REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1538 OF 2009 [ARISING OUT OF S.L.P. (CIVIL) NO. 25483 OF 2007]

M/S BOC INDIA LTD.   … APPELLANT

Versus

STATE OF JHARKHAND & ORS.    … RESPONDENTS

WITH  

CIVIL APPEAL NO. 1540 OF 2009 [ARISING OUT OF S.L.P. (CIVIL) NO. 3045 OF 2008]

M/S TATA STEEL LTD.      … APPELLANT

Versus

STATE OF JHARKHAND & ORS.    … RESPONDENTS

J U D G M E N T

S.B. SINHA, J.

1. Leave granted.

2. These  two  appeals  arising  out  of  a  judgment  and  order  dated

2.11.2007  rendered  by  the  High  Court  of  Jharkhand  at  Ranchi  in  Writ

Petition (T) No. 4693 of 2005 were taken up for hearing together and are

being disposed of by this common judgment.  

3. The factual matrix involved is not in dispute.   

M/s  Tata  Iron  & Steel  Company  Limited  (TISCO) produces  steel.

For the said purpose, it purchases oxygen gas from M/s B.O.C. India Ltd.

(BOC),  the producer  and supplier,  for  industrial  and medical  use.   BOC

began supply of oxygen gas to TISCO from the year 1993.

Indisputably,  TISCO  applied  for  and  was  granted  a  registration

certificate  in  terms  of  the  provisions  of  Section  13(1)(b)  of  the  Bihar

Finance Act, 1981 (hereinafter called and referred to as, “the Act”). The said

certificate  originally  was  granted  on  16.3.1983.   Indisputably,  it  was

renewed from time to time; it covered the period in question, namely, 2001-

02, having been renewed till 31.5.2004.

Indisputably,  in  terms  of  the  provisions  of  the  Act  and  the  rules

framed thereunder, a dealer is required to show the list of goods which were

taxable  at  1% as also  the list  of  those goods which were taxable  at  3%.

Oxygen  was  shown  in  the  list  of  goods  taxable  at  3%  as  specified  in

Annexure ‘B’ appended to the registration certificate.   

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4. We may at this stage notice the relevant statutory provisions, namely,

Sections 13(1)(b), 14 (2) and 54 of the Act, which read as under:

“13. Special  rate  of  tax  on  certain  sales  or purchases.- (1)  Notwithstanding  anything contained  in  this  part  but  subject  to  such conditions and restrictions as may be prescribed.

(a) …

(b) Sales  to  or  purchases  by  a  registered  dealer  of  goods required by him directly for use in the manufacture or processing of any goods for sale.

14. Registration of dealers. (1) …

(2) Every dealer required by sub-section (1) to be in possession of a registration certificate shall apply for the same in the prescribed manner to the prescribed authority, and the said authority shall, on being satisfied that the application is in order, register the applicant and grant him a registration certificate within prescribed time in the prescribed manner  and  in  the  prescribed  form  specifying therein the goods or class or description of goods which the dealer sells or purchase and such other particulars as may be prescribed.

Provided that  no application  referred to  in this sub-section shall be considered and be deemed valid,  unless  the applicant  furnishes  correctly all the  prescribed  particulars  and,  such  other particulars  as  may be required  by the  prescribed authority in this behalf;

Provided  further  that  where  a  dealer required by sub-section (1) to be in possession of a registration certificate applies for such a certificate

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within  the  prescribed  time-limit  and  in  the prescribed manner and the application is otherwise valid in accordance with the first  proviso of this sub-section,  he  shall  be  deemed  to  be  in possession of a valid registration certificate from the  date  he  so  applied  for  the  purposes  of exercising  all  the  rights  and  performing  all  the duties and bearing all the liabilities under this part and the rules made thereunder:

Provided also that where a dealer carries on any  business  of  sale  or  purchase  of  goods,  in violation of the express and specific provisions of any  law  of  the  State  or  the  Union,  then notwithstanding  anything  to  the  contrary contained in this part and without prejudice to his liability to pay tax, the prescribed authority shall refuse to grant him a registration certificate.

