VISHWANATH JHUNJHUNWALA versus STATE OF UTTAR PRADESH AND ANR.

Citation: [2004] SUPP. 1 S.C.R. 296 · Decided: 16-04-2004 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
.. 
VISHWANATH JHUNJHUNWALA 
v. 
STATE OF UTT AR PRADESH AND ANR. 
APRIL 16, 2004 
B 
(S. RAJENDRA BABU AND G.P. MATHUR, JJ.] 
U.P. Sales Tax Act, 1948: 
Ss. 2(aa) and 28-A(l)-"Business "-Import of coalin connection with-
C Declaration in Form-31-Firm engaged in refining of oil on its own account 
as also on job work basis-Not allowed to use the coal imported on Form-31 
for job work-Held, concept of business would not exclude processing 
materials-Coal imported/or processing raw material is included in definition 
of "business" under s. 2(aa)-Activities of the firm include job work which 
D involve purchase of coal and fall outside exclusionary clause in the definition 
of "business". 
Appellant-firm was engaged in refining of oil on its own account as 
also on job work basis. For this purpose, the appellant was importing coal 
from Central Coal Fields by road. When the appellant applied for issue 
E of 1300 Forms-31 as prescribed under U.P. Sales Tax Act, 1948, 
respondent No. 2, the Assistant Commissioner (Assessment), issued a notice 
requiring the appellant to show cause as to why penalty should not be 
imposed on the firm as the coal which was being imported on Form-31 
was being used for job work whereas it should be used for its own business. 
The appellant was directed not to use the coal imported on Form 31 for 
F job work. The High Court upheld the order holding that since the coal 
intended to be imported by the appellant for job work was not in 
connection with his business, Form 31 could not be issued for the same. 
Hence the appeals. 
G 
Allowing the appeals~ the Court 
HELD: ].I. Admittedly coal is purchased and imported by the 
appellant from outside the State of Uttar Pradesh and, therefore, 
necessarily it involves purchase and sale of goods, if not, anything less. 
The concept of "business"· as per the definition would not exclude 
H 
296 
V. JHUNJHUNWALA v.STATE [RAJENDRA BABU, J.] 
297 
'processing materials' inasmuch as the appellant utilizes the coal imported A 
by him for processing of raw material and such activity is also included 
in the definition of"business" under s.2(aa) of the U.P. Sales Tax Act, 1948. 
(299-E-Hl 
Ganesh Prasad Dixit v. Commissioner of Sales Tax, Madhya Pradesh,. 
[1969) 1SCC492 and The State of Andhra Pradesh v. H. Abdul Bakshi and B 
Bros., 15 STC 644, relied on. 
1.2. When activities of the appellant would necessarily include job, 
work done by him and he cannot do this job work except after purchase 
of coal, his activities even if stated to be one in the nature of mere service, C 
would involve purchase of coal and in that event it falls outside the. 
exclusionary clause in the definition of "business". [300-E] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 164of1997. 
From the Judgment and Order dated 24.5.96 of the Allahabad High D 
Court in C.M.W.P. No. 1065 of 1994. 
WITH 
C.A. Nos. 165-166 of 1997. 
Sunil Gupta and Ms. Meenakshi Arora for the Appellants in C.A. No. .E 
64/97. 
Mis. J.B. Dadachanji & Co, (NP) for the Appellants in C.A.Nos. 165-
166/97. 
R.C. Verma, Mukesh Verma and Manish Shanker for the Respondents. F 
The Judgment of the Court was delivered by 
RAJENDRA BABU, .J. At the outset, we make it clear that the learned 
counsel are· not clear as to the amendments that have been effected to the 
Statutes in question. We are constrained to proceed upon the material placed 
before us and on the basis of the stand taken by them. 
The appellant before us is a partnership firm registered as a dealer 
under the provisions of the UP Sales TaX Act, 1948 (for short 'the Act') and 
G. 
the Central Sales Tax Act. The firm is engaged in refining of oil on its own 
account and also on job work basis. For this purpose the firm required steam H 
298 
