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"Where any dealer liable to pay tax under this Act uses any goods other than declared goods purchased by him or through commission agent as raw or processing materials or consumable stores (irrespective of whether such goods are prohibited goods or not) in the manufacture of taxable goods and despatches any of the goods so manufactured to his own place of business or to his agent's place of business situate outside the State but within India such dealer shall be liable to pay, in addition to any tax paid or payable under other provisions of this Act, a purchase tax, a purchase tax at the rate of two paise in the rupee on the purchase price of such raw or processing materials or consumable stores used in the goods so manufactured and despatched and accordingly he shall include the purchase price thereof in his turnover of purchases is his declaration or return under section 40 which he is to furnish next thereafter :

(1) Where a dealer liable to pay tax under this Act purchases either directly or though commission agent any goods; and (2) Uses them as raw material or processing material or consumable stores in the manufacture of taxable goods.

63 .For attracting charge under the section no other event is contemplated. Adopting the judicial dictionary employed by the Supreme Court in Goodyear case [1990] 76 STC 71, taxing event is that which attracts tax and that charging event is the event the occurrence of which immediately attracts the charge and that charging event cannot be postponed to the occurrence of the subsequent condition. In that event, it would be the subsequent condition the occurrence of which would attract the charge which will be taxable event. It has to be held that the moment goods are purchased and used by the purchasing dealer as raw or processing material or consumable stores in the manufacture of taxable goods, levy gets immediately attracted under the section. As will be seen while discussing the question of user tax, taxing event is the purchase of raw materials, etc., in the State and which are ultimately used in manufacture of taxable goods. That charging event centering round purchase of raw materials, etc., remains dormant till the goods are actually put to use in manufacture of taxable goods. It gets activised then. These events have nothing to do with the ultimate manufacture of taxable goods. It is easy to visualise that ultimately taxable goods may not be manufactured even if raw or processing material or consumable stores might have been utilised in the manufacturing process. For example, even after utilisation of such raw material in the manufacturing process, the finished goods may turn out to be defective goods which cannot be sold. Therefore, manufacture of the taxable goods may have been complete and the whole lot may have to be destroyed even after utilisation of such material in the manufacturing process or before process or before process gets completed, it may be intercepted and the final product may not emerge, still, liability to pay tax under the section would emerge as user of raw material or processing material of consumable stores in the manufacturing process has taken place. Therefore, it is impossible to find nexus of the charge with the ultimate manufacture of taxable goods. It is now well-settled that excise duty is a duty or levy on the manufacture of goods. Impost is on the manufacture of goods and the new goods which are manufactured have to bear the charge of tax. In the purchase tax levied on raw materials which are inputs, there is no contemplation of the ultimate output. It is tax on purchased inputs which has been brought as inputs in the manufacturing process and there charge settled and gets exhausted. Consequently, by no stretch of imagination, such a charge can be said to be imposing excise duty on ultimate manufactured goods. The impugned section imposes tax on the dealer as purchaser and not as manufacturer of ultimate manufactured goods. We may in this connection profitably look at a few decisions of the Supreme Court and the Federal Court. In the case of Ganga Sugar Corporation Ltd. v. State of Uttar Pradesh [1980] 45 STC 36 (SC); AIR 1980 SC 286 the Constitution Bench of the Supreme Court was concerned with the question whether levy under the U.P. Sugarcane (Purchase Tax) Act, 1961, was covered by entry 54 of the State List or whether it was imposing excise duty which was beyond the legislative competence of the U.P. State Legislature. Answering the question in favour of the State Legislature, it was held that levy could squarely fall within entry 54 of the State List and would impose no excise duty as the tax was imposed on purchase of sugarcane which was raw material and which was utilised in the manufacture of sugar. In para 53 of the Report (at page 52 of STC), Krishna Iyer, J., speaking for the Supreme Court made the following pertinent observations :

"(4) The goods purchased are goods, the sale or purchase of which is liable to tax under this Act;

(5) Such purchase is in circumstances in which no tx is payable under section 3, 4 or 5, as the case may be."