54. Furnishing  of  information  by  dealers.-  If  any  dealer  liable  to  pay  tax  under  this

part-

(a) disposes of his business or any part of his  business,  whether  by  sale  or otherwise, or  

(b) acquires any business  or part  of  any business,  whether  by  purchase  or otherwise, or  

(c) effects  any  other  change  in  the ownership  or  constitution  of  the business, or

(d) discontinues his business or shifts his place of business, or

(e) changes the name, style or nature of his business or effects any change in the  class  or  description  of  goods which he sells, or

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(f) starts a new business or joins another business either singly or jointly with other persons, or

(g) effects  any change  in  the  particulars furnished  in  an  application  made under  Section  14  or  declaration furnished under Section 15,

He shall, within seven days of the occurring of any of  the  events  aforesaid  inform  the  prescribed authority accordingly, and, if any such dealer dies without  doing  so,  his  executor,  administrator, successor-in-interest or legal representative, as the case  may  be,  shall  within  fifteen  days  of  the dealer’s  death,  inform  the  said  authority accordingly.”

5. The State in exercise of its rule making power made rules known as

Bihar Sales Tax Rules, 1983. Rules 3(9), 6(1)(b), 6(4) thereof read as under:

“3(9) (a) Every dealer to whom the provisions of  section  54  apply shall  inform, in  writing,  the appropriate  authority  prescribed  in  sub-rule  (3) about  the  complete  details  necessitating  action under Section 54.

(b) Where the information furnished by a dealer under section 54 or otherwise received by the  authority  prescribed  under  sub-rule  (3) necessitates  amendment  of  the  registration certificate  of  the  dealer  the  said  authority  shall, where the dealer has not submitted the certificate for  amendment,  direct  him  to  produce  the certificate and he shall comply with such direction. On  receipt  of  the  certificate  the  said  authority shall, after such verification as may be necessary, amend the certificate suitably.

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(c) Where the information furnished by a dealer under Section 54 or otherwise received by the  authority  prescribed  in  sub-rule  (3) necessitates amendment in a declaration furnished under  Section  15  the  dealer  shall  furnish  to  the said  authority  a  revised  declaration  until  such revised  declaration  is  furnished  to  the  said authority the original declaration shall continue to be deemed valid and binding.  

6. Certificate  under  section  13.-  (1)  An application for certificate under sub-section (1) of Section 13 shall be made--

(a) ….. (b) In Form III,  where  the  certificate  is

required for making purchases covered by clause (b) or (c) of the said sub-section, such application shall be made separately in respect of every place of business;

(2) ……….. (3) ………..

(4) (a)  On receipt of an application in Form II or III if the appropriate authority prescribed in clause (a) or (b) of sub-rule (3), as the case may be,  after  verification  of  the  particulars  furnished by the applicant or after making or causing to be made such enquiry as  it  may deem necessary, is satisfied  that  the  application  is  in  order,  it  shall grant a certificate in Form VIA or VIB, as the case may be.

(b) On receipt of an application in Form IV,  if  the  Joint  Commissioner  of  the  Division, after  verification  of  the  particulars  furnished  by the  applicant,  or  after  making  or  causing  to  be made such enquiry as he may deem necessary, is satisfied that  the application is in order he shall, subject to the provisions of clause (a) of sub-rule (6),  grant  to  the  applicant  a  certificate  in  Form

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VIC.   A copy of  the  certificate  so  granted  shall also  be  sent  forthwith  to  the  Commercial  Taxes Officer in-charge of the sub-circle, if the business is intended to be established within the local limits of a sub-circle, and to the Deputy Commissioner or Assistant  Commissioner or Commercial Taxes officer  in  charge  of  the  Circle  in  other  cases.”

6. In terms of the said rules, application for grant of certificate is to be

filed in Form III wherein inter alia particulars of the goods which the dealer

may be permitted to purchase at special rate of tax in terms of clause (b) or

(c) of sub-Section (1) of Section 13 of the Act are required to be shown.  A

registration certificate is granted in terms of Form VIB.  Clause (3) whereof

reads as under:

“(3) Particulars of the goods which the holder of the certificate is  permitted to purchase at  special rate of tax, under clause (b) or (c) of sub-section (1) of section 13. _______________________________________ Description of goods.  Particular purpose for  

which Required  ________________________________________

1 2 ________________________________________ ”

7. Indisputably, the State from time to time issued several notifications,

one of such notification being dated 15.12.1976 in terms whereof tax at the

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rate of three per  centum was prescribed in respect  of the goods required

directly for use in manufacture.  However, by reason of S.O. No. 604 dated

12.4.1982, the rate of sales tax on Industrial raw materials (inputs) payable

under  Section  13(1)(b)  of  the  Act  was  fixed  at  one  per  centum.   By  a

