Orissa High Court
M/S. National vs State Of Odisha on 10 March, 2025
IN THE
HE HIGH
H COURT OF ORISSA AT CUT
CUTTACK
O.J.C. No.6567 of 1994
M/s. National
onal Aluminum Co. Ltd. .... Petitioner
versus-
State of Odisha
disha and others ..... Opposite Parties
Advocatess appeared
appe in this case:
For petitioner
ioner : Mr. Sanjit Mohanty, Senior
Senio Advocate
Mr. S.C. Sahoo, Advocate
ocate
Mr. A.R. Mishra, Advocat
vocate
Mr. I. Acharya, Advocate
ocate
site parties
For opposite : Mr. D. Mohanty, AGA
(for O.P. no.1)
Mr. Sunil Mishra, Standin
tanding Counsel
(for Revenue)
CORAM:
THE HON'BL
N'BLE MR. JUSTICE ARINDAM SINH
SINHA,
A
ACTING CHIEF JUSTICE
AND
THE HON'BLE
HON MR. JUSTICE M.S. SAHOO
HOO
JUDGMENT
———————-
——————————————————————
——————————-
Dates off hearing:
hear 17th September, 2024,
3rd December, 2024 and 10th March,
M 2025
Date of judgment:
judgm 10th March, 2025
———————-
——————————————————————
——————————-
ARINDAM
AM SINHA,
SI ACJ.
1. ch on 5th September,
Thee writ petition came before this Bench2024. Text
xt of oorder made that day is reproducedd below.
belo
O.J.C. no.6567 of 1994
Page 1 of 19
“1. Mr.
r. Mohanty, learned senior advocate
ate aappears on
behalf
lf of petitioner and submits, under challen
allenge is order
dated 16
16th June, 1994 made by the Additional
Commiss
missioner, Sales Tax, on restoration
n oof the writ
petition
on by
b the Supreme Court upon order
der dated 31st
October,
ber, 2023.
2. Mr. Mishra, learned advocate, Standin
nding Counsel
appears
ars oon behalf of revenue.
3. Recor
ecords in the case are old and fragile.
e. M
Mr. Mohanty
submits,
its, he will hand up copy of the writ
rit ppetition and
impugned
gned therein order disclosed as annexure-1.
4. List
ist on
o 17th September, 2024.”
(emp
(emphasis supplied)
2. Mr.
r. Mohanty,
Moh learned senior advocate appear
appears on behalf of
petitionerr and Mr. D. Mohanty, learned advocate,
advoca Additional
Government
ent A
Advocate for State. Mr. Mishra,
a, learned
lea advocate,
Standing Coun
Counsel appears on behalf of revenue.
enue. Upon the writ
having had been moved on 17th Septem
petition havin eptember, 2024, we
recorded our understanding
u in order made that
at day
day. Paragraphs 3
and 4 from
m said order are reproduced below.
“3. W understand charge no.3 to be,, pet
We petitioner had
utilized
ed the goods purchased under Form-C
C for
fo purposes
other than
t generation of electricity,
icity, namely,
formation and transmission. In dealin
transform aling with the
chargee th
the authority, in impugned order, relied
elied on rule 13
O.J.C. no.6567 of 1994
Page 2 of 19
in Centra
entral Sales Tax (Registration and Turno
urnover) Rules,
1957. The goods dealt with under the charge
rge aare several,
of which
ich some have been accepted. The autho
uthority did not
accept
pt most
mo of the goods as covered by rule
le 13 and found
petitioner
oner to be guilty of the charge, in respe
espect of them.
The auth
authority is deemed to have found on
n facts.
fac We are
on judic
udicial review of such findings. Parties
Part are to
demonstr
nstrate that findings in respect of goods not
accepted
pted were shown in impugned orderr to have been
used for either transformation or transm
ansmission of
electricity
ricity. Opinion of or on necessityy of user for
generatio
ration of electricity will not do.
