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198 Goods & Services Tax Cases - Reports [Vol. 1 CASE REVIEW Khanna Coke Industries Ltd. v. Assistant Commissioner, Sales Tax 1978 UPTC 473 (para 22), Ashoka Industries v. Commissioner of Sales Tax 1989 UPTC 562 (para 22) distinguished. CASES REFERRED TO B.P. Oil Mills Ltd. v. Sales Tax Tribunal AIR 1998 SC 3055 (para 9), Chowgule & Co. (P.) Ltd. v. Union of India AIR 1981 SC 1014 (para 10), Devi Das Gopal Krishnan v. State of Punjab AIR 1967 SC 1895 (para 13), Ashirwad Ispat Udyog v. State of Level Committee AIR 1999 SC 111 (para 14), Dy. Commissioner of Sales Tax (Law), Board of Revenue (Taxes) v. Coco Fibres AIR 1991 SC 378 (para 15), Saraswati Sugar Mills v. Haryana State Board AIR 1992 SC 224 (para 16), Union of India v. Delhi Cloth & General Mills AIR 1963 SC 791 (para 17), Rajasthan State Electricity Board v. Associated Stone Industries AIR 2000 SC 2382 (para 18), State of Maharashtra v. Mahalaxmi Stores [2003] 1 SCC 70 (para 19), Sonebhadra Fuels v. Commissioner of Trade Tax 2007 UPTC 628 (para 20), Khanna Coke Industries Ltd. v. Assistant Commissioner, Sales Tax 1978 UPTC 473 (para 22) and Ashoka Industries v. Commissioner of Sales Tax 1989 UPTC 562 (para 22). B.K. Pandey for the Applicant. Piyush Agrawal for the Respondent. JUDGMENT 1. The revenue has filed the present revision under section 11 of the U.P. Trade Tax Act (hereinafter referred to as “the Act”) against the order of the Tribunal dated 25-5-1998 for the assessment year 1989-90. 2. The applicant was engaged in the business of manufacture and sale of Hard Coke. It is claimed that the manufactured Hard Coke was not liable to tax because it was manufactured out of the tax paid coal and both coal and Hard Coke are the same commodities. The claim of the applicant has been denied on the ground that both coal and Hard Coke are two different commodities and the applicant being manufacturer of Hard Coke is liable to tax. 3. Being aggrieved by the assessment order, the dealer/opposite party filed the appeal before the Deputy Commissioner (Appeals), Trade Tax, Varanasi which has been rejected vide order dated 15-11-1995. The dealer filed second appeal before the Tribunal. The Tribunal by the impugned order allowed the appeal and declared the turnover of Hard Coke as nontaxable. The Tribunal held that the coal and Hard Coke are not a different commodity but are the same commodity and since it is made out of the tax paid coal the Hard Coke is not further liable to tax. 4. Heard Sri B.K. Pandey, learned Standing Counsel for the applicant and Sri Piyush Agrawal, learned counsel appearing on behalf of the opposite party. 5. Sri B.K. Pandey, learned Standing Counsel submitted that the assessing authority found that the Hard Coke was manufactured after the processing of coal breeze. He submitted that as against 12058 tons of coal, 8938 ton Hard Coke was manufactured. The difference has been shown as GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 74 A B C D E F G
2010] Commissioner, Trade Tax v. Ramco Coke Industries (All.) 199 A B C D E F G burning loss. He submitted that the Tribunal in its order has also observed that in the manufacturing of Hard Coke from coal a manufacturing process is involved in which its nature changes but there is no difference in fundamental nature, therefore, it has been admitted by the Tribunal also that in the manufacturing of Hard Coke from coal a manufacturing process is involved and the nature of the commodity changes. Therefore, treating both the items as one and the same is wholly unjustified. He submitted that coal and Hard Coke are two different commodities by its composition, nature and use. Though it is true that both coal and Hard Coke are used as a fuel but two commodities being different to each other and Hard Coke is manufactured and obtained as a manufactured product from the coal by a burning process. 6. Having heard learned counsel for the parties, I have perused the order of the Tribunal and authorities below. 7. It appears that the coal breezes are being burnt at a specific temperature to remove the impurities from the coal and as a result of such burning process Hard Coke is obtained. Hard Coke is a highly combustible item. Though breezes and Hard Coke both are used as fuel but Hard Coke is used for specific purposes being highly combustible. 8. The manufacture is defined under section 2(e-1) of the Act reads as follows : “‘Manufacture’ means producing, making, mining, collecting, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods but does not include such manufacture or manufacturing process as may be prescribed.” 9. The above definition is very wide as held by this Court in B.P. Oil Mills Ltd. v. Sales Tax Tribunal AIR 1998 SC 3055. The definition of ‘manufacture’ in section 2(e-1) of the Act includes “processing, treating or adapting any goods”. Thus, the meaning of “manufacture” in the U.P. Trade Tax Act is wider. A dealer will be liable to pay tax on sale of any goods he makes by processing, treating or adapting the goods he purchased. In B.P. Oil Mills Ltd.’s case (supra), the Supreme Court held that refining crude oil amounts to a “manufacture”. 10. In the case of Chowgule & Co. (P.) Ltd. v. Union of India AIR 1981 SC 1014 the Apex Court observed that where any commodity is subjected to a process or treatment with a view to its development or preparation for the market it would amount to processing. The nature and extent of processing may vary from case to case, in one case the processing may be slight and in another it may be extensive; but in each process suffered the commodity would experience a change. The Court further observed that whatever be the means employed for carrying out of processing operation. It is the effect of the operation on the commodity that is material for the purpose of determining whether the operation constitutes processing. GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 75
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