    xxx    xxx
(k)    xxx    xxx    xxx
(l)    xxx    xxx    xxx

(m) Goods means all kinds of movable property including computer software but excluding actionable claims, newspapers, stocks, shares, securities or Government stamps and includes all materials, articles and commodities, whether or not to be used in the construction, fitting out, improvement or repair of movable or immovable property, and also includes all growing crops, grass, trees, plants and things attached to, or forming part of the land which are agreed to be severed before the sale or under the contract of sale.

(n)    xxx    xxx    xxx
(o)    xxx    xxx    xxx

(p)     Manufacture includes any activity that brings out a change

in an article or articles as a result of some process, treatment, labour and results in transformations into a new and different article so understood in commercial parlance having a distinct name, character and use, but does not include such activity of manufacture as may be notified;

       (pa)   xxx    xxx    xxx
       (pb)   xxx    xxx    xxx

q)     xxx    xxx    xxx
(r)    xxx    xxx    xxx
(s)    xxx    xxx    xxx
                                            -    31 -


      (t)      xxx      xxx       xxx
      (u)      xxx      xxx       xxx
      (v)      xxx      xxx       xxx
      (w)      xxx      xxx       xxx
      (x)      xxx      xxx       xxx
      (y)      xxx      xxx       xxx
      (z)      xxx      xxx       xxx

10. In the face of rival contentions as reproduced above, it is obvious that this Court has to deal with the four questions as enumerated above.

10.1. The first question posed by this Court is whether coal imported by petitioners for generation of electricity by Thermal Power Plant is exempted from Entry Tax on the anvil of notification dated 13.12.2010 by virtue of being raw material purchased in the course of business ?

10.1(a) The exemption notification dated 13.12.2010 issued u/S 10 of M.P. Entry Tax Act is extracted below:

"Bhopal, the 13th December 2010 FA-3-25-2010-1-V-(96).-In exercise of the powers conferred by Section 10 of the Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 (No.52 of 1976) (hereinafter referred to as the Entry Tax Act), the State Government, hereby, exempts in whole from payment of entry tax under the said Act the class of dealers specified in column (2) of the Table below other than those specified in Annexure I, for the period specified in column (3) subject to the restrictions and conditions specified in column (4) of the said Table :-

TABLE S.No. Class of dealers Period Restrictions and conditions subject to which exemption is granted.

(1) (2) (3) (4)

1. Registered dealer who For a period of five (1) The exemption from payment of established a new industrial years from the date of entry tax shall be available to

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unit in any of the districts in effecting the first the dealer when any goods the State of Madhya purchase of raw specified in Schedule II and Pradesh. material as on or after Schedule III appended to the 1st November, 2010 for Entry Tax Act are entered into a consumption in the local area by him for industrial unit. consumption or use as raw material or for use as incidental goods in the manufacture of goods or for use in the packing of goods manufactured in his industrial unit.

2. Registered dealer who has (2) The goods entered by the dealer acquired or purchased a into a local area for the purpose sick/closed industrial unit specified in clause (1) above in which new investment in should be specified in as raw fixed capital is more than material or incidental goods or 50% of the previous capital packing material in his investment of the unit, registration certificate under the which is not less than Madhya Pradesh Vat Act, 2002.

rupees ten crores and in respect of which the High Level Committee has sanctioned a "Special Package, 2010" under the provisions of Industrial Promotion Policy, 2010.

(3) The facility of exemption under this notification shall be available only when the dealer holds an eligibility certificate for that purpose issued to him by the competent authority in accordance with the provisions in Annexure II.

(4) The facility of exemption under this notification shall be available in respect of the entry of the said goods into the local area for the aforesaid purposes only during the period of eligibility specified in the eligibility certificate.

(5) The facility of exemption under this notification shall be available to the industrial unit which has commenced commercial production on or after 1st November, 2010, but before 1st November, 2015."

11. Bare perusal of the charging provision Section 3 of M.P. Entry Tax Act reveals that the levy of Entry Tax is on the entry in the course of

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business of a dealer of goods specified in Schedule II into each local area for consumption, use or sale. However, no levy of entry tax can be made over goods specified in Schedule III which are for sale. Extract of Schedule II appended to M.P. Entry Tax Act reads as under:

SCHEDULE II (Effective from 1.10.97) (See Sections 4, 9 and 12) S.No. Description of goods Rate of tax(%) (1) (2) (3)

1. Coal including coke in all its forms 2.5 11.1 The State is vested with power to exempt certain goods from levy of entry tax subject to such restrictions and conditions and on such terms and conditions as it thinks fit. In the instant case, the State by notification dated 13.12.2010 Annexure P/3 in W.P. No.16965/2016 exempted in whole payment of Entry Tax on coal which is brought by dealers into the local area as raw material in the manufacture of goods.