4. M
Moving on to charge no.5 it is seen that an analysis
of categ
ategories of goods mentioned in the certificate
including
ding subsequent addition of cement in relation to
annexure
xure-5 (mentioned in the charge), is nec
necessary. We
see that
hat some of the goods coming under
er ccharge no.5
have been referred as dealt with under charge
arge no.3. Here
we make
ake clear that if an item of goods is cov
covered under
charge
ge no.3,
no it cannot be subject matter of cha
charge no.5 as
‘not covered’.
cove Our this observation is to direct
rect attention of
the parties
parti for adjudication of the findings
ings on facts,
whether
her contains
c perversity or irrationality. This
Th will not
preclude
ude the parties or either of them to su
subsequently
arguee on scope of the certificate, on covering
ering the items
regarding
rding generation and distribution of electr
lectricity.”
(emp
(emphasis supplied)
O.J.C. no.6567 of 1994
Page 3 of 19
3. Next hearing
he of the writ petition was on 3rd December,
De 2024.
Paragraphs
hs 1 to 5 in order made that day are reproduc
produced below.
“1. Mr.
r. Mohanty, learned senior advocate
te resumes
r his
argument
ment in continuation of record in order
der dated 17th
Septembe
mber, 2024. He submits, his client
lient obtained
registrati
tration under Central Sales Tax Act, 1956 by
obtaining
ning certificate of registration in respect
ect oof two of its
units.. The
There were two registration certificates
ates, one valid
from 16t
16th September, 1981 and the other
her from 16th
August,
st, 11982. Under the certificates, partic
articularly the
latter,, his client was entitled to pay concessio
essional rate of
tax for
or inter-state
in purchase of goods or clas
class of goods
specified
fied for the purpose of sub-sections (1) and (3) in
sectionn 8, on rates specified, subject to provisi
ovisions of sub-
sectionn (4
(4). The concessional rate of tax paya
ayable, subject
matterr of challenge in the writ petition, is unde
nder clause (d)
in registr
gistration certificate valid from 16th Au
August, 1982.
The clause,
clau including handwritten endor
dorsement, is
reproduce
duced below.
“(d)
(d) for use in the generation or distribu
tribution of
elect
electricity or any other form of power.
r. … … list
attac
attached”
2. Hee ha
hands up two charts in respect of ccharge 5 in
relation
ion tto item mentioned in charge 3 and
nd another, in
respect
ct of charge 3. He demonstrates from
m th
the chart onO.J.C. no.6567 of 1994
Page 4 of 19
charge
ge 5 that all items mentioned in the charge
arge also found
mention
ion uunder charge no.3, except cement.
t. R
Referring to
the list
st attached,
at as mentioned in the second
nd ce
certificate of
registrati
tration, he demonstrates, the list includes
des cement. He
submits,
its, cement was used for making founda
undation of the
generatin
rating plant.
3. Movi
oving on to the other chart he submit
bmits, it bears
reference
ence to articles/items of equipment purch
urchased by his
clientt for purpose of installation of the plantt for generation
of electr
lectricity. Generation includes transm
nsmission and
distributio
bution. He relies on judgment of coordin
ordinate Bench
in Natio
ational Aluminium Co. Ltd v. State
tate of Orissa,
reported
rted in (1994) 93 STC 529 (Ori),
), pa
paragraph-8
containin
ining view expressed that transform
formation and
transmiss
mission would obviously come within
in th
the ambit of
ibution of electricity. Referring to sa
distributio said second
certificate
icate of registration he points out, it al
also includes
transmiss
mission and distribution of electricityy as mentioned
therein.
in. The judgment was not interfered
ed with
w by the
Supreme
eme Court on revenue having filed for
or special
sp leave
ppeal. There can be no contention raised,
to appea rai to be
entertaine
tained, regarding generation, distrib
stribution and
transmiss
mission of electricity as done by his client.
ient.
