M/S. Essar Project Ltd vs The Commissioner Of Commercial Taxes on 9 June, 2009

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Karnataka High Court

M/S. Essar Project Ltd vs The Commissioner Of Commercial Taxes on 9 June, 2009

Bench: Ravi Malimath

1

IN THE HIGH coum op KARNATAKA, AT BANGALCERE

DATED THIS THE 9TH mar 01:' JUNE, 2QQ_€§ :'  ~ V.

PRESENT

THE HON'BLE MR. JUSTICE' V.GOPA§mGOWDA   

AND % ._ N
THE HON'BLE MR.  RiAv1vwA1;;h/i2éffH" 

C.R.P.    
C.R.P. N9.' 34mg &._.35j.e9.,

BE'TWvEEN:_; '   

M] S. ESSAR PRQJEiLT_ '*----L"r£}.,
IOC JUBILEE mm-L315 CGMPLEX,
254,;;M_P.13. ROAD, '
H0m:NUR:JGoLLARA1iATr1,

' ' - §A?.'ANA'GERE -- 577 556.
 » BY NAGARAJ,
 D.ERE1'3.'I't1'I_R',  

AGED ABC;:.;1§75 YEARS.
 . . _ PEFITIONER
(BY 'Sm T.N. KESHAVAMURTHY, ADVOCATE)

   AB§17.:- VV 

%  ""m'E"CoMM1ssioNER 01:' COMMERCIAL TAXES,

VANIJYA THERIGE KARAYALAYA,

M "  GANDHINAGAR,

BANGALORE -~ 9.
RESPONDENT

{HY SMT. GEETHA MENON, ADDL. GOVT ADVOCATE) M V' . (B?.SR-I"T.N._KESHAVAMURTHY, ADVOCATE) THIS CRP IS FILED U/S 16 01:' ACi*,?Ij"-i9'*2*§ AGAINST THE ORDER DATED: 9.2.2099"-._p;AssgD INK NO.ZAC--1/DVG/SMR--7, 13 85 14/9399, 'r'.No;-.S1;1,4-was-09 ' ON THE FILE op' THE A1:§nL.ceMMIssIQNE.,R"f01? COMMERCIAL TAXES, ZONE-1, '=--,BA_fNGALO.RE., 'Ho'L:)IﬁG THAT THE ORDER OF KARNATAKA TRIBUNALAIIII 'S'I'A.'I'~IO.'--..L 426/2008 DATED: 2'7.6.20{}--!3 ma 2oo3~o4..I..V1VsI= ore; DIFFERENT ISSUES OTHER THE"I_SSEJ_I:"=,S INVOLVED IN THIS REVISION AND CONCLUDING THE REVISION PROCEEDIIIQS. ' C.R.P. llo. 84 or 2009:? I 3 BE'I'WEEN:-- _ M/S. ESSAR I--*R(;J§;;c,*r«.._V«:,T*{),,'~-_ j 100 JUBILEE {JUTLET COMPLEX, 254 HONNURUG{,'LLAR3AHA'l"FI, ' -

DAVAFIAGERE .=5-77' '-

BY T.K.'NAGARAJ, DIRECTOR, ' _ ' . g "

AGED. ABOUT. 75 YEARS;

PETITIONER *m_£«':' co.MnégséIoNER OF COMMERCIAL TAXES, VANIJYA 'I'i-"IERIGE KARAYALAYA, GANDHEHAGAR, I VF SANGALORE »» 9.

RESPONDENT I fsvém. GEETHA Miznorq, ADDL. GOVT ADVOCATE) THIS CRP IS FILED U/S 16 OF KTEG AC1', 1979 AGAINST THE ORDER DATED: 9.2.2009 ?ASSED IN NGKZAC-1/DVG/SMR--7, 13 85 14/0809, 'I'.NO. 1144[08--D9 ON THE FILE OF THE ADDLCOMMISSIONER OF' COMMERCIAL TAXES, 'ZONE4, BAN LORI?) HOLDING THAT THE ORDER OF KARNATAKA TRIBUNAL 1N 426/2008 DATED: 27.6.2908 FOR 2O03--O45.._lS_ DIFFERENT ISSUES OTHER THAN THE ISSUESWINVOLVED IN THiS REVISl0N AND ACCORDINGLY CONCL_U'D{NQ _ REv1s1=oR PROCEEDINGS. .

C.R.P. No. as or 2009:» .

I3E'i'WEEN:- D M] S. ESSAR PROJECT L'I'D.--,.... zoo JUBILEE OUTLET COMPLEX,' M 254 KM RB. ROAD, _ "

HONNURUGOLLARAHATTI, 5 DAVANAGERE - 577 556'. '-- Ai.