Petitioners or all dealers bring coal into local area for being consumed by their thermal power stations for generation of electricity.

11.2 The Registration Certificate of petitioner vide Annexure P/2 in W.P. No.16965/2016 specifies karobar ka swarup as power generation, coal, SHD, etc. 11.3 The process of generation of electricity in a thermal power station is succinctly enumerated in the Division Bench judgment of Orissa High

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Court which can very well be borrowed for convenience, brevity and to avoid prolixity, as such;

(i) Coal is burnt to create heat;

(ii) The energy so generated by burning coal is used to heat water and air;

(iii) This leads to creation of steam;

(iv) The steam fired at high pressure turns the blades of turbine;

(v) Turning of blades of turbine which contains dynamo converts mechanical energy into electrical energy based on the Faradey's Principle of Electromagnetic Induction.

11.4 The aforesaid process makes it palpable that in absence of coal which is the very primary source for generation of heat leading to creation of steam resulting in turning of turbines, no electricity can be produced by any thermal power station.

11.5 The question which now begs for answer is as to whether coal can be termed as raw material as defined in Section 2(g) of M.P. Entry Tax Act. Bare reading of expression "raw material" reveals that the definition is not only generic in nature but wide enough to include all articles used as ingredients in the process of manufacturing of goods or articles consumed in the process of manufacturing including fuel required for the process of manufacture.

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11.6 Since manufacture is not defined in M.P. VAT Act, resort is made to the definition of manufacture u/S 2(p) of the M.P. VAT Act which is exhaustive in nature due to its inclusive characteristic. The said expression 'manufacture' u/S 2(p) in the MP VAT Act includes any activity of brings out change in an article as a result of some process, treatment, labour and leads to transformation into an article which is new and different in commercial parlance having distinct name, character, etc. 11.7 The definition of "manufacture" has now been crystallized by various judicial pronouncement to avoid prolixity of two cases of Union of India vs. J.G. Glass Industries Ltd., (1998) 2 SCC 32 of a Division Bench and the case of Servo-Med Industries (P) Ltd. vs. CCE, (2015) 14 SCC 47 rendered by three Judge Bhench are being extracted below:

"Union of India v. J.G. Glass Industries Ltd., (1998) 2 SCC 32 On an analysis of the aforesaid rulings, a twofold test emerges for deciding whether the process is that of "manufacture". First, whether by the said process a different commercial commodity comes into existence or whether the identity of the original commodity ceases to exist; secondly, whether the commodity which was already in existence will serve no purpose but for the said process. In other words, whether the commodity already in existence will be of no commercial use but for the said process. In the present case, the plain bottles are themselves commercial commodities and can be sold and used as such. By the process of printing names or logos on the bottles, the basic character or the commodity does not change. They continue to be bottles. It cannot

- 36 -

be said that but for the process of printing, the bottles will serve no purpose or are of no commercial use.

Servo-Med Industries (P) Ltd v. CCE, (2015) 14 SCC 47

27. The case law discussed above falls into four neat categories:

(1) Where the goods remain exactly the same even after a particular process, there is obviously no manufacture involved.

Processes which remove foreign matter from good complete in themselves and/or processes which clean goods that are complete in themselves fall within this category.

(2) Where the goods remain essentially the same after the particular process, again there can be no manufacture. This is for the reason that the original article continues as such despite the said process and the changes brought about by the said process.

(3) Where the goods are transformed into something different and/or new after a particular process, but the said goods are not marketable. Examples within this group are the Brakes India case [Brakes India Ltd.v. Supt. of Central Excise, (1997) 10 SCC 717] and cases where the transformation of goods having a shelf life which is of extremely small duration. In these cases also no manufacture of goods taken place (4) Where the goods are transformed into goods which are different and/or new after a particular process, such goods being marketable as such. It is in this category that manufacture of goods can be said to take place."

- 37 -

In this definition of "manufacture" there is nothing to imply that unless and until any traces or element of raw material are found in the finished product, the requirement of the process of manufacturing is not satisfied. Merely because coal gets burnt out in the initial process of creation of heat for making steam and thereby turning the turbine leading to production/manufacture of electricity and thus coal is not found in any physical form in the finished product i.e. electricity, does not mean that coal cannot be treated as raw material for generation/manufacture of electricity.