4. He submits, in the chart (dealing with charge 5)
columnn 4 gives extract of reasoningg rrelevant to
article/eq
le/equipment mentioned as several items
tems in it. The
reasons
ns ggiven stand in face of the provisionn inv
invoked. TheyO.J.C. no.6567 of 1994
Page 5 of 19
are claus
clause (b) under sub-section (3) in sec
section 8 and
clauses
es (b)
( and (d) under section 10. Application
App of
penalty
lty uunder section 10A, made by thee oofficer, was
misconce
nceived. It will be sufficient for uss to reproduce
below cla
clause (b) in sub-section (3) of section
on 88.
xxx xxx xxx
5. Mr.
r. Mishra, learned advocate, Standin
nding Counsel
appears
ars on behalf of revenue. He willl be heard on
adjourned
rned date. Revenue is put on notice
ice that under
charge
ge 5, regarding goods purchased as are outside the
registratio
tration certificate, the only item of goods
oods is cement.
Petitioner
ioner has given explanation and argumen
ument has been
made on its behalf. Revenue is to answer. Unde
nder charge 3,
wheree pe
penalty has been imposed by applying
ing clauses (b)
and (d) in section 10, revenue is to demonstra
nstrate that the
officer
er fo
found the items or goods mentionedd in the charge
as were n used by petitioner. It is only after
ere not fter tthat we will
move on to see whether reasonable excusee for
fo not using
them was furnished.”
(emp
(emphasis supplied)
Today, the
he writ
wri petition has been called for Mr.
r. Mishra
Mish to make his
submissions.
4. Mr.
r. Mishra,
Mis draws attention to the registra
egistration certificate
m 16th September, 1981, added to on sever
valid from several dates, lastly
ct from 2nd May, 1994. He begins withh addressing
with effect addr on steel.
O.J.C. no.6567 of 1994
Page 6 of 19
He submits, list
lis attached to the certificate in columns
lumns (b) (c) and (d)
give particular
ticulars of construction plant to include,
ude, in
inter alia, steel.
Moving on to addition made on 4th December,, 1982 he points out,
cement stood added. According to him, the revis
revisional authority
correctly dealt with steel in drawing analogy off cons
consideration made
in respect of cement.
ce
5. Thee revi ted 16th June, 1994 in
revision was dealt with on order dated
Revision Case no.CU-II-1075 and 1076/89 dealing with period 24th
aling w
February,, 1982 to 30th June, 1986. Mr. Mishra
hra po
points out to the
consideration
ation under charge no.5 in respect of cemen
cement, in the order.
Relied upon
pon passage
pa is reproduced below.
“Provisi
ovisions of law as embodies U/s.8(3)(b)
b) of the C.S.T./
Act read
ead w
with rule 13 of the C.S.T.(R. & T.) Rul
ules, entitle a
regd. dea
ealer to purchase goods intended forr us
use by him as
raw mate
materials, processing materials, machin
chinery, plant,
equipmen
ment, tools, stores, spare parts, accessor
ssories, fuel or
lubricants
cants in the generation or distributionn of electricity
(so farr th
this case is concerned). The item ceme
ement does not
answer
er to the requirement of these provisions
ons in as much
as it is ne
neither a raw material nor processing
ng m
material nor
machiner
inery, plant, equipment, tools, stores,
es, sspare parts,
accessori
ssories, fuel or lubricants, essential for tthe purpose
of genera
neration or distribution of electricity.”
(emp
(emphasis supplied)
O.J.C. no.6567 of 1994
Page 7 of 19
He moves
es on to
t subsequent part of the order dealing
ealing with steel. He
submits, the analogy
an on cement was correctly drawn upon, to make
the finding
ng in respect
r of steel.
6. Hee relies on view taken by a Division Bench
ench of this Court in
ponge Iron Ltd. v. State of Orissa, reporte
Ipitata Spong reported in (1991) 71
CLT 132 and
an available at 1990 SCC OnL
OnLine Ori 23,
paragraphh 10 (SCC OnLine print). The paragraph
agraph is reproduced
below.
“10. There
Ther is substance in the submissions of the
th counsel
for thee opposite
op parties. Rule 13 clearly exclude
cluded cement,
steel, etc.
etc., from the category of goods intended
ded for use for
manufact
facture or processing of goods. The
he petitioner,
therefore,
fore, committed infraction of section 10(d)
10 of the
Central
ral Sales
S Tax Act thereby attracting se
section 10A
providing
ding for imposition of penalty. But,, in our view,
there exi
exists an extenuating factor which should
sho go to
lessen
n the burden of the petitioner. The cond
onduct of the
nue has not been free from blame. Goo
Revenue Goods, which
are not
ot uused in the manufacture or processing
sing of goods,
were spe
specified in the certificate of registra
istration. The
heading
ing at
a the top of the list of goods was inap
inappropriate.
