TMI Blog1994 (12) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... )(ii) of the Bihar Finance Act, 1981. Subsequently, it filed a petition for amendment of the said certificate by adding cranes, tippers and trucks in the certificate. The sales tax authorities refused the prayer for inclusion of those items in the certificate. It was refused on the footing that these items were not 'directly' for use in the execution of the works agreement. Hence the present application before us under articles 226 and 227 of the Constitution of India. One of the decisions relied upon by the petitioner in support of its case is Tata Iron and Steel Company Ltd. v. State of Bihar [1970] 26 STC 30 (Pat.). That case related to insertion of certain items in the registration certificate. The items were lamps, spare parts of plant and machinery, spare parts for Eimco loader, spare parts for Commine engines, spare parts for crane, spare parts for chipping hammers, screen vibrating and wire screen cloth, oil seal, wagon components and packing cotton yarn and flax. The prayer for insertion of these items in the registration certificate had been rejected by the sales tax authorities in that case. A Bench of this Court relying upon a decision of the Supreme Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y who gave the contract work.' We would have preferred the decision of our own High Court, but then we are faced with another decision of the Supreme Court in Indra Singh Sons (P.) Ltd. v. Sales Tax Officer, Raigarh Circle, Raigarh [1966] 17 STC 510. This decision is not in relation to a works contract, but the ratio of this case seems to cast cloud upon the decision of this Court in the case of Tata Iron and Steel Company Ltd. [1970] 26 STC 30. In our view, therefore, the matters need to be settled firmly by a larger Bench. Let this matter be placed before honourable the Chief Justice for constituting a larger Bench for considering the correctness of the decision of this Court in Tata Iron and Steel Company Ltd. [1970] 26 STC 30. Let the office prepare three copies of brief, in case honourable the Chief Justice considers it appropriate to send the case to a larger Bench, for use of the three honourable Judges. Sd/-Uday Sinha I agree to the reference aforesaid. In my opinion the substance of the question is: whether the use of mechanised labour for execution of works contract is entitled to the benefit of section 13(1)(b)(ii). Sd/-S.B. Sanyal." "9. August 28, 1987: One ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioner, the Deputy Commissioner of Commercial Taxes did not doubt the requirement of those goods by the petitioner for their use in the execution of works contract. 4.. Aggrieved by the order of the Deputy Commissioner of Commercial Taxes dated October 17, 1985, the petitioner preferred a revision to the Commissioner of Commercial Taxes under section 46 of the Bihar Finance Act. The Commissioner obtained a report from the Joint Commissioner (Law) and directed the petitioner to file their written submissions which the petitioner did. 5.. The Commissioner by the order impugned in this writ petition dated November 10, 1986, held as follows: "In the instant case merely, the use of the expression directly for use in the execution of works contract could not entitle a dealer to concessional rate on purchase of goods which are not for sale in the course of execution of a works contract, as has been intended by the Legislature, but which are actually required for carrying on the business of works contract expediently and profitably. (Para 13) In view of the discussions made in the preceding paragraphs, I find that though the grounds on which the Deputy Commissioner of Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titled for concessional rate of tax. Therefore, according to the learned Advocate-General the goods in question, namely, cranes, tippers and trucks admittedly are not to be used exclusively for the works contract in question but also to be used for any other works contract in any other part of the country and so those goods cannot be brought within the purview of section 13(1)(b)(ii) of the Act. In support of this contention he placed reliance on a decision of the Orissa High Court in the case of Kalinga Construction Co. Ltd. v. Collector of Sales Tax, Orissa, Cuttack [1962] 13 STC 225. He also submitted that in the event of this Court agreeing with the contention of the learned counsel for the petitioner, the benefit of entry in the registration certificate cannot be from the date of application for such entry but only from the date of the judgment. We may point out here that on the factual aspect that the goods in question are required by the petitioner for carrying on the business of works contract expediently is not denied by the learned Advocate-General. 