11.8 The other aspects which need to be satisfied is that coal is brought into the local area by petitioners in the course of its business as per Section 3 of M.P. Entry Tax Act.

11.9 The expression "course of business" is not defined in M.P. Entry Tax Act and therefore, resort is made to M.P. VAT Act which though does not defined the expression "course of business" but defines expression "business" in Section 2(d) of the M.P. Tax Act. The definition of expression "business" in M.P. VAT Act is generic, inclusive and thus exhaustive in nature. This expression "business" includes the process of manufacture.

11.10 In view of above provision, it is obvious that coal is raw material as defined in Section 2(g) of M.P. Entry Tax Act required for the process of manufacturing/generation of electricity. More so coal is also one of the items mentioned in Schedule II appended to the Entry Tax Act.

- 38 -

11.11 Once it has been held that coal is raw material for manufacturing/generating electricity and thus is exigible to Entry Tax Act, the exemption/concession notification issued by the State u/S 10 of M.P. Entry Tax Act vide Annexure P/3 in W.P. No.16965/2016, and Annexure P/4 in W.P. No.3109/2015 are available to be availed by petitioners exempting them from payment of Entry Tax on coal brought into local area where the thermal power station of petitioners are situated on such terms and conditions as mentioned in the notification.

12. For the sake of clarity and convenience, this Court produces a comparative tabular illustration of the definition provided in M.P. VAT Act/M.P. Entry Tax Act on the one hand and Orissa VAT Act/Entry Tax Act of certain relevant expressions as follows:

M.P. Entry Tax Act/M.P. VAT Act Orissa VAT Act Raw Material - Section 2(1)(g) of M.P. Raw Material - Section 20(8)(k) Entry Tax Act.

raw material means an article used as an In respect of raw materials used in ingredient in any manufactured goods, or manufacture or processing of goods, an article consumed in the process of where the finished products are exempt manufacture and includes fuel and from tax. lubricants required for the process of manufacture;

Manufacture - Section 2(p) of M.P. VAT Manufacture - Section 2(28) Act "Manufacture" means any activity that "Manufacture" includes any activity that brings out a change in an article or brings out a change in an article or articles as result of some process, articles as a result of some process, treatment, labour and results in treatment, labour and results in transformation into a new and different transformations into a new and different article so understood in commercial article so understood in commercial parlance having a distinct name,

- 39 -

parlance having a distinct name, character and use, but does not include character and use, but does not include such activity of manufacture as may be such activity of manufacture as may be notified; notified;

Business - Section 2(d) of M.P. VAT Act Business - Section 2(7) "Business" includes,- "Business" includes -

(i) any trade, commerce, manufacture (a) any trade, commerce or manufacture;

or any adventure or concern in the nature (b) any adventure or concern in the nature of trade, commerce or manufacture, of trade, commerce or manufacture; whether or not such trade, commerce, (c) any transaction in connection with, or manufacture, adventure or concern is incidental or ancillary to, such trade, carried on with a motive to make gain or commerce, manufacture, adventure or profit and whether or not any gain or concern; profit accrues from such trade, commerce, (d) any transaction in connection with, or manufacture, adventure or concern an incidental or ancillary to, the irrespective of the volume, frequency, commencement or closure of such trade, continuity or regularity of such trade, commerce, manufacture, adventure or commerce, manufacture, adventure or concern; concern; and (e) any occasional transaction, whether or

(ii) any transaction of sale or not there is volume, frequency, continuity purchase of goods in connection with or or regularity of such transaction, in the incidental or ancillary to the trade, nature of such trade, commerce, commerce, manufacture, adventure or manufacture, adventure or concern, concern referred to in clause (i), that is to whether or not such trade, commerce, say,- manufacture, adventure, concern or

(a) goods whether or not they are in transaction is effected with a motive to their original form or in the form of gain or profit or whether or not any gain second hand goods, unserviceable goods, or profit accrues from such trade, obsolete or discarded goods, mere scrap commerce, manufacture, adventure, or waste material; and concern or transaction.

