TMI Blog2018 (5) TMI 1865X X X X Extracts X X X X X X X X Extracts X X X X ..... directed to conduct the factual inquiry in this regard after giving liberty to the parties to produce evidence in respect of their respective contentions and, thereafter, he would be at liberty to proceed in the matter for adding percentage of the chemicals, dyes and colours in the value of the turnover, which are retained or embedded on the textile or fabrics as the case may be in accordance with law - petition disposed off. - CWP No. 20637 of 2013 (O&M) - - - Dated:- 17-5-2018 - Mr. Justice Ajay Kumar Mittal, Acting Chief Justice And Mr. Justice Tejinder Singh Dhindsa For the Appellant : Mr. Rajiv Agnihotri, Advocate Ms. Mamta Singla Talwar , Deputy Advocate General, For the Respondent : Haryana and Tejinder K. Joshi , Senior Standing Counsel for Central Excise ORDER AJAY KUMAR MITTAL,(ACJ) 1. This order shall dispose of a bunch of 40 petitions bearing CWP Nos. 20637, 20671, 20685 of 2013, 19319, 19353 of 2014, 16455 to 16463, 24794 to 24799 of 2017, 1585, 1586, 1587, 1590, 1591, 1592, 1593, 1594, 1595, 1643, 3946, 3947, 3948, 3949, 3986, 4083, 4084, 4085, 4086 and 10504 of 2018 as learned counsel for the parties are agreed that the primary issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of their respective claims/contentions. Accordingly, therein, the matter has been remanded to the Assessing Officer to work out the details of quantity of chemicals, dyes and colours that would get washed out in the process of dyeing and printing of fabric undertaken by the assessee. The Assessing Officer has been directed to conduct the factual inquiry in this regard after giving liberty to the parties to produce evidence in respect of their respective contentions and, thereafter, he would be at liberty to proceed in the matter for adding percentage of the chemicals, dyes and colours in the value of the turnover, which are retained or embedded on the textile or fabrics as the case may be in accordance with law. The relevant paras from the judgment in M/s A.P. Processor s case (supra) read thus:- 21. In other words, the bleaching and dyeing is multi level process in which chemicals are used initially and are mandatorily washed out before the cloth becomes conducive for the process of dyeing. After undertaking dyeing, the fabric is sent to the principal. Initially the fabric indicates washing with the help of caustic soda, desizer, soda ash, hydrogen peroxide, HCL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemicals consumed during the process of dyeing and job work are not to be included for the purpose of levy of VAT as substantial portion of the same is not transferred to the principal eventually. 23. In all fairness, reference is made to judgments relied upon by the learned State counsel. The case of Matushree Textile Limited (supra) was concerned with the aspect as to whether process of dyeing of textile would amount to works contract or not and there was no dispute regarding the quantification of goods on which tax would be imposed. The High Court of Bombay while answering the questions posed before it held that property of the material such as chemical colours and dyes used in the process of dyeing and printing is passed on to the fabric of the customer and as such passing of property of material is a deemed sale tax is leviable on such materials under the works contract. The High Court had not expressed any opinion with regard to as to how much quantity of dyes and chemicals would be made subject matter of such tax. The issue which has not been decided by the courts below is to the quantum of chemicals, dyes and colours used in the process of job work of dyeing and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2003] 130 STC 1 relied upon Mr. Joshi, does not in any way support the case of the respondents. Accordingly, we are of the opinion that the Tribunal was not justified in holding that the Works Contracts Act is not applicable in the present case, because the coloured shade passed on to the consumer represents only a small quantity of the materials used in the process of dyeing. 24. In Taktex Processing Complex vs. State of Kerala , 2004 (136) STC 435 (Kerala), the issue was whether the Tribunal was justified in holding that the chemicals and dyes used up in the execution of job works was taxable at the hands of the petitioner. It was held that the item dye used in the process of bleaching textile fabrics, could not be treated as a consumable mentioned in Section 5C(1)(c) (iii) of the Act. Thus, the order passed by the Tribunal was upheld. 25. In East India Cotton Manufacturing vs. State of Haryana, (1993) 104 PLR 269, it was held by this Court that the activity of processing of grey cloth into finished cloth by East India Cotton Manufacturing company limited amounted to inter state sale. In M/s Mahim Patram Private Limited vs. Union of India and others, Civil Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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