66. Analysing these ingredients of section 7-A, the aforesaid observations wee made by the Supreme Court. It is true that in the present case, there is a clear definition of taxable goods; while in Tamil Nadu Act, on the ingredients of sub-sections (4) and (5), the Supreme Court held that these sub-sections contained definition of taxable goods. However, the result remains the same. Ingredients of sub-sections (4) and (5) of Tamil Nadu Act are parallel to the provisions found in the definition of taxable goods in section 2(33) of the Gujarat Act. Therefore, it must be held on parity of reasoning, that the phrase "uses them as raw material or processing materials or consumable stores in the manufacture of taxable goods" as employed by section 15B would mean user of such raw material in the manufacturing process for manufacturing generally taxable goods under the Act and ultimately, in given circumstances, such manufactured goods may not attract tax under the charging provision and still they would remain taxable goods. It is, therefore, not possible to agree with the contention of the petitioners that charging event under section 15B would be manufacture of taxable goods. As already discussed earlier, charging event would stop short at the stage of utilisation of the purchased raw material in the manufacturing process of taxable goods. Ultimately such taxable goods may emerge or not. That would be totally irrelevant, but the charge would operate under the section of its own the moment goods are purchased and utilised as raw materials, etc., in the manufacturing process of generally taxable goods. Our attention was also invited by the learned advocates for the petitioners to a decision of this Court in Nowroji N. Vakil & Co. v. State of Gujarat [1979] 43 STC 238. In that case, the Division Bench of this Court was concerned with the question whether the assessee who had purchased certain raw material under a certificate was liable to pay purchase tax under section 16, when it was found that the raw material purchased by him was not ultimately utilised for manufacturing taxable goods. It is obvious that if raw material is utilised for manufacture of taxable goods the goods would bear sales tax at the stage of sale. But if the manufactured goods are exempt from sales tax, then, the condition of the certificate would get breached and the liability to pay purchase tax on the raw material would subsist. On the facts of the case, it was found that the assessee-company which was manufacturing stoneware pipes, firebricks and lime, required as raw material for its business, fireclay, which were taxable goods under the residuary entry 13 of Schedule III of the Act. The assessee purchased fireclay against declarations in form 19 without payment of tax. Out of the goods manufactured by using the goods so purchased, a certain quantity of goods was sold against a certificate in form C, without recovery of any tax, to an electricity company, which was a certified electrical undertaking within the meaning of entry 5 of the Schedule to the Government notification dated 29th April, 1970. The Sales Tax Officer took the view that the assessee, contrary to the certificate given by it in form 19 at the time of purchase, had used the fireclay as raw material in the manufacture of goods, the sales of which could not be taxed and that, therefore, purchase tax was leviable under section 16 of the Act is respect of such purchases of fireclay. The Appellate Assistant Commissioner of Sales Tax and the Tribunal agreed with the view of the Sales Tax Officer. The High Court also agreed with the view of the Tribunal. It was held that in view of the language used in the certificate as well as in section 16(1) and in the context and collocation, the intention at the time of purchase or the taxable nature of the goods when manufactured are wholly irrelevant factors. If taxable goods were purchased against the certificate in form 19 without payment of tax and if such goods were used contrary to the certificate in the manufacture of goods for sale, which were not exigible to tax at the point of sale, then section 16 would come into the picture and purchase tax would become leviable upon the turnover of purchases of the purchasing dealer. The aforesaid view of this Court is confirmed by the Supreme Court in the later decision reported in [1981] 47 STC 376 (Hindustan Brown Boveri Ltd. v. State of Gujarat). In our view, these decisions cannot be of any avail to the petitioners. If the condition of a certificate issued under section 16 is breached, then on the express language of section 16, liability to pay purchase tax would arise and the section in terms lay down that where any dealer or commission agent has purchased any taxable goods under a certificate given by him under section 12 or 13, contrary to such certificate, the goods are used for another purpose or are not resold or despatched in the manner and within the period certified, then such dealer or commission agent shall be liable to pay tax on the purchase price of the goods purchased under such certificate. It is difficult to appreciate how these decisions can be of any avail to the petitioners. In the present case, once raw materials are utilised in the manufacturing process for manufacturing taxable goods which are generally taxable under the Act, charge under section gets attracted. Ultimately, if the manufactured goods are found not to bear tax, then the question of refund at the stage of assessment may arise. But that by itself would not whittle down the charge or postpone it in my manner as suggested. It is also not possible to agree with the contention of the learned advocates of the petitioners that under the present section, the charge would extend even beyond the manufacture of taxable goods till manufactured taxable goods actually bear the tax. Actual liability to pay tax is quite distinct from general taxability of the goods manufactured, as laid down by the Supreme Court in Kandaswami case [1975] 36 STC 191. In fact, once purchased raw material is utilised in the manufacturing process, charging event gets completed