(b) goods which are obtained as waste Explanation.- For the purposes of this products or by-products in the course of clause,- manufacturing or processing of other (i) the activity of raising of man-made goods or mining or generation of or forest or rearing of seedlings or plants distribution of electrical energy or any shall be deemed to be a business, other form of power. (ii) transaction of sale or purchase of capital goods pertaining to any trade, commerce, manufacture, adventure, concern or transaction shall be deemed to be a transaction comprised in business,

(iii) purchase of any goods, the price of

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which is debited to the business and sale of any goods, the proceeds of which are credited to the business shall be deemed to be transactions comprised in business;

Goods - Section 2(m) of M.P. VAT Act Goods - Section 2(21) "Goods" means all kinds of movable property including computer software but "Goods" means every kind of movable excluding actionable claims, newspapers, property not being newspapers, stocks, shares, securities or Government actionable claims, money, stock, shares or stamps and includes all materials, articles securities, and includes all materials, and commodities, whether or not to be commodities and articles (including goods used in the construction, fitting out, as goiods or in some other form) involved improvement or repair of movable or in the execution f nay works contract or immovable property, and also includes all goods used in the fitting out, improvement growing crops, grass, trees, plants and or repair of movable property and things attached to, or forming part of the growing crops, grass and trees, plants land which are agreed to be severed including the produce thereof and all before the sale or under the contract of other things attached to our forming part sale. of the land which are agreed to be severed before sale or under the contract of sale;

12.1 Bare perusal of the aforesaid comparison of provisions in Madhya Pradesh and Orissa reveal that textually as well as contextually the provisions are para materia and are not materially different and distinct as contended by the State. Thus, there is no substance in the State's objection about applicability of Division Bench judgment of Orissa High Court in the case of Odisha Power Generation Corporation Ltd. (supra).

13. The only other submission of learned counsel for the State which requires consideration is the distinction sought to be drawn by the State between the expression "manufacturing" and "generation". Learned State counsel submits that the expression used in the taxing Statutes is

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'manufacture' but not 'generation' and thus the process of generation of electricity stands impliedly excluded.

13.1 This Court need not enter into the prolixity of detailed adjudication on the aforesaid aspect placed by the State in view of categorical finding rendered by Division Bench of Orissa High Court equating the expression "generation of electricity" to "manufacture of electricity".

13.2 More so, the judgment of Division Bench of Orissa High Court has been upheld by Apex Court by dismissal of SLA(C) on 05.07.2017 which is an order passed on merits after due consideration of the grounds raised by the State of Odisha and the respondents before Apex Court. The very fact that the order of the Apex Court starts with the sentence "Heard the learned counsel for the parties and perused the relevant material, we do not find any legal and valid ground for interference" reflects that Apex Court after due consideration of the rival contentions had dismissed the Special Leave to Appeal of the State of Odisha. The order of Apex Court passed on 05.07.2017 is of dismissal of SLA(C) No.35253/2015 and thus it appears that leave to prefer an appeal is declined to State of Odisha. As such, the doctrine of merger does not come into play but, however, the judgment of Division Bench of Orissa High Court acts as res judicata in subsequent proceedings between the parties therein. This principle has been laid down in the case of Kunha Yammed and others vs. State of Kerala and another,

- 42 -

(2000) 6 SCC 359 where in concluding paragraph, Apex Court held thus:

"44(v) If the order refusing leave to appeal is a speaking order, i.e., gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the Supreme Court being the Apex Court of the country. But, this does not amount to saying that the order of the court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting the special leave petition or that the order of the Supreme Court is the only order binding as res judicata in subsequent proceedings between the parties."

Even otherwise, this Court is an agreement with the reasoning assigned by Division Bench of Orissa High Court before which the same question founded upon same set of factual matrix fell for consideration. This Court thus finds support from the judgment of Division Bench of Orissa High Court which applies mutatis mutandis to the controversy therein.

13.3 More so, in one of the decisions rendered by Apex court in the case of Maruti Suzuki Limited vs. Commissioner of Central Excise, Delhi III, (2009) 9 SCC 193, following observation has been made:

"In CCE v. Rajasthan State Chemical Works the test laid down by this Court is whether the process and the use are integrally connected. As stated above, electricity generation is more of a process having its own economics. Applying the said test, we hold that when the electricity generation is a captive arrangement and the requirement is for carrying out the manufacturing activity, the electricity generation also forms part of the manufacturing activity

- 43 -

and the "input" used in that electricity generation is an input used in the manufacture of final product."

The aforesaid judgment of Maruti Suzuki Limited (supra) holds the field till date. The aforesaid verdict of Apex Court in the case of Maruti Suzuki Limited (supra) indicates that the "inputs" used in generation of electricity were treated to be raw material for manufacturing electricity.