BY 'I'.K. NAGARAJ, * I
DIRECTOR,      D  »
AGED ABOUT7"5..Y'EA1?S.i   A ' 

_ -'E       . PETITIDRER

(BY SR1 'r. 1«;EsHm.rAMDR1*m*, ADVOCATE) AND:-E3 D THE .C0M§J1iSSIQ1S:'--ER_ DP' COMMERCIAL TAXES, VAMIJYA THEREGE KARAYALAYA, GA.R:D:+11NA(;AR, EEEEE . 'EEANGALQRE-..-5 9.

RESPONDENT MENON, ADDL. GOVT ADVOCATE) T'HiL'-'ECRP IS FILED {HS 16 OF K'I'EG ACT, 1979 AGA3NS}' THE ORDER DATED: 9.2.2009 PASSED IN ..RD.zAE--1/DVG/sMR--7, 13 as 14/03»-09, 'F.NO. 1144/08-09 DR"-.T:~IE FILE OF THE ADDLDOMMISSIDNER OF 'AAVCGMMERCIAL TAXES, ZONE-1, BANGALORE, HOLDING 'EHAT THE ORDER OF KARNATAKA 'I'RiBUNAL IN SI'A.NO. . ...--426/2008 DATED: 27.5.2003 FOR 2003-04 IS ON DlFFEREN'I' lSSUES OTHER THAN THE iSSUES INVOLVED IN TEHS REVISlON AND ACCORDINGLY CONCLUDING THE REVISION PROCEEDINGS. M These petiﬁons are coming oﬁ for GOPALAGOWDA, J., made the followmg: ;


0RDEﬁ A

Those Civil Revision    tho assesses

questioning the order by i':}j:e:_'*ITA\.§V.-7s_»i<:>I1al authority in relation to the asscssmcﬂt Karnataka Tax on Entry of referred to as 'KTEG Acf' __in::_4A"é?;1or'f)" 2003-04, 2004-05, 2095-Qﬁﬁ _foEioi§ing questions of lawn- i0. fa)' of entry tax in respect of Bitﬁmcn V which is a product " umganufaotuzjod from processing bitumen and _ other chomicals, is authorized and . jbgsﬁﬁed under entry Sl.No.1(viii) of Govémgiént Notiﬁcation FD 11 CE!' 2002 dated V£ﬂﬂ3ﬂB2mﬁnmmmmm~D?

(bl Whether Government Notiﬁcation No. FD 11 cm' 2002 dated 30.03.2002 as in Annextm:~i) authorizes levy of tax in respect of petroleum products other than those: speciﬁcally enumerated therein? M

legally justiﬁed in considering that . Emulsion as the same comxnereial eommod-iity Bitumen (asphalt) and thetefoie liable _ "

tax @ 5% under Govemrnaent FD 11 CE'? 2002 dated".so.o3.26o:3:'nae Annexurewagv? .

(d) Whether the revis§on.oniet:£1ateti'A§§S?._f}2.2009 as in ANNEXQRE - 596.2: in respect of Bitumen is» ifottaetistse legally .iustiﬁe£1}?, E > l . If point is given, the answer to other 'points 'is as they are inter~Iinked. have the above question of law No.1 for ' oijr eonsiieration.

anpesring on behalf of the petitioner -- assessee placed V reliance upon the State Government notiﬁcation V' : ___enumerating the goods for the pmpose of levying entry tax by the Assessing Authority. He has invited our attention to the notiﬁcanbn dated 30.3.2002 published in the Karnataka

3." 'F.N. Keshava Murthy learned counsel Gazette, Extraordinary pertaining to s1. products that is to say:

a) Lubxicating oil,

1)) Transformer oil, _ C) Brake ﬂuid and Clutch ﬂuid, ..

d) Bitumen (asphalt) "

c) Tar and others

4. At s1. No. : (viii;,(d) :1;e,..§ats1go{ the notiﬁcation itcm (viii) Bit11:111,£ﬁ1':{aspf1:1al§bt)' notiﬁed for the purpose of The rate of tax is prescribed in exercise of its power under Sub 3 of the KTEG Act. The learned oo':J._ﬁ:1selV' folﬂ petitioner has contended that V. «_ x(asj.p'l1a3.t,)_____is diﬂhrent ﬁom Bitumen 'Emulsion' diﬁbrt-tnt and distinct commodity, which inﬁéokves 'ﬁadozis xnamafactarmg' process as stated in the

--V (mag: ﬁom interact, which is made available to this 'A its perusal, wherein the Bitumen 'Ezmxlsion' has Lgof' ovaxious stages of manufacturing process thmugh "'"diﬁ'e1ent production equipments and its manufactuxing process is cntimly diﬂemnt ﬁom that Bitumen. He has invited our attention to other ﬁmram d through 8 prevail over scienﬁﬁc or technical meaning and piaeed reliance on the decision of the Division Court in the case of BUSINESS eoamis Vs COMMISSIONER OF coMMERc:{Ai -:

BANGALAORE 1985 ere _.s_7, eherein eWeo:xi's; az 1d~--._ Phrases used in the entries to V' commodity "paper" ié ~..V_consi£ie'ret1: with reference to the levy of Central Excise and Salt Act. 1.1} :i$Vfals0:;A'lAt1eI:tbi1 _:ti1atvA"ﬂ1_je_ telepeinter mils, adding mac}r?yi1'eeTV e6L£_iputeeVVVVoutput papers could be classiﬁed' as the scope of ently 125 of second sc1L:ied.ﬁle.."ofA¥£.$:'§'. 195?. The popular parlance the V' . "ipapexj" is iiiitierstood to mean as substance which E printing, packing or for drawing, decorating wall. The learned counsel strongly placed reliaraeeoxa the above said decision where the Division Bench A ff Liigis Conn: has referred to the said interpretation made by §?he Apex Court in the case of State of Uttar Pradesh Vs. Kores (India ) Ltd. 1977 39 em 8. (SC) in support of the case of the petitioner contending m ﬁon of law refened to supra would arise for our considerations. Therefore, he submits that the substantial quesﬁonof law at 10(3) is required to be answered in petitioner --- assessee as the revisional seriously erred both on facts and . commodity "Bitumen (asphaj.t)"

'Emulsion' by boxmwing e11t:rﬁe":w»Vh:':»ﬁ*:>»11:1 thewentgt ' V Excise Act, which cozﬂgl note-'heﬁe been bormwcti by the revisional authority whee _t31e'1i_:=:):vi:ies for entries in the of of Entzy Tax. Therefore, he sub:tAI'1i.ts"that to answer the above question in fazrour of iazssessee.

" --. learned AGA, Mrs.Geetha Menon has sought to.jusﬁf5?j_v;he*i;;.ottier of the revisional authority and placed the literature obtained from the website "Panchakauya" wherein Bitumen and Bitumen

-foimiilsion' are deﬁned. She further contends that the use of 't V' "Bitumen Asphait" and "Bitumen Emulsion", though the procees of manufacture of the above said goods has to undergo diﬁerent process at diﬁerent stages using diﬁezent \M/ machinaries and units, however the .' commociities is one and the same. Themfomn _ product at entxy S1.No. 1 (viii) Sub the should be given broader Vof commodity keeping in vie\5r,'y'*v,:fi:zc er "eeiih the V' commodities. She '_' "i1pon the judgment of the Supreme Commissioner of Saies Tax". Jaswant Singh Charan Bench decision of this Court 133:1 the Forms Ltd. Vs. Commissioner of Bangalore zeferned to sup;§§i2i." '"§'he decisioii ofthe Apex Court referred supra rightly the "words and phrases" in a popular sense of and the same has been considered and intex'p1e'teii.A«:é1ﬁer zeferring to different meanings and she submits-~ "that the said decision in all fours is applicable in T. Q' of the ﬁnding and reasons recorded by the Assessing .....?';uthoxity in levying entxy tax in respect of Bitumen 'Emulsion.' from the point of its utility though the same is diffenem: from Bitumen (asphalt). Therefom, she has \x~/ 11 in these Ievision petitions, does not ~ est}: consideration, hence she has requested this _ the same against the assessee c,c.:n:ﬁ n"}b impugned in these revision petit:ions.t__ A.

6. With zeference legal contentions, we have thevvttstiiamissions made at the Ba; with to Whether the question of law' _.peﬁtions would arise for our Vtgtxesﬁon of law framed in these therefore We answer the same careful consideration of the relevant litefatizre. the manufacturing process and V' . with refefeﬁce to the ﬁndings and reasons recorded authority in the backdrop of entry of ttgtigsclincts as stated in the notiﬁcation to Schedule 1(a). deﬁnition of "Bitumen" and 'Bituzraen Emulsion' A "it .aze""b_z'ieﬂy stated in the material coﬁectcd fnozn Panchakanya' srebsite, produced by Ieazzucd A.G.A. which reads as under: "Bitumen: Bitumen is exclusively used as binder in road construction and m.

