M/S BOC INDIA LTD. versus STATE OF JHARKHAND & ORS.

Citation: [2009] 4 S.C.R. 253 · Decided: 05-03-2009 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2009] 4 S.C.R. 253 
• 
MIS BOC INDIA LTD. 
A 
v. 
STATE OF JHARKHAND & ORS. 
Civil Appeal No. 1538 of 2009 
MARCH 5, 2009 
B 
[S.B. SINHA AND CYRIAC JOSEPH, JJ.] 
., 
Bihar Finance Act, 1981: s.13(1}(b) - Sa/es Tax - Gas 
.. 
producer supplying gas to steel manufacturer who showed 
oxygen in the list of goods taxable at 3% as specified in the c 
Annexure 'B' appended to the Registration Certificate - By 
subsequent Notification, sales tax on sale of raw materials 
required directly for use in manufacture of goods fixed at 2% 
- Gas supplier started charging 2% sales tax on supplies of 
gas to steel manufacturer - Demand notice on gas supplier 
D 
t 
opining that steel manufacturer was liable to pay purchase 
tax at 3% on oxygen gas- Writ petition - Dismissed on ground 
that gas supplier had no locus standi to file writ petition as tax 
was payable by steel manufacturer - Held: Demand was made 
on gas supplier- He was person aggrieved and thus had locus 
standi to file writ petition - Question as to whether oxygen gas E 
was raw material or not in the manufacture of steel is essentially 
a question of fact and cannot be decided in writ petition -
• 
,, 
Demand is set aside- Question to be considered by Assessing 
Officer when raised by assessee - Bihar Sales Tax Rules, 
1983 - r. 6. 
F 
Mis Tata Iron & Steel Company Limited (TISCO) 
produced steel. For the said purpose, it purchased oxygen 
gas from M/s B.O.C. India Ltd. (BOC). 
"': 
TISCO was granted a registration certificate in terms G 
of the provisions of Section 13(1)(b) of the Bihar Finance 
Act, 1981. The said certificate originally was granted on 
16.3.1983 and was renewed from time to time. Oxygen was 
253 
H 
254 
SUPREME COURT REPORTS 
[2009] 4 S.C.R 
A shown in the list of goods taxable at 3% as specified in 
• 
Annexure 'B' appended to the registration certificate. 
From time to time several Notifications were issued 
in terms whereof varying rate of tax were prescribed in 
B 
respect of goods required directly for use in manufacture. 
By Notification dated 3.2.1986, sales tax on sale of the raw 
materials required directly for use in the manufacture of 
processing of goods for sale excluding such raw materials 
which had already undergone any manufacturing or 
t 
,_
production process and which are required for further 
.. 
c assembly thehrewith shall be at the rate of 2%. 
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 
D Certificate wherefor sales tax was payable at the rate of 
3%. Till the Assessment Year 2002-2003, for supply of 
·~ 
' 
oxygen gas to TISCO, BOC charged sales tax at the rate 
of 3%. However, the said purported mistake was sought 
... 
to be rectified by BOC in terms of the said Notification 
E 
dated 3.2.1986 charging 2% sales tax on the supplies of 
oxygen gas made to TISCO. BOC also deposited tax at 
the rate of 2% on the sale of industrial gases to TISCO. 
Department issued a demand notice on BOC. 
" 
Questioning the validity of the notice, a writ petition was 
• 
F filed before the High Court which was dismissed on the 
ground that BOC had no locus standi to file writ petition 
as admittedly tax was payable by TISCO; that TISCO was 
authorized to purchase at the concessional rate of 3% 
and not at the rate of 2% and, thus, the demand was 
G unassailable; that the selling dealer was bound by the 
certificate granted to it under Section 13(1 )(b) of the Act. It 
was also held that whether oxygen gas was a raw material 
or not cannot be decided/determined in writ petition filed 
by BOC as TISCO alone was competent to explain to the 
H prescribed authority as to how an item which had all along 
l 
;. 
... 
·' ' 
• ·' 
MIS BOC INDIA LTD. V 
255 
STATE OF JHARKHAND & ORS. 
been treated and mentioned as goods as per Annexure A 
'B', could be treated as raw material. BOC and TISCO filed 
these appeals. 
Allowing the appeals, the Court 
HELD: 1. BOC was the manufacturer of oxygen gas. 
B 
It was a dealer within the meaning of the provisions of the 
Bihar Finance Act. It was an assessee. It even as an agent 
of the State was 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 c 
notice, it was threatened with proceedings for recovery 
of the differential amount unless it produced the evidence 
of deposit thereof. Thus, 

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