Notification being S.O. 1096 dated 9.9.1983, it was provided:

“S.O. 1096 the 9th September, 1983- In exercise  of  the  powers  conferred  by  sub-section (1) of Section 13 of the Bihar Finance Act, 1981 Part 1 (Bihar Act No. 5, 1981) and in supersession of  Finance  (Commercial  Taxes)  Department notification  No.  S.O.  604,  dated  the  12th April, 1982, the Governor of  Bihar is  pleased to direct that the rate of sales tax payable under clause (b) of sub-section (1) of Section 13 of the said Act on the raw materials required directly for use in the manufacture or processing of goods for sale in the State or in course if inter-state trade or commerce, excluding such raw materials which have already undergone  any  manufacturing  or  production process  and  which  are  required  for  further assembly therewith shall be at the rate of two per centum.”

8. Yet again, by reason of S.O. 154 dated 3.2.1986 sales tax on sale of

the raw materials required directly for use in the manufacture or processing

of  goods  for  sale  excluding  such  raw  materials  which  have  already

undergone any manufacturing or production process and which are required

for further assembly therewith shall be at the rate of two per centum.   

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9. Concededly, TISCO never applied for amendment or modification of

the Registration Certificate. Oxygen gas continued to be allowed to remain

in  Annexure  ‘B’  of  the  Registration  Certificate  wherefor  sales  tax  was

payable  at  the  rate  of  three  per  centum.   Indisputably  again,  till  the

Assessment Year 2002-2003 for supply of oxygen gas to TISCO, BOC also

used to charge sales tax at the rate of three per centum.  However, the said

purported mistake was sought to be rectified by BOC in terms of the said

Notification  dated  3.2.1986  charging  two  per  centum  sales  tax  on  the

supplies  of  oxygen gas made to  TISCO.  TISCO issued a declaration in

terms of Form IX of the Rules.  BOC also deposited tax at the rate of two

per cent on the sale of industrial gases to TISCO.  

10. The  Deputy  Commissioner  of  Commercial  Tax  issued  a  notice  to

BOC on or about 20.4.2005, stating:

“It is informed that you have deposited tax @ 2% on the sale of industrial gases to M/s TISCO Ltd.

Because the Hon’ble Supreme Court has dismissed the SLP© No. 15419/2004, filed on your behalf, vide order dated 30.3.2005.

Hence, you are directed to produce the evidence before the undersigned of deposit  of the balance admitted  tax  of  Rs.1,02,45,572/-  by  20.5.2005, otherwise  the  proceedings  for  imposition  of penalty will  be initiated against you u/s 16(9) of Bihar Finance Act, 1981 as adopted by Jharkhand”

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Another notice dated 29.6.2005 was also issued, stating:

“In spite  of  informing you by this  office’s  letter No.  188  dated  20.4.2005  the  balance  amount  of Rs.1,02,45,572/- being admitted tax has not been deposited by you till date.

Again,  you are  directed  to  produce  the evidence before the undersigned of deposit  of the balance admitted  tax  of  Rs.1,02,45,572/-  by  15.7.2005, otherwise  the  proceedings  for  imposition  of penalty will be initiated against you u/s 16 (9) of Bihar  Finance  Act,  1981  as  adopted  by Jharkhand.”

11. BOC in  its  letter  dated  dated  15.7.2005,  addressed  to  the  Deputy

Commissioner,  Commercial  Taxes,  Jamshedpur  Circule,  Jamshedpur,

stated:

“After  receiving  the  said  letter/notice  dated 29.06.05,  we had  taken  up the  matter  with  Tata Steel  i.e.  our  purchaser  who  is  the  registered dealer for purchasing of the said Industrial Gases including Oxygen.  It has been informed by Tata Steel that the Tata Steel is using those industrial gases including oxygen as their  raw material  for manufacturing  of  steel  products  and  is  covered under Notification  S.O. No.1096 dated 09.09.83, hence the concessional rate of sales tax @ 2% is applicable. This has already been informed earlier by  them  vide  their  letter  No. ACCTS/ST/990/115/05  dated  31.05.05  (copy enclosed)  explaining  the  matter  in  this  context. For  paying  the  concessional  rate  of  sales  tax against  supply/sale  of  Industrial  Gases  including Oxygen  to  Tata  Steel,  Tata  Steel  has  submitted Form IX for availing the concessional rate of sales

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tax  against  supply  of  such  industrial  gases including  oxygen,  a  copy  of  which  is  enclosed herewith.