Therefore
efore, having given our anxious considera
deration to the
matter,
r, we
w hold that the amount of penalty shall equal the
amount.
nt. Which the petitioner would have paid otherwise
on the
he goods
g had it not purchased thee sa
same at aO.J.C. no.6567 of 1994
Page 8 of 19
concessio
essional rate 9tilizing “C” forms, minus
us the
th amount
already
dy ppaid by it as tax thereon. The valuee of the goods
for thee purpose
pu of imposition of tax shall be ddetermined
by thee Sal
Sales Tax Officer, Keonjhar Circle, after
fter deducting
the value of refractories and the valuee oof various
equipmen
ents, weighing machines, weigh bri
bridge, etc.,
which,
h, in an earlier paragraph we have
ve held, are
essential
tial for and integrally connected
ed with the
manufact
facture of goods.”
(emp
(emphasis supplied)
Mr. Mishra
hra submits,
su taking clue from the judgment
gment the revisional
authority reduced
reduc rate of penalty to be the rate of tax.
7. Mr.
r. Mishra
Mis relies on judgment of the Supreme
upreme Court in J.K.
Cotton Spinn
Spinning and Weaving Mills v. Sales Tax Officer,
reported in AIR 1965 Supreme Court 1310,
1310 paragraph 11
reproduced
ed bel
below.
“11. Building
Buil materials including lime and
nd ccement not
required
red in the manufacture of tiles for sal
sale cannot,
however,
ver, be regarded within the meaning of R
Rule 13, as
raw mate
materials in the manufacture or processing
ssing of goods
or even
ven as “plant”. It is true that buildings
ngs must be
construct
ructed for housing the factory in whichh ma
machinery is
installed.
lled. Whether a building is a “plant”
t” within
w the
meaning
ing of Rule 13, is a difficult question
n on which no
ion need be expressed. But to qu
opinion qualify for
O.J.C. no.6567 of 1994
Page 9 of 19
specificat
fication under s. 8(3)(b) goods must bee in
intended for
use of the nature mentioned in Rule 13,
13 in the
manufact
facture of goods. Building materialss use
used as raw
materials
rials for construction of “plant” cannot
not be said to
be used goods. The
sed as plant in the manufacture of go
Legislatu
lature has contemplated that the goods
ods to qualify
underr s. 8(3)(b) must be intended for use as raw
materials
rials or as plant, or as equipment in thee ma
manufacture
or proce
rocessing of goods, and it cannot be said that
building
ing materials fall within this description.
ion. The High
Courtt w
was, therefore, right in rejecting thee cla
claim of the
Company
pany in that behalf.”
(emp
(emphasis supplied)
So far as charg
arge no.3 is concerned, Mr. Mishra relies on findings of
the revisional
sional authority. He submits, goods includ
including road roller
and cranes,
es, pavement
pa breaker and others weree righ
rightly held by the
authority as no
not necessary for purpose of generation
ration or distribution
of electricity.
icity. T
They are not integrally connectedd for th
the purpose. He
furthe on reliance of order dated 31st October,
submits further Octo 2023 that
said Court
urt ma
made it clear, all contentions as are le
left open to be
decided by this side order dated 19th
thi Court. He relies on the set aside
December,
er, 20
2018 of coordinate Bench. Two of the
t concluding
paragraphs are reproduced below.
O.J.C. no.6567 of 1994
Page 10 of 19
“Wee ha
have considered the submissions and
nd tthe point of
contradic
adiction or difference or the point of view which has
been take
taken by the petitioner-assessee and the
he Department.
D
Whilee considering
co the matter, one thingg w
we have to
consider
der is that whether the machineries whic
which are used
are mand
andatory or optional for manufacturing
ring process so
that the same can be taken into considera
ideration while
granting
ting the sales tax benefit. It is to be seen
een whether
w the
same is eessential to be done for the purpose
se of
o speedy or
more pro
production of the electricity or the same
ame could have
been avo
avoided in production or in the manufacturing
ma
process.
ss.
