THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, BANGALORE versus AYILI STONE INDUSTRIES ETC. ETC.

Citation: [2016] 11 S.C.R. 129 · Decided: 18-10-2016 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2016] 11 S.C.R. 129 
THE ADDITIONAL COMMISSIONER OF 
COMMERCIAL TAXES, BANGALORE 
v. 
A YILI STONE INDUSTRIES ETC. ETC. 
(Civil Appeal Nos. 1983-2039 of2016) 
OCTOBER 18, 2016 
[DIPAK MISRA AND SHIVA KIRTI SINGH, JJ.] 
Karnataka Sales Tax Act, 1957 - Second schedule [Part S, 
Entry 17 (i) and Part T, Entry 8 ]; and ss. 5, 6B - Exemption from 
sales tax - Polished and unpolished granite stones and Tiles -
Assessing authority allowed exemption on polished granite stone 
but later re-opened the assessment - On reassessment, Assessing 
authority disallowed exemption on ground that polished and 
unpolished granite stones have separate entries in the Entry 17 (i) 
of part S of second schedule -
Propriety of - Held: There is a 
distinction between polished granite stone or slabs and tiles - If a 
polished granite stone is used in a building for any purpose, it will 
come under Entry 17(i) of Part S of the second schedule, but if it is 
a tile, which comes into existence by different process, a new and 
distinct commodity emerges - The process involved is extremely 
relevant - That aspect has not been gone into - The Assessing Officer 
while framing the assessment order has referred to Entry 17(i) of 
Part S but without any elaboration on Entry 8 which carves out 
tiles as a different commodity - A finding has to be arrived at by 
carrying out due enquiry, without which, a final conclusion cannot 
be reached - Matter accordingly remitted back to Assessing officer 
for re-adjudication. 
Allowing the appeals, the Court 
HELD: There is a distinction between polished granite 
stone or slabs and tiles. If a polished granite stone is used in a 
building for any purpose, it will come under Entry 17(i) of Part S 
of the second schedule appended to the Karnataka Sales Tax 
Act, 1957, but if it is a tile, which comes into existence by different 
process, a new and distinct commodity emerges and it has a 
different commercial identity in the market. The process involved 
is extremely relevant. That aspect has not been gone into. The 
129 
A 
B 
c 
D 
E 
F 
G 
H 
130 
SUPREME COURT REPORTS 
f2016l 11 S.C.R. 
A 
Assessing Officer while framing the assessment order has 
referred to Entry l 7(i) of Part S but without any elaboration on 
Entry 8 in Part-T. Entry 8 carves out tiles as a different 
commodity. It uses the words "other titles". A granite tile would 
come within the said Entry if involvement of certain activities is 
B 
established. To elaborate, if a polished granite which is a slab 
and used on the floor, it cannot be called a tile for the purpose of 
coming within the ambit and sweep of Entry 8. Some other 
process has to be undertaken. If tiles are manufactured or 
produced after undertaking some other activities, the position 
would be different. A finding has to be arrived at by carrying out 
C 
due enquiry and for that purpose appropriate exercise has to be 
undertaken. In the absence of that, a final conclusion cannot be 
reached. [Para 28) (148-A-D] 
D 
E 
F 
G 
Mis. Vishwakarma Granites v. Commissioner of 
Commercial Taxes W.P. No. 13803/05 decided on 21st 
June, 2006 by Karnataka High Court; Poonam Stone 
Processing Industries v. Deputy Commissioner of 
Commercial Taxes, Gulbarga STC Vol. 94 page 182; 
Foredge Granite Pvt. Ltd. v. State of Karnataka STRP 
No. 58/1991 decided on 12.12.1994 by Karnataka 
High Court; State of Karnataka v. Goa Granites 2006 
(60) Kar.L.J. 110; Chowgale and Company Pvt. Ltd. 
v. Union of India AIR (1981) SC 1014 : 1981 (2) 
SCR 271; Aman Marble Industries Pvt. Ltd. v. CCE, 
Jaipur (2005) 1 SCC 279; Sterling Foods v. State of 
Karnataka (1986] 63 STC 239; Delhi Cloth and 
General Mills Ltd., vs. State of Rajasthan (1980) 46 
STC 256; Rajasthan SEE v. Associated Stone Industries 
(2000) 6 SCC 141: 2000 (3) SCR 1179; Cloth and 
General Mills Co. Ltd. AIR 1963 SC 791 : 1963 Suppl. 
SCR 586; CCE v. Rajasthan State Chemical Works 
(1991) 4 sec 473: 1991 (1) Suppl. SCR 124 ; ITO, 
Udaipur v. Arihant Tiles & Marbles Pvt. Ltd. (2010) 2 
SCC 699: 2009 (16) SCR21; CITv. N.C. Budharaja 
& Co. 1994 Supp (1) sec 280 : 1993 (2) Suppl. SCR 
185 - referred to. 
Case Law Reference 
H STC Vol. 94, page 182 
referred to 
Para3 
ADDITIONAL COMMNR. OF COMMERCIAL TAXES, 
131 
BANGALORE v. A YILI STONE INDUSTRIES 
2006 (60) Kar.L.J. 110 
A 
referred to 
Para3 
19~1. (2) SCR 271 
(2Q05) 1 sec 219 
119861 63 STC 239 
(1980) 46 STC 256 
2000 (3) SCR 1179 
1963 Suppl. SCR 586 
1991 (1) Suppl. SCR 124 
referred to 
r
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