In view of the above, we request you to withdraw your  letter  No.  2137  dated  29.06.05  demanding differential  rate  of  tax  @  1%  totaling  to Rs.1,02,45,572/- and drop the case accordingly.”

The demand was again raised on BOC by the Deputy Commissioner

of  Commercial  Taxes,  Jamshedpur  Circle,  Jamshedpur  by its  letter  dated

22.7.2005 opining that TISCO was liable to pay concessional purchase tax

at the rate of three per cent on Oxygen gas.  BOC was, therefore, directed to

produce  the  evidence  of  deposit  of  the  balance  differential  amount  of

Rs.1,02,45,572/- by 18.8.2005 failing which other modes of recovery would

be adopted.  

12. Questioning  the  validity  and/or  legality  of  the  said  notice,  a  Writ

Petition was filed before the High Court of Jharkhad at Ranchi, which by

reason of the impugned judgment has been dismissed, holding that BOC has

no locus standi to file writ petition as admittedly tax was payable by TISCO;

being authorized to purchase at the concessional rate of three per cent and

not at the rate of two per cent and, thus, the demand made by the respondent

was unassailable, the selling dealer being bound by the certificate granted to

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it under Section 13(1)(b) of the Act.  It was also held that whether oxygen

gas is a raw material or not cannot be decided/determined in writ application

filed by BOC as  TISCO alone  is  competent  to  explain  to  the prescribed

authority as to how, which had all along treated and mentioned as goods as

per Annexure ‘B’, could be treated as raw material.  In view of the order of

this Court in the case of Tata Iron & Steel Co. Ltd. vs. State of Jharkhand &

ors. [(2005)  4  SCC  272],  the  writ  petition  was  also  held  to  be  not

maintainable  as  TISCO  cannot  take  a  different  stand  to  the  effect  that

oxygen gas was used by it as a raw material.

It was furthermore held:

“As  per  the  registration  certificate  issued  under Section  13(1)(b)  of  the  Act,  Oxygen  Gas  was treated as goods as mentioned in Annexure – B. Endorsing  the  same,  the  purchasing  dealer  has been paying the tax at the concessional rate of 3% for a long number of years treating Oxygen Gas as goods.   The  selling  dealer  is  bound  by the  said certificate.  Accordingly,  he  has  been  collecting sales tax @ 3% from the beginning till 2000 and thereafter  he  started  collecting  sales  tax  @  2% treating  the  same  as  raw  material.   Neither  the purchasing  dealer,  nor  the  selling  dealer  can decide the nature of the goods on their own, unless the  certificate  is  modified  by  the  prescribed authority  to  that  effect,  treating  Oxygen  Gas  as raw material, on being approached by purchasing dealer.  The purchasing dealer has to pay sales tax @ 3% treating Oxygen Gas as goods mentioned in Annexure – B and the selling dealer has to merely

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collect and deposit the same as per the certificate with  the  Government.  Unless  it  is  established before  the  prescribed  authority,  which,  in  turn, will decide the nature of the goods, the purchasing dealer  cannot  claim payment  of  sales  tax  at  the concessional  rate  of  2% treating Oxygen Gas  as raw  material  under  the  garb  of  the  two notifications  dated  9.9.1983  and  3.2.1986. Therefore, demand notices are perfectly justified.”

13. Mr. S. Ganesh, learned Senior Counsel appearing on behalf of BOC

and  Mr.  Shyam  Divan,  learned  Senior  Counsel  appearing  on  behalf  of

TISCO would contend:

i. As oxygen gas is injected to the furnace through lance directly

as  would  appear  from diagram mentioned  in  Encyclopaedia

Britannica, there cannot be any doubt whatsoever that it is used

as a raw material for the purpose of manufacture of steel.  

ii. Basic  Oxygen  Steelmaking  (BOS)  being  a  method  of

steelmaking in which carbon-rich molten iron is made into steel

as  by  blowing  oxygen  through  molten  pig  iron,  the  carbon

content of the alloy is lowered and changes the material into

low-carbon  steel  as  would  appear  from  the  Wikipedia,  the

impugned judgment cannot be sustained.  