In that
hat vview of the matter, while considering
ring the matter
the autho
uthority who is deciding the matter has to consider
the same for the purpose of taxing stat
statute. While
consideri
dering the production of electricity, to ach
achieve higher
productio
uction, an expert of electricity might think
hink that this is
mandator
atory or it is necessary for higher production.
prod But
while interpreting
inte the provisions of the usee an
and expenses,
whichh are shown for taxation purpose, mandato
datory or not is
to be judg
judged by the expert and in our consider
idered opinion,
while dealing
dea with the same, the Revenue authority
aut after
the rema
remand has considered the samee ttaking into
considera
deration the intention of the Legislature
ature and after
takingg into
in consideration all factors necessa
cessary for the
purpose
ose oof imposing penalty has to come to the reasonable
conclusio
lusion.
O.J.C. no.6567 of 1994
Page 11 of 19
He submits,
its, pe
petitioner has successfully caused reduction
reduc in the rate
of penalty
lty on goods not necessary for use in the generation or
distribution of electricity or any other form of power
power, for which the
registration
ion ce
certificate was issued, on mis-declara
declaration made by
Form-C. There be no interference. The writ petition
tition be dismissed.
8. Mr.
r. Mohanty
Moh in reply submits, in J.K.Cotton
otton Spinning and
Mills (supra) the Supreme Court said
Weavingg Mill id that a bare survey
of the diverse
verse uses,
u to which the goods may be intended
intend to be put in
the manufactu
ufacture or processing of goods, clearly
early sshows that the
restricted inter
erpretation placed by the High Court
ourt is not warranted.
Relied upon
pon passage
pa from paragraph 8 is reproduced
duced below.
“8…
“8………… A bare survey of the diverse
se us
uses to which
the goods
oods may be intended to be put in the manufacture
man or
processin
ssing of goods, clearly shows thatt the restricted
interpreta
pretation placed by the High Cou
Court is not
warranted
anted………….”
He also draws attention to paragraph 10, wherein the
th Court said as
in the relied
lied up
upon passage, reproduced below.
“10. …………..The
…… expression “in the manufac
ufacture” takes
in within
ithin its compass, all processes which
ch are
a directly
related
ed tto the actual production. Goodss in
intended asO.J.C. no.6567 of 1994
Page 12 of 19
equipmen
ment for use in the manufacture of goods
ods for sale are
expressly
ssly made admissible for specification……
………….”
9. Wee have
hav recorded submissions on, inter
ter alia,
ali the facts as
would appear
ppear from above. We will first draw
aw in
instruction from
J. K.Cotton
tton Spinning
S and Weaving Mills (supra).
upra). It was a case
where there
here was
w deletion made to the registrati
gistration certificate.
Applicant,
t, a public
p limited company engaged in m
manufacture and
sale of cotton
otton textiles, tiles and other commodities
dities had moved the
High Court
urt against
ag the deletion. Subject matter
tter of the challenge
was the deletions
deletio in respect of manufacture of tiles
tiles. Revenue has
relied upon
on pa
paragraph 11 in the judgment. Wee have laid emphasis
on a sentence
tence in
i the paragraph, which is again reprod
reproduced below.
“… … … Building materials used as raw
w m
materials for
construc
struction of “plant” cannot be said to be us
used as plant
in the manufacture of goods. … … …”
he m
(emp
(emphasis supplied)
This finding
ing m
must be seen in context of facts inn that ccase because in
the paragraph
graph itself the Supreme Court said, whether
whethe a building is
‘plant’ within
ithin the meaning of rule 13 is a difficu
ifficult question, on
which noo opin
opinion need be expressed. The facts
ts were
were, the deletions
made were in respect of items said as not necessary
essary for use in the
manufacture
ture oof tiles. It follows, we must acce
accept reliance of
O.J.C. no.6567 of 1994
Page 13 of 19
petitionerr on th
the declarations of law made in paragra
aragraphs 8 and 10 in
the judgment
ment, as have been reproduced above, for our instruction.
