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2016 (8) TMI 1343 - HC - VAT and Sales TaxValidity of Demand Notice dated October 10, 2011 - Declaration that the oxygen gas used by Tata Steel Ltd., which is being supplied by this petitioner for the purposes of manufacturing of steel through basic oxygen steel method (a method of steel making) is a raw material, required directly for use in manufacturing or processing of steel - whether oxygen sold by this petitioner to respondent No. 11 Tata Steel Ltd. is used as a material in manufacturing process of steel or is used as a raw material in manufacturing process of steel? Held that: - the word "raw material" is to be understood in a common parlance of those who deal with the matter. If we ask any common man who has nothing to do with any manufacturing process of steel then he may give any other answer, but, this is not a test at all. Common parlance is to be used of the persons, who are dealing with manufacturing of steel and if those persons are narrating oxygen as a raw material, it will be one of the factors for arriving at the conclusion. What is to be seen by this court, is inevitable use of the material in chemical reaction, non-replacability of the said material in chemical reaction, whether this material is participating in a chemical reaction or not, whether oxygen is converted into any other material or not in a chemical reaction (here oxygen is converted into carbon dioxide and carbon monoxide) in L. D. Vessel Operation-second reaction in the manufacturing process of steel. What is to be seen is huge quantity of material added for chemical reaction. These are the guiding factors. If all these tests are applied to the usage of oxygen in second chemical reaction in manufacturing process of steel through BOS method, i.e., in L. D. Vessel Operation, certainly, oxygen is a basic raw material without which steel cannot be manufactured through BOS method. The orders passed by the Deputy Commissioner of Commercial Taxes, Jamshedpur Circle, Jamshedpur, dated October 1, 2011 (annexure 16 to the memo of this petition) relating to financial year 2003-04 is set aside. The oxygen gas sold by this petitioner and purchased by respondent No. 11 is used as a basic raw material in manufacturing process of steel through Basic Oxygen Steel Method. Petition allowed.
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