under the section and the aspect whether ultimately the manufactured goods emerge or not, would pale into insignificance as seen earlier. It is not the taxing event under the section. Once taxing event takes place, subsequent event pales into insignificance. Thus, it is not possible to agree with contention of the learned advocates of the petitioners that the impugned provision seeks to impose excise duty or tax in the nature of excise. Decision of the Bombay High Court in [1990] 79 STC 255 (Hindustan Lever Ltd. v. State of Maharashtra) strongly pressed in service by the learned advocates of the petitioners with respect cannot be agreed to. It is difficult to agree with the reasoning of the Bombay High Court in the aforesaid decision to the effect that under section 13AA, levy takes effect on the occasion of manufacture and, therefore, levy is in the nature of excise. Such a line of reasoning is not countenanced by the section. Neither in section 13AA of the Maharashtra Act nor in section 15B of the present case levy is imposed on the manufacture of taxable goods. As laid down by the Supreme Court in Goodyear case [1990] 76 STC 71, taxable event is one on the occurrence of which charge gets immediately attracted. In our view, charge gets attracted when the raw materials are purchased and used in the process of manufacture of taxable goods and it has nothing to do with ultimate emergence of taxable goods. They may emerge or may not emerge, they may remain taxable goods or may not remain taxable goods. Charge under the section is not concerned with these eventualities. Under these circumstances, with respect, it is not possible to agree with the view taken by the Bombay High Court in Hindustan Lever case [1990] 79 STC 255. In our view, section 15B does not cover the field envisaged by entry 84 of the Union List, and cannot be termed as imposing any duty in the nature of excise. In this connection Mr. Kaji submitted that the impugned provision can be read as under : A dealer purchases raw material, processing material or consumable stores, etc., and manufactures taxable goods out of them and accordingly, it would amount to imposing tax in the nature of excise. It is not possible to agree with this contention, for the simple reason that the section couched in different term cannot be re-read on the basis of supposed redrafting so as to make it one imposing excise duty, if the Legislature has not thought it fit to utilise such terminology. On the other hand, the learned Advocate-General was right when he contended that as per the phraseology employed by the section, tax becomes payable when the manufacturer/dealer purchases raw material, processing material or consumable stores and uses them in the manufacturing of taxable goods. The section nowhere contemplates the phraseology like "and use them for manufacture of taxable goods". Consequently, the moment goods are purchased as inputs and user of the purchased raw material, etc., is made in the manufacturing process and they enter as inputs in the manufacture of generally taxable goods, charge under the Act gets completely settled and attracted. Such charge has nothing to do with ultimate stage of manufacture of taxable goods nor does it cover it in its sweep.

69. In this connection, the emphasis put by the learned advocates for the petitioners on the phraseology in the section to the effect "where a dealer purchases any taxable goods and uses them as raw or processing materials or consumable stores in the manufacture of taxable goods then ...." for submitting that taxable event occurs when purchased taxable goods are used as raw or processing material or consumable stores in the manufacturing process especially in the light of the word "then" used in the section, also cannot be of any avail. In this connection, the learned Advocate-General rightly invited our attention to the fact that the word "then" is an advert and it connotes two eventualities - (i) reference to the time and (ii) reference as to the contingency, meaning thereby, it either means at that time or in that case. In the context of the section, it is obvious that the word "then" does not refer to time when use is made in the manufacturing process of such purchased raw materials, etc. But it only means in the case, such purchased raw materials, etc., are used in the manufacturing process. Taxable event under the section becomes complete when taxable goods, viz., raw materials, consumable stores, etc., are purchased in the State with the obvious intention of utilising them in the manufacturing process as input and the moment such intention gets fructified by such actual user. It is apparent that taxable event which becomes complete on purchase of such materials, etc., in the State by the dealer, may remain dormant till such purchased material is actually used in the manufacturing process. The moment such use is made of the purchased raw material, the charging event would get activised. It has to be kept in view that under entry 54 of the State List, the State Legislature is entitled to tax sales and purchase of goods. It is also well-settled by a catena of decisions of the Supreme Court right from Tata Iron & Steel Co. Ltd. v. State of Bihar [1958] 9 STC 267; AIR 1958 SC 45 that the term "sale of goods" as employed under entry 54 of the State List has the same meaning as assigned to it under the Sale of Goods Act, 1930, as we have already noted earlier. Consequently, before a legislation can in pith and substance, be said to be dealing with sale or purchase of goods, it must be shown that it focuses its attention on such transactions of purchase or sale of goods. These goods remain the focal point and at the centre of the charging event. If goods are so traced and dealt with by the section their purchase or sale would be taxing event and the conditions in connection with payability of the tax on such transaction of sale or purchase at these goods would only imply description of the goods and condition subsequent to completion of taxable event. It must, therefore, be held that section 15B in pith and substance imposes purchase tax