"Bitumen: Bitumen is exclusively used ' as' e- V. binder in road consbzucizion and mainte'3ance}f '7' ' NBBUL imports 80/100 prime gxade bitiimezy direct from the reﬁnery in built a.nd_'1eﬁB..<§riti'in its self produced 160 1it1*e:"capaoity.«d;'u13ia' of 0.63 mm thickness. Its automa-tic.? ﬁiiing ; ~ equipped with photo--cens'ore'd._ device - .J::.aS,_"~., V' efficient and accurate Vﬁiling capacity. ISI~B}~}VU1,. is V; the only industry to aopyly 'oimmen",iIi~-., the kingdom. It provides test along with every consignment. ItAo.e9.:iv--.a}ao arrangegsite cielivexy on request:-._ V Bitumen Emulsion": .e1i_1iiI'sio11s are dispersion fof _ﬁn_e b_if'.§m6ﬂ particles in an aqueous.7"mediu3n;--».f:These-- liquid products are ﬁinctjenal ﬁg; u:2.e"a;o;cE ﬁnd afwide application in road * a. c;>nsti9a'cﬁoo:V and ""tnaintenanoe, water j:3r0of1I1g,* .S9_iI'vstabi}i¢»:ation and in many other epeoia1icircu"m,stai1cesV.where cold application of bitumen. is'V.desi1ab'Li_. 'Bitumen emulsion may be of Cationic or Anionic type. Cationic bitusaaen ;'e:o111sio11,_Vnowadays, has; become more popular " izttusc becaue.e..of its better qualities than that of iiﬁumeti".

'decision. relied upon by the learned counsel for in the case of Commissioner of Sales Tax, Q ii/iae¥.i;1yaiiP1*adesh, Indore -Vs.- Jaswant Singh Chaxan Singh ii'.-'.;e.;iai'<.%1"1Ai-.115 decisioa of High Court of Madhya Pradesh Ieferred Xiopra where-in after interpzetaﬁon of Word "coal", it has been held that under commodity classiﬁcation that the popular meaning and commercial sense meaning should prevai} over \m/ scientiﬁc or technical meaning and held include chamoal also. The said decision has bcoii the decision of the Division Bench Zofﬁlis. Ct;i14*1l.I'1_'..lJ:£AK2'V:ﬂ_'i¢f',VV€22i1Af.'-EC of Business Forms Limited ~--Vs.-- Coming issionefof Com. 1;,"

Taxes, Kainataka, Bangaloro. 13.9 V the Division Bench of this decision of the Apex Court V ----Vs.-- Kores (India) Limited (1927) 3.:{S§f:),_i the Apex Court had consiljk-V1jocl_ used in the Uttar Court after referring to variotio ﬁnally obscured at page 1 1 . '£31113 'IIi:4"i;:=a o1ea.2:f.t11és:;t ixfiipopular parlance, the Word 'paper' is a substance which is used for "or printing, or for packing or for drawing on, i¢i~ £o:~ doooiégfihg, or for covering the walls'.

ii' Having said so in the said decision, further the Court has stated that this should be the meaning with we have to understand the scope of the catty 125 in that case also. The Apex Court has further held that if the goods sold by the assesses is generally used for writing, 14 prixlting, packing or for drawing, decorating or wall, then they must be classiﬁed as _ understood and further heid tgiéi bliﬁxe papef presented in plain sheets or _in A61"

Paper may be in small pieces bigxroipls.' or thin, light 01" heavy,vb1eached"o1:§:nIGu_§ed, aa{:co1ﬁing to the requirements of Court has substantially of levying tax to the by way of noﬁﬁcatzon, pAV'fF10e.':'i3':r:,tifie:apﬁ01:a: 'am 30.03.2002 referred to supra ho doubfcl;-;a§4iy. at S1.No.1(viii) the petroleum products,"<,U ndef " heading, between Bitumen (asp30aiit}. is thc.._VVeomz';uodity speciﬁed for the purpose of The use of Bitumen (asphalt) and Bitumen. i'S:'vfbr one and the same purpose. Bitumen "em111si__cm".,is used for road construction and maintenance, yvater.'p1€:)oﬁng, soil stabilization and in many other special V."V'.AAcireﬁmstances Wham cold application of bitumen is V' flﬁesirable. Whereas the Bitumen (asphalt) is exclusively used as binder in road construction and maintenance. Themfom, Bitumen (asphalt) and Bitumen "emulsion" axe used for road 0/ E5 construction. Therefore, decision of the Supreme' referred to above which is followed by the this Court in the caee referred to supra, with'i*eg.:-njd:

common parlance, the mea131'n'g""'of«. '._{e§s;§I:ai'£) Bitumen "Emuision" keeping A' (the commodities is for the same Gzxexie-.foi"ehfhe above" V L' decisions with all foursfare ap1a1ie§ab}e..fLo the" the case in support of the Assessihﬁgo ue1";"§;'theo Apex Court in the case referred to.»supzg.p};:=;«r3ed the entry ﬁom the Central" Act The eoneivésioh arrived at by the Revisional _A by the Supreme Court decisioiif of this Court xeferxed to supra, Aeet.;r;V1iI1g1,."-we answer the above substantial V' . queetioin of iaw the assessee and conﬁrm the order of _ :~m_.visjo"ng.1 atatixcgitgr.

« 9. . 'i._F.or the foregoing reasons, the Civil Revision P€titi0iiS_ aceoxeiingly dismissed. \\ _ Séfm Etzﬁge Séfé NM'? Ck :f""?'f3 {J 2 &. ma

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