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iii. For the purpose of arriving at a finding as to whether a material

used for a finished product would be a raw material or not, it is

not necessary that the item should continue to remain a part of

the finished product as even in a case where it has been burnt

down in the chemical process required for manufacturing the

end product, the same would continue to be a raw material.

iv. Section 13(1)(b) of the Act read with the notification providing

only for the conditions that the assessee must sell raw material

to  a  registered  dealer;  and  it  must  be  used  for

processing/manufacturing  of  goods  meant  for  sale;   BOC,

being  the  assessee,  is  not  concerned  as  to  whether  in  the

registration certificate issued to TISCO, oxygen gas has been

shown in Annexure ‘A’ or Annexure ‘B’

v. BOC being an assessee having been made liable to pay tax had

the requisite locus standi to maintain the writ application.

vi. Special  Leave  Petition  filed  by  TISCO  questioning  the

applicability of industrial policy, the decision of this Court in

Tata Iron & Steel Co. Ltd. vs. State of Jharkhand & ors. [supra]

cannot have any application in the instant case as payment of

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tax  being  governed  by  notification,  the  principles  of  res

judicata and/or estoppel would not apply.  

14. Mr.  B.B.  Singh,  learned  counsel  appearing  on  behalf  of  the

respondents, on the other hand, would contend:

i. The procedure for claiming special rate of tax on all materials

and/or on raw materials  having been provided for in the Act

and/or Rules framed thereunder, the same were required to be

complied with by the assessee for claiming the benefit thereof.   

ii. TISCO which is a consumer of oxygen gas having never raised

any contention that the rate of tax in respect of oxygen would

be two per cent and not three per cent, BOC cannot be said to

have any locus standi to plead the case of TISCO as ultimately

the liability would be that of latter.

iii. The procedure laid down in the Act as also the rules framed

thereunder being mandatory in nature, it was obligatory on the

part  of  the  TISCO  to  comply  with  requirements  of  the

provisions thereof scrupulously.  

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iv. TISCO  having  not  challenged  the  demand  made  by  the

authorities by way of a writ petition, the Special Leave Petition

filed by it is not maintainable.  

15. We may, at  the  outset,  place  on  record  that  since  Mr.  B.B.  Singh

conceded that the decision of this Court in  Tata Iron & Steel Co. Ltd.  vs.

State of Jharkhand & ors. [supra] has no application to the issues involved

herein, we are not called upon to deal therewith.  

16. BOC admittedly is  the manufacturer  of oxygen gas.   It  is  a  dealer

within  the  meaning  of  the  provisions  of  the  Act  being  a  supplier  of  its

product.   It,  thus,  comes within  the  purview of  ‘dealer’  as  contained  in

Section  2(e)  of  the  Act  as  it  carries  on  the  business  of  buying,  selling,

supplying  or  distributing  goods  for  cash  or  for  deferred  payment  or  for

commission, remuneration or other valuable consideration.  It is an assessee.

It even as an agent of the State is bound to collect taxes on its behalf and

deposit the same in accordance with law.  Non-compliance thereof would

lead  to  penal  actions.   Even  in  the  demand  made  by  the  Deputy

Commissioner,  Commercial  Taxes,  Jamshedpur  Circle,  Jamshedpur  dated

22.7.2005 it was threatened with proceedings for recovery of the differential

amount unless it produced the evidence of deposit thereof.   

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17. Thus, a demand has been made on BOC.  Hence, the opinion of the

High  Court  that  it  did  not  have  any  locus  standi  to  maintain  the  writ

application cannot be accepted.  It may be true that the consumer of oxygen

gas  is  TISCO.   It  was  also  entitled  to  purchase  the  said  goods  at  a

concessional rate. If the material is used for manufacture, the rate of tax is

three per cent whereas if the material is used as raw material for processing

and/or manufacturing of the end product, indisputably, the rate of tax would

be two per cent.  Ultimately, BOC may be entitled to recover the differential

amount of tax from TISCO, but, the same by itself would not mean that it is

a  busybody.  Not  only  the  penal  proceedings  but  also  other  proceedings

could be initiated against it for non-deposit of the aggregate amount of tax

within the prescribed period.  If an order of assessment is passed against the

assessee, the only remedy before it is to prefer an appeal/revision in terms of

the provisions of the Act.  Thus, in our opinion, it was a person aggrieved to

maintain a writ application.

