TMI Blog2001 (8) TMI 1338X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain concessions to the newly set up industrial units in the State and granted concessions and exemptions to such units with a view to encouraging further industrialisation of various areas in the undivided State of Bihar and to attract new entrepreneurship by way of setting up new units and diversification of the existing units. Since Industrial Policy Resolution, 1995, was only by way of an "intention statement" of the State of Bihar and was more of a policy frame work, S.O. No. 479 dated 22nd December, 1995, was issued in terms of section 7(3) of the Bihar Finance Act, 1981, granting exemption from payment of sales tax on purchase of raw materials utilised for sale of the finished products on certain terms and conditions contained in the notification itself. S.O. No. 58 dated March 2, 2000, was issued by the Government of Bihar, again in exercise of the power conferred upon it under section 7(3)(b) of the Bihar Finance Act, 1981 whereby certain amendments in S.O. No. 479 dated December 22, 1995 were brought about. The preamble of S.O. No. 58 reads thus: "In exercise of the powers conferred under sub-section (3)(b) of section 7 of the Bihar Finance Act, 1981 (Bihar Act No. 5 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It, accordingly, applied, by invoking the aforesaid S.O. No. 479 dated December 22, 1995 read with aforesaid S.O. No. 58 dated March 2, 2000, to the Joint Commissioner, Commercial Taxes, for grant of exemption from payment of sales tax on purchase of raw material for producing CRM. Actually, it appears that the application was made to the Deputy Commissioner, Commercial Taxes, Jamshedpur, who sought approval of the Joint Commissioner for grant of such exemption for payment of sales tax on purchase of raw material. The Joint Commissioner passed an order on December 16, 2000 granting such approval. The operating part of this order reads thus: "In view of the facts and legal position discussed in the foregoing paragraphs, I am of the opinion that the case of the applicantcompany is covered by the amended provisions of the Industrial Policy, 1995 and S.O. No. 478/479 dated December 22, 1995. However, there is no justification for exemption of tax-free purchase of raw materials in the form of HR sheet/coil and FHCR as these are to be met by its captive production. The exemption of tax-free purchase of raw materials can be allowed as per the approved project which is obviously based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugust 26, 1997 (para 1 of the notification)? 4.. Whether the Commercial Taxes Department is bound to grant any such exemption to the dealer concerned particularly when the life of the Industrial Policy, 1995 of the State of Bihar under which exemption are sought and granted, has already lapsed on August 31, 2000 much before the creation of the Jharkhand State on November 15, 2000?" 6.. Ultimately on 3rd April, 2001, the impugned order was passed by respondent No. 2 whereby he, as noticed at the outset, set aside the order of the Joint Commissioner and directed the cancellation of the exemption certificate. The concluding part of the aforesaid impugned order reads thus: "To conclude, hot rolled steel products and cold rolled steel products which are classified under same sub-item (vi) of item (iv) of section 14 of C.S.T. Act, 1956 and which are treated to be the same commodity for the purpose of levy of tax, cannot be treated to be different commodity for the purpose of exemption of tax, as the levy of tax and exemption of tax are governed by the same statute. Therefore, the CRM unit of the dealer TISCO, cannot qualify for diversification as the nature of the cold rolled s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo notifications in the State of Jharkhand, these notifications are applicable to the case of the petitioner as well, subject to the petitioner falling within the purview of the aforesaid clause 4(c) of Notification S.O. No. 58. In other words, these notifications are enforceable and operative as on date in the State of Jharkhand, these having been validly extended to Jharkhand State and we also proceed on the premise that the benefit of these notifications is applicable to the petitioner as well, subject, of course, to the paramount and overriding condition that CRM is a product commercially different from HRM. 8.. Respondent No. 2 has taken a view that CRM is not a different product from HRM. While taking this view he has found support primarily in section 14 of the Central Sales Tax Act, 1956. Section 14 of the C.S.T. Act, 1956, in so far as it is relevant for our purposes, reads thus: "14. Certain goods to be of special importance in inter-State trade or commerce.--It is hereby declared that the following goods are of special importance in inter-State trade or commerce: ................................. ................................. (iv) iron and steel, that is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. v. Deputy Commissioner of Commercial Taxes [1995] 99 STC 216, on the analogy of section 14 of the C.S.T. Act and by saying that because the two items, namely, CRM and HRM have been clubbed together for the purposes of taxation as envisaged under section 15 of the C.S.T. Act, 1956, these cannot be considered as different items. There appears to be a clear fallacy in the approach of the Commissioner by doing so. On the basis of the taxability aspect of the two items with reference to fiscal and taxing statutes his holding that the two items are same or similar, he has misdirected himself by not properly appreciating the actual contour of the controversy involved in the present case. 9.. The only question which arises for consideration in this petition is whether, totally unconnected with any taxing statute or for that matter any other law, uninfluenced by any factor or any analogy drawn from any such statute, the two products are same commercially or different commercially. The only point of relevance in the entire adjudicatory process at the hands of the Commissioner was to find out whether these two items were commercially different or not. In the exercise of such adjudicato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation and has the petitioner, in fact, and in effect and substance, been able to put forth such material as would form the basis of such satisfaction? The related question may also be as to who is the person who, in our view, should be considered most appropriate for being thus satisfied on this issue? Our answer to both these questions is that, firstly the petitioner has not produced enough material whereby anyone can be said to have been satisfied fully that CRM is a product commercially different than HRM. Unless the petitioner does proceed in that direction and satisfies on that score, nothing can be done. Secondly, we are of the view that respondent No. 2, Commissioner, Commercial Taxes, is the best suited and most appropriate authority whom the petitioner should satisfy on this score. The related question which emerges is what should be the parameters of such a satisfaction? What should be the ingredients of the decision-taking process which would help the respondent No. 2 in arriving at a definite conclusion, whether one product is different from the other? We may attempt, by way of illustration, to suggest that the relevant factors and material considerations which may ..... X X X X Extracts X X X X X X X X Extracts X X X X
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