on purchase of concerned goods which are ultimately used in manufacturing process as inputs and the later phraseology "uses them in manufacture" as employed in the section only deals with description of the charged goods and represents subsequent event. In this connection, it is apposite to refer to the decision of the Supreme Court in Goodyear case [1990] 76 STC 71 especially observations at pages 95, 111 and 114 thereof which are already extracted in extenso in the earlier part of this judgment. A conjoint reading of those observations makes it clear that the Supreme Court in that case was concerned with an eventuality wherein tax was imposed on dispatch of entirely different types of goods out of State, and it was held that it was tax in the nature of consignment tax covered by entry 92B of the Union List, and, therefore, tax on such goods would not remain within entry 54 of the State List and that in view of such a texture of the provisions, the argument of the learned advocate for the State authorities that taxing event was to have taken effect at the time of purchase of inputs, raw materials, which remained dormant and would get activised when the input embedded in the ultimately manufactured goods got despatched out of the State, was repelled as such argument could not be countenanced in the fact of the express language of the provisions dealt with by the Supreme Court and which clearly referred to and tried to tax entirely different manufactured commodity which had nothing to do with the original purchase of inputs. Such is not the position in the present case. As seen earlier, the section does not refer to the dispatch of ultimately manufactured goods out of the State. It is, therefore, not levying any consignment tax nor is it concerned with any levy on ultimately manufactured goods out of inputs. Consequently, it remains in the domain of purchase tax imposed on inputs which are purchased in the State and which are ultimately used in the manufacturing process. It is obvious that, there would remain no occasion to collect any sales tax on such inputs as they are never put to sale in the State and they get used up in the manufacturing process. Hence qua such purchaser of raw materials who uses them in the manufacturing process as inputs, purchase tax can legitimately be imposed and it remains a genuine purchase tax. In the light of the express language of the section, therefore, the argument of the learned advocates for the petitioners that the phrase "uses them in the manufacturing of taxable goods" denotes taxable event and not the earlier part of the section dealing with purchase of such raw materials, cannot be countenanced. We may not at this stage that the Constitution Bench decision of the Supreme Court in Andhra Sugars Ltd. v. State of Andhra Pradesh [1968] 21 STC 212 clearly answers the question against the petitioners and puts the controversy beyond the pale of any doubt. In that case, the Supreme Court was concerned with the question whether tax imposed by the Andhra Pradesh legislation levying purchase tax on sugarcane required for use in manufacturing of khandsari sugar can be legitimately imposed by the State Legislature under entry 54 of the State List. The Constitution Bench decision in terms held such tax to be within the legislative competence of the State Legislature, as covered by entry 54 of the State List and the taxing event was construed to be the event of purchase of such raw materials are required for use in the manufacturing process. The learned advocates for the petitioners submit that the phraseology in the aforesaid provision was different as compared to the present phraseology in the aforesaid provision was different as compared to the present phraseology of section 15B, as there, the words used were "required for use in manufacture"; while here, the words used are "purchase of raw materials and use in the manufacturing process". In our view, this is a distinction without any difference. When raw materials are purchased as they are required for use, it is obvious that they have to be used for that purpose subsequently and when raw materials are purchased and are subsequently used as such in manufacturing process, it would become obvious that they were purchased only because they were required to be so used and were in fact used. Applying the ratio of the aforesaid decision of the Supreme Court, it must, therefore, be held that in the present case also, taxable event is complete when taxable goods are purchased as raw material, etc., and there subsequent use as such only fortifies such requirement underlying initial purchase. It is also interesting to note that there are two decisions of the Supreme Court, wherein on construction of pari materia provisions, it was held that tax sought to be imposed was purchase tax. One such decision is rendered in connection with Madhya Pradesh legislation in the case of Ganesh Prasad Dixit v. Commissioner of Sales Tax [1969] 24 STC 343 (SC). In that case, section 7 of the Madhya Pradesh General Sales Tax Act, fell for consideration of the Supreme Court. It provided that every dealer who in the course of his business purchases any taxable goods, in circumstances in which no tax under section 6 is payable on the sale price of such goods and either consumes such goods in the manufacture of other goods for sale or otherwise or disposes of such goods, etc., shall be liable to pay tax. The aforesaid phraseology ran almost parallel to the phraseology of section 15B of the present Act. Such a tax was considered to be genuine purchase tax on construction of the provisions. It is true that in that case, the Supreme Court was not concerned with the legislative competence of the Madhya Pradesh Legislature. Still, from the point of view of taxable event, the decision clearly contraindicates the contention of the petitioners on such a pari materia provision. Second decision of the Supreme Court is rendered in the case of State of Tamil Nadu v. Kandaswami [1975] 36 STC 191. Section 7-A of the Madras General Sales Tax Act, 1959 which was considered in the said decision provided as under :