18. In the matter of The Trade Mark No. 70,078 of Wright, Crossley, and

Co. (1898) 15 RPC 131, it was stated:

“I  think,  notwithstanding  what  was  said  in  that case, and has been said in other cases dealing with Trade Marks , that an applicant in order to show that  he is  a person aggrieved,  must  show that in some possible way he may be damaged or injured

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if  the  Trade  Mark  is  allowed  to  stand;  and  by `possible' I mean possible in a practical sense, and not merely in a fantastic view.

[See  Kabushiki Kaisha Toshiba vs. TOSIBA Appliances Co. and Ors.

[2008 (8) SCALE 354]

19. If it is to be held that the assessee is a person aggrieved to question

the  validity  of  the  demand  raised  on  it,  it  will  have  the  locus  standi  to

maintain a writ petition.   

20. The expression “raw material” is not defined.  It has to be given its

meaning as is understood in the common parlance of those who deal with

the matter.  

Oxygen gas when used would admittedly be burnt up. Would it mean

that it ceases to be a raw material is the question?  

In  Collector  of  Central  Excise,  New  Delhi  vs.  M/s  Ballarpur

Industries Ltd. [(1989) 4 SCC 566] on which reliance has been placed upon,

Venkatachaliah,  J.  (as His  Lordship then was) speaking for a bench was

considering a case where the input of sodium sulphate in the manufacture of

paper was held to continue to be a “raw material” by reason of the fact that

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in  the  course  of  the  chemical  reactions  this  ingredient  is  consumed  and

burnt up, holding:

“14. The  ingredients,  used  in  the  chemical technology  of  manufacture  of  any  end-product might  comprise,  amongst  others,  of  those  which may retain their dominant individual identity and character  throughout  the process  and also  in  the end-product; those which, as a result of interaction with  other  chemicals  or  ingredients,  might themselves  undergo  chemical  or  qualitative changes and in such altered form find themselves in  the  end-product;  those  which,  like  catalytic agents,  while  influencing  and  accelerating  the chemical  reactions,  however,  may  themselves remain  uninfluenced  and  unaltered  and  remain independent of and outside the end-products  and those,  as  here,  which  might  be  burnt-up  or consumed in the chemical reactions. The question in the present case i whether the ingredients of the last mentioned class qualify themselves as and are eligible to be called "Raw-Material" for the end- product.  One  of  the  valid  tests,  in  our  opinion, could be that the ingredient should be so essential for  the  chemical  processes  culminating  in  the emergence of the desired end-product, that having regard to its importance in and indispensability for the  process,  it  could  be  said  that  its  very consumption on burning-up is its quality and value as raw-materials. In such a case, the relevant test is not  its  absence  in  the  end-product,  but  the dependence  of  the  end-product  for  its  essential presence  at  the  delivery end of  the  process.  The ingredient goes into the making of the end-product in the sense that without its absence the presence of  the  end-product,  as  such,  is  rendered impossible. This quality should coalesce with the requirement  that  its  utilisation  is  in  the

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manufacturing  process  as  distinct  from  the manufacturing apparatus.”

21. Yet again, in the case of  Tata Engineering & Locomotive Company

Limited  vs.  State of Bihar & Anr.  [(1994) 6 SCC 479], this Court  while

interpreting the provisions of Section 13(1)(b) of the Act itself,  held that

batteries, tyres and tubes which are by themselves finished products would

be raw-material when they are fitted in a vehicle, stating:

“What  requires  consideration,  therefore,  is whether  items such as tyres,  tubes,  batteries  etc. purchased  by  the  appellant  for  use  in  the manufacture  of  vehicles  which  are  otherwise finished products could avail of concessional rate of  tax  at  1%.  That  would  depend  on  the construction and understanding of the expression 'industrial  raw-material  (inputs)'  used  in  the Notification. The word 'raw-material' has not been defined  in  the  Act.  It  has,  therefore,  to  be understood  in  the  ordinary  and  well  accepted connotation of it  in  the common parlance of  the persons who deal with it. According to dictionary, it  means  'something  which  is  used  for manufacturing  or  producing  the  good'.  The ordinary common sense understanding of it is that it is something from which another new or distinct commodity can be produced.”