10. In Ipitata
Ipita Sponge Iron Ltd. (supra) the registration
certificate
te issu
issued to appellant therein did not include
includ ‘refractory’.
Revenue had moved against appellant therein.. I that context
In
coordinate
te Bench
Ben had considered mitigation follow
following finding on
conduct of rev
revenue as had not been free from
m blam
blame. The view
does not come to aid of revenue.
11. Challeng
hallenge in the writ petition involves provisi
provisions in sections
8 and 10 of Central
C Sales Tax Act, 1956. Clause
lause (b) under sub-
section (3)
3) of section
s 8 is reproduced below.
“8. Rates
Rat of tax on sales in the coursee of inter-State
trade or commerce.-…
c ......
...........(3)The goods referred to in sub-
section(1)
on(1)-
(b) are goods of the class or classes specif
pecified in the
certificate
ficate of registration of the register
istered dealer
hasing the goods as being intended forr re
purchasin re-sale by him
or subjec
bject to any rule made by the Central Government
Gov in
this beha
behalf, for use by him in the manu
anufacture or
processin
ssing of goods for sale or in the telecomm
ommunicationsO.J.C. no.6567 of 1994
Page 14 of 19
network
ork oor in mining or in the generation or ddistribution
ectricity or any other form of power; ”
of electric
(emphas
phasis supplied)
Also reproduce
roduced below are clauses (b) and (d) under section 10.
“10. Penalties
Pen –
... .... ... (b) being a registered dealer,
deal falsely
represents
sents when purchasing any class of goods
oods that goods
of such
ch cl
class are covered by his certificate of registration;
re
or
… … … (d) after purchasing any goods for
fo any of the
purposes
ses sspecified in clause (b) or clause (c)
c) or clause (d)
of sub-sec
section (3) or sub-section (6) of Secti
Section 8 fails,
without
ut re
reasonable excuse, to make use off the goods for
uch ppurpose; or”
any such
(empha
emphasis supplied)
12. Wee see from reasoning of the revisionall autho
authority in respect
of cement, it is view taken that item ‘cement’ does
oes no
not answer to the
requirement of the provisions under section 8(3)(b)
(3)(b) read with rule
13 of thee Cen
Central Sales Tax (Registration andd Turn Over) Rules,
1957. Rule
ule 13 is reproduced below.
“Thee goods
go referred to in clause (b) of sub-se
section (3) of
section 8, w
which a registered dealer may purcha
rchase, shall be
goods intended
inten for use by him as raw materials,
ials, processingO.J.C. no.6567 of 1994
Page 15 of 19
materials,
als, machinery, plant, equipment, tools,
ls, st
stores, spare
parts, acce
accessories, fuel or lubricants, in the man
manufacture or
processing
sing of goods for sale, or 4 [in the
telecommu
mmunications network or] in mining,
ng, or in the
generation
tion or distribution of electricity or anyy ot
other form of
power.”
Cement, petitioner
petitio says, was used for purpose of constructing
co the
plant, in which there has been generation of electri
electricity. Inter alia,
‘plant’ was
as separated
se from ‘machinery’ as an item in the rule by
o.1059 dated 29th October, 1958. ‘Plan
GSR no.1059 Plant’ became an
independent
ent ite
item. It is to be seen whether,
er, for
fo purpose of
generation
on of electricity there is necessity off a pl
plant and if so,
construction
tion oof it by use of, inter alia, cement.
cemen Petitioner’s
contention
on is
is, the plant was constructed after
fter th
the registration
certificate
te was obtained, on goods purchasedd by declaration on
Form-C. There does not appear to be any dispute that
tha petitioner did
constructt a pl
plant, from where it commenced its generation of
electricity.
ty. Th
That being the position, we find the vview taken, of
cement not
ot ans
answering to the requirement of thee provisions
prov as being
neither a raw m
material nor processing material nor machinery,
ma plant,
equipment,
nt, too
tools, stores, spare parts, accessories,
es, fu
fuel or lubricants
O.J.C. no.6567 of 1994
Page 16 of 19
essential for ppurpose of generation or distribution
bution of electricity,
unacceptable.
table. There is also no indication from mate
materials on record
that afterr cons
construction of the plant, cement had been purchased by
declaration
on in Form-C. Cement was an item subsequ
ubsequently added in
the registration
stration certificate. It is absurd to expect cement will be
directly used for
fo purpose of generation or distribution
ibution of electricity.
