THE STATE OF BIHAR AND ORS. versus MIS. UNIVERSAL HYDROCARBONS CO. LTD. AND ANR.

Citation: [1994] SUPP. 2 S.C.R. 627 · Decided: 12-08-1994 · Supreme Court of India · Bench: M.N. VENKATACHALIAH, S. MOHAN
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Judgment (excerpt)

THE STATE OF BIHAR AND ORS. 
v. 
MIS. UNIVERSAL HYDROCARBONS CO. LTD. AND ANR. 
AUGUST 12, 1994 
(M.N. VENKATACHALlAH ANDS. MOHAN, JJ.] 
Central Sales Tax Act, 1956 : Section 14-Goods-Classification as 
declared goods-Object of 
A 
B 
Entry ( 1-Ar'Coal including coke in all its fonn but excluding C 
charcoal'-Scope of 
Section 15(a)(b )--Exemption/Reimbursement under-Benefit of-
Where assessee was purchasing Raw Petroleum Coke ·and after subjecting it 
to manufactun"ng process was producing Calcined Petroleum Coke, held 
entitled to benefit under section 15(b ). 
D 
The respondent was purchasing Raw Petroleum Coke (RPC) and 
after subjecting It to a process of manufacture was producing Calcined 
Petroleum Coke(CPC). On the sale of CPC it was subjected to Sales Tax 
under the Bihar Finance Act, 1981 as well as Central Sales Tax Act 1956. E 
Respondent filed an application for refund of sales tax under section 15(b) 
of the 1956 Act,read with Rule 35 of the Bihar Sales Tax Rules 1983 on the 
ground that both these items (RPC and CPC) fall under Section 14(1-A) 
of the Central Sales Tax Act, 1956. The claim was rejected by the Joint 
Commissioner holding that (I) though RPC an CPC both are declared 
goods under section 14(1-a) yet for the purpose of sales tax they are two 
F 
separate commercial commodities; (ii) since the benefit under Section 
15 (b) of the Act could be availed of only if the same goods are subject to 
interstate levy of tax the respondent was not entitled to this benefit because 
by the process of manufacture RPC loses Its original Identity and emerges 
as a new product viz. CPC. 
G 
The High Court held that CPC Is a form of RPC and therefore 
respondent was entitled to exemption/reimbursement under section 15-b 
of the 1956 Act. 
In appeal to this 1.t was contended on behalf of the appellant-state H 
627 
628 
SUPREME COURT REPORTS (1994) SUPP. 2 S.C.R. 
A that no doubt the entry under section 14(1a) of the Act says 'Coal' 
including coke in its form but excluding Charcoal' but in view of the 
judgment of this Court in State of Tamil Nadu v. Pyare Lal Malhotra, A.l.R. 
(1976) SC 800 it should be held that since RPC under goes the process of 
manufacture and emerges as a new product i.e. CPC, It should be treated 
B a different product for the purpose of taxation. 
On behalf of the respondent it was contended that there is a wide 
distinctio11 between entry under section 14(1-a) of the Central Sales Tax 
relating to coke in all forms and Section 14(iv)-iron and steel, 'that is to 
say'. Because of this peculiar phraseology 'that is to say', the ruling in 
C Pyare Lal case came to.be so laid down. But in this case, there is no such 
difficulty, havi11g regard to the nature of the entry. 
Dismissing the appeal, this Court 
HELD : 1. When the entry relating to coke occurring under section 
D 14(1-a) of the Central Sales Tax Act, 1956 says 'coke in all its forms', there 
Is no possibility of bringing coke of different forms except under this entry. 
Once the entry is 'coke in all its forms' irrespective of the fact Raw 
Petroleum Coke loses its original identity or in the process of manufacture 
Calcined Petroleum Coke is produced, cannot take Calcined Petroleum 
Code out of the purview of this entry. The fact that Calcined Petroleum 
E Coke is a different commodity is of little consequence. Consequently, the 
judgment of the High Court is upheld. (633-F, 634-A, El 
2. Pyare Lal Malhotra's case dealt with the scope of the entry 14(iv) 
of the Act, Iron and steel 'that is to say' and in that the Interpretation of 
F 
the phrase 'that is to say' loomed large. The position here is entirely 
differenl There is no such phrase under Section 149(1-a) of the Act. This 
vital distinction cannot be lost sight of. (635-E, 636-C, Fl 
Indian Carbon Ltd. v. Superintendent of Taxes, Guwahati & Ors., 
A.l.R. (1972) SC 154 and State of Tamil Nadu v. Mahi Traders, (1989) 1 
G sec 724, relied on. 
State of Tamil Nadu v. Pyare Lal Malhotra, A.l.R. (1976) SC 800 and 
Sait Rikhaji Furtamal and Anr. v. State of Andhra Pradesh, (1991] Supp. 1 
S.C.C. 202, explained and distinguished. 
H 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 6073-74 
STATE v. UNNERSALHYDROCARBONS CO. LTD. [MOHAN, J.] 629 
of 1994. 
From the Judgment and Order dated 10.4.92 of the Patna High Court 
in C.W J.C. No. 415/92 & 7549 of 1990. 
H.L. Aggarwal and B.B. Singh for the Appellants. 
P.P. Rao, Vivek Gambhir and Suman Khaitan for Mis. Khaitan & 
Co.
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