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22. Mr. B.B. Singh, however, rightly pointed out that the question as to

whether the oxygen gas is a raw material or not had not been raised before

the Assessing Authority.  For the first time, before this Court, a question of

fact has been raised.  We cannot, for arriving at such a finding as to whether

the same is correct or not, rely on Wikipedia alone, on which reliance has

been placed.   

{See Commissioner of Customs, Bangalore vs. ACER India (P) Ltd. [(2008)

1  SCC  382]  and  Ponds  India  Limited  vs.  Commissioner  of  Trade  Tax,

Lucknow [(2008) 8 SCC 369]}

23. We do not know what are the manufacturing processes involved and

what role oxygen gas has to play in the matter of manufacturing of steel.  It

is  also  not  possible  for  us  to  base  our  decision  solely  on  the  basis  of  a

diagram contained in Encyclopaedia Britannica. Whether oxygen gas can be

considered to be a raw material is essentially a question of fact.  Evidence is

required to be adduced.  Such evidence although may be in possession of

TISCO.  In the event,  such a question is  raised by the assessee,  namely,

BOC, the Assessing Authority must go therein.  For the purpose of claiming

exemption from payment of tax and/or special rate of tax applicable to a

particular  gas  or  commodity  or  goods,  the  assessee  itself  must  bring  on

record sufficient materials to show that it comes within the purview of the

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notification.   Both  in  M/s  Ballarpur  Industries  Ltd   (  supra)  and  Tata

Engineering & Locomotive Company Limited  [supra],  the question  as  to

whether sodium sulphate and/or batteries, tyres, tubes were raw materials or

not could be determined by this Court as such a question had been raised by

the Assessing Authority.

24. We may, however, must place on record that we do not agree with

Mr. B.B. Singh that the principle that as a procedure has been prescribed in

the statute, the same must be followed or no benefit would be available to

the assessee as is said to have been held by this Court in Narbada Prasad vs.

Chhagan Lal & Ors. [(1969) 1 SCR 499] and in Kunwar Pal Singh (dead) by

L.Rs.  etc.  etc.  vs.  State  of  U.P.  &  ors. [(2007)  5  SCC  85].   The  said

decisions cannot have any application in the facts of the present case.  

In  Narbada Prasad  vs.  Chhagan Lal  & Ors [supra],  this  Court  was

dealing with a matter concerning Representation of the People Act in regard

to filing of an election petition as in the election petition essential facts as

specified  therein  was  required  to  be  pleaded  in  the  manner  laid  down

therein.  

In Kunwar Pal Singh (dead) by L.Rs. etc. etc. vs. State of U.P. & ors.

[(2007) 5 SCC 85], this Court was dealing with the provisions of the Land

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Acquisition  Act.  Keeping  in  view the  fact  that  the  same was  barred  by

limitation, this Court held:

“The  principle  is  well  settled  that  where  any statutory  provision  provides  a  particular  manner for doing a particular act, then, theat thing or act must  be  done  in  accordance  with  the  manner prescribed therefor in the Act.”

25. For  the  self  same  reasons,  we  are  of  the  opinion,  that  it  is  not

necessary to go into the question as to whether a person even if he proves

that  he  inadvertently  did  not  claim  the  benefit  of  a  notification  would

depend upon the facts and circumstances of each case as no such rule in

absolute terms can be laid down therefor.  

26. We may, however, notice that this Court in  Share Medical Care  vs.

Union of India & ors. [(2007) 4 SCC 573] has opined as under:

“15. From the  above  decisions,  it  is  clear  that even if an applicant does not claim benefit under a particular notification at the initial stage, he is not debarred,  prohibited  or  estopped  from  claiming such benefit at a later stage.”

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27. For the  reasons  aforementioned,  the impugned judgment  cannot  be

sustained.   It  is  set  aside  accordingly.   The  appeals  are  allowed.   The

demand made on the appellant is also set aside.  The question, as to whether

the oxygen gas is a raw material for the manufacture of steel or not may be

determined by the Assessing Authority on the basis of the material(s), which

may be brought  on record by the  parties.   All  contentions  raised by the

parties on the said question shall remain open.  The Assessing Authority is

hereby directed to give an opportunity to the parties to adduce evidence in

this behalf.  All other consequential proceedings may follow on the basis of

the determination on the said question.  

In the facts and circumstances of the case, there shall be no order as

to costs.

……………….…..………….J. [S.B. Sinha]

..………………..……………J. [Cyriac Joseph]

New Delhi; MARCH 05, 2009

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