13. Moving
oving on to reasoning by the revisionall auth
authority in respect
of steel, we find the authority implied itss disa
disagreement with
issuance of the registration certification including
luding item steel in
saying, itt was issued rightly or wrongly from Bhuban
hubaneswar-I and II
circles too go oon to say, fact remains steel is not an item essential
based onn reas
reasoning earlier given for cement.
t. We are unable to
accept thee view for the same reasons we have given
iven on
o cement.
14. Regardin
egarding charge no.3 on, inter alia, items
tems oof road rollers,
cranes and
nd pav
pavement breakers, we have not been
een ab
able to find from
materialss on record,
re fact that those items were used for any purpose
other than
an for
fo generation or distribution of eelectricity. The
revisional
al auth
authority here too relied on rule 13.. Petiti
Petitioner has given
an explanation
nation on facts, for use of those items in compacting
co coal,
for liftingg heavy
hea items required for purposee of ggeneration and
distribution
ion of electricity. The pavement breaker
aker petitioner says,
O.J.C. no.6567 of 1994
Page 17 of 19
was used as ha
handling equipment. Where there is a finding
fin of guilt to
impose penalty
penalty, the authority is obliged to show
how th
that if the items
purchased on declaration
d by ‘C-Form’, are present
esent iin the premises
where petition
etitioner is generating electricity for distribution,
distrib there is
also somee collateral
coll purpose of business for which
hich the items were
or are being
eing uused. There is clear absence of find
finding on fact but
interpretation
ation of the provision and view taken
en for imposition of
penalty. Here we reproduce paragraph 12 from J. K.Cotton
Spinningg and Weaving Mills (supra).
“12. The
Th expression “electricals” is somew
mewhat vague.
But in a factory
f manufacturing cotton and oth
other textiles,
certain el
electrical equipment in the present
sent stage of
developme
pment would be commercially neces
ecessary. For
instance,
ce, without
w electric lighting it would be very difficult
to carry
ry on the business. Again electrical
al hhumidifiers,
exhaust
st fan
fans and similar electrical equipment
nt would
w in the
modernn conditions
co of technological developmen
pment normally
be regarde
arded as equipment necessary to effectual
ctually carry on
the manufa
nufacturing process. We are not prepare
epared to agree
with the High Court that in order that
hat “electrical
equipment
ent” should fall within the terms of R
Rule 13, it
must bee an ingredient of the finished goods to be
b prepared,
or “it must
mus be a commodity which is used in tthe creation
of goods”
ods”. If, having regard to normal
al conditions
O.J.C. no.6567 of 1994
Page 18 of 19
prevalent
ent iin the industry, production of the fini
finished goods
would be ddifficult without the use of electrical
ical equipment,
the equipm
uipment would be regarded as intended
ded for use in
the manuf
anufacture of goods for sale and such
h a test, in our
judgment, lectricals”. This
ent, is satisfied by the expression “electri
would of course not include electrical equ
equipment not
directlyy co
connected with the process of manufac
ufacture. Office
equipment
ent such as fans, coolers, air-conditi
ditioning units,
would not be admissible to special rates under
er s. 8(1).
(emp
(emphasis supplied)
15. Wee are convinced that impugned revision order dated 16th
ion or
June, 1994
94 can
cannot be sustained. It is set aside and
nd quashed.
qua
16. Thee writ petition is allowed and disposed of.
( Arindam
indam Sinha )
Actingg Ch
Chief Justice
( M.S.
.S. Sahoo
S )
Jud
Judge
Jyostna/Dutta
rasant
Signature Not Verified
Digitally Signed
Signed by: JYOSTNARANI MAJHEE
Reason: Authentication
Location: ORISSA HIGH COURT
Date: 11-Mar-2025 19:10:10
O.J.C. no.6567 of 1994
Page 19 of 19