14. This Court is conscious of it's limitations faced while interpreting taxing Statutes. The time tested principle laid down in the celebrated case of Cap Brandy Syndicate vs. Inland Revenue Commissioner is that the Taxing Statue has to be looked at as what it clearly textually says since there is no room for intendment or equity about a tax. More so there is no presumption as to a tax. Nothing is to be read in and nothing is to be implied. The Court can look fairly at the language used by the Taxing Statute.

15. If the contention of learned counsel for the State is accepted then lot many things will have to be intended, implied and presumed which, in the considered opinion of this Court, will do offence to the plain and clear language of the Statute.

16. In the conspectus of above discussion, this Court has no manner of doubt that submissions of State deserve to be rejected and petitions with regard to exemption as well as concession deserve to be allowed.

17. Accordingly, petitions are allowed in following manner:

- 44 -

(1) W.P. No.16965/2016 - To the extent indicated above the impugned order dated 02.09.2016 Annexure P/17 passed by Divisional Deputy Commissioner, Commercial Tax, Jabalpur Division II stands quashed.

(2) W.P. No.2034/2015 - To the extent indicated above the reassessment notice dated 10.06.2014 Annexure P/2 and the order of reassessment dated 19.12.2014 Annexure P/6 passed by Divisional Deputy Commissioner, Commercial Tax, Satna stand quashed.

(3) W.P. No.2380/2015 - To the extent indicated above the reassessment notice dated 10.06.2014 Annexure P/2 and the order of reassessment dated 19.12.2014 Annexure P/6 passed by Divisional Deputy Commissioner, Commercial Tax, Satna stand quashed.

(4) W.P. No.2552/2015 - To the extent indicated above the reassessment notice dated 10.06.2014 Annexure P/2 and the order of reassessment dated 19.12.2014 Annexure P/6 passed by Divisional Deputy Commissioner, Commercial Tax, Satna stand quashed.

(5) W.P. No.3109/2015 - To the extent indicated above the assessment order dated 10.06.2014 Annexure P/2 and the order dated 19.12.2014 Annexure P/6 passed by Divisional Deputy Commissioner, Commercial Tax, Satna stand quashed.

- 45 -

(6) W.P. No.3112/2015 - To the extent indicated above the reassessment notice dated 10.06.2014 Annexure P/2 and the order of reassessment dated 19.12.2014 Annexure P/6 passed by Divisional Deputy Commissioner, Commercial Tax, Satna stand quashed.

(7) W.P. No.3655/2015 - To the extent indicated above the order of reassessment dated 07.01.2015 passed by Divisional Deputy Commissioner, Commercial Tax, Satna Annexure P/2 stands quashed.

(8) W.P. No4064/2016 - To the extent indicated above the order of reassessment dated 30.12.2015 Annexure P/2 passed by Divisional Deputy Commissioner, Commercial Tax, Satna stands quashed.

(9) W.P. No.16453/2016 - To the extent indicated above the impugned demand notice dated 02.09.2016 Annexure P/17 issued by Divisional Deputy Commissioner, Commercial Tax, Satna and the decision dated 09.11.2015 of State Level Empowered Committee stand quashed.

(10) W.P. No.4047/2017 - To the extent indicated above the order of reassessment dated 31.01.2017 Annexure P/2 passed by Divisional Deputy Commissioner, Commercial Tax, Satna stands quashed.

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(11) W.P. No.9077/2017 - To the extent indicated above the order of reassessment dated 16.02.2018 Annexure P/2 passed by Divisional Deputy Commissioner, Commercial Tax, Satna stands quashed.

(12) W.P. No.8691/2019 - To the extent indicated above the order of reassessment dated 22.02.2018 Annexure P/2 passed by Divisional Deputy Commissioner, Commercial Tax, Jabalpur stands quashed.

(13) W.P. No.5912/2020 - To the extent indicated above the order of reassessment dated 04.12.2019 Annexure P/2 passed by Divisional Deputy Commissioner, Commercial Tax, Satna stands quashed.

(14) W.P. No.16803/2020 - To the extent indicated above the order of assessment dated 21.01.2020 Annexure P/3 passed by Divisional Deputy Commissioner, Commercial Tax, Jabalpur stands quashed.

                                    (SHEEL NAGU)                            (VIRENDER SINGH)
                                       JUDGE                                     JUDGE



YS


Digitally signed by YOGESH KUMAR
SHIRVASTAVA
Date: 2023.04.13 18:52:40 +05'30'

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