7.. Learned Advocate-General also pointed out that except [1970] 26 STC 30 (Tata Iron and Steel Company Ltd. v. State of B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parts for Commine engines, spare parts for cranes, spare parts for chipping hammers, screen vibrating and wire screen cloth, oil seal, wagon components and packing cotton yarn and flax could be included in the certificate of registration of the assessee for the purpose of special concessional rate of sales tax as provided under section 6A(b) of the Bihar Sales Tax Act, 1959. In that case the assessee-company was carrying on business of manufacturing and processing iron and steel and their by-products for sale. The learned Judges after taking into consideration the principle laid down by the Supreme Court in [1965] 16 STC 259 (Indian Copper Corporation Ltd. v. Commissioner of Commercial Taxes, Bihar) as also in [1965] 16 STC 563 (J.K. Cotton Spinning Weaving Mills Co. Ltd. v. Sales Tax Officer, Kanpur) held as follows: "Keeping in view the wide interpretation given by the Supreme Court in the two cases referred to above, of the expression 'goods intended for use in the manufacture and processing of goods for sale' in the Central Act, I am of the opinion that items Nos. 7, 8, 9 and 10 ought to have been also included in the certificate of registration under section 6A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cannot allow him to raise this new point at this stage. In the alternative, the learned counsel for the appellant contends that the appellant requires these motor trucks for transporting coal to the railway siding at the nearest railway station. He says that the appellant has to deliver coal f.o.r. railway siding, and in order to fulfil its commitments it must transport coal to the railway siding. He says that one cannot carry on the activity of mining without sending coal to the railway station for being loaded on the trains. He urges that we should regard the railway siding as similar to a warehouse or place of storage. We are unable to accept the submissions of the learned counsel. We cannot read the expression 'in mining' in rule 13 of the Central Rules to mean in the business of mining. The goods must be intended for use only in the actual activity of mining which would include raising the coal and storing it in heaps or in warehouses. But in our opinion the expression cannot be extended to include delivering the coal to a siding at the railway station. Therefore, the High Court was right in holding that these two items, namely, spare parts of motor vehicles including tyre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was placed by the learned counsel for the petitioner relate to interpretation of section 8(3) of the Central Sales Tax Act and the rules framed thereunder. However, the ratio laid down in those two cases have been rightly applied by the Division Bench of this Court in [1970] 26 STC 30 (Tata Iron and Steel Company Ltd. v. State of Bihar). In [1965] 16 STC 563; AIR 1965 SC 1310 (J.K. Cotton Spinning Weaving Mills Co. Ltd. v. Sales Tax Officer, Kanpur), their Lordships of the Supreme Court while explaining the scope of rule 13 framed under section 8(3)(b) of the Central Sales Tax Act, held as follows: "In our judgment if a process or activity is so integrally related to the ultimate manufacture of goods so that without that process or activity manufacture may, even if theoretically possible, be commercially inexpedient, goods intended for use in the process or activity as specified in rule 13 will qualify for special treatment. This is not to say that every category of goods 'in connection with' manufacture of, or 'in relation to' manufacture, or which facilitates the conduct of the business of manufacture will be included within rule 13. Attention in this connection may be invit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods in question is a must for the execution of works contract. In other words it meant that the works contract cannot be executed without the use of the goods in question. 17.. We hold that similar was the legislative intent in section 8(3) of the Central Sales Tax Act. We further hold that the word "directly" in section 13(1)(b)(ii) of the Act has been used ex abundanti cautela (by way of abundant caution) in order "to counter any attempted evasion of the legislative intention" as has been expressed by Francis Bennion in his famous treatise on Statutory Interpretation (2nd Edition, Butterworths) at page 718. While dealing with such provision the learned author has observed that such provisions are "apparently unnecessary" and are included "ex abundanti cautela" and are "to be treated accordingly". 18.. We are in respectful agreement with the aforesaid principle of construction and hold that the insertion of word "directly" is of no major significance and has been used to quieten doubts if any. 19.. In the light of the facts discussed as above and applying the ratio laid down by the Supreme Court followed by this Court in [1970] 26 STC 30 (Tata Iron and Steel Company ..... X X X X Extracts X X X X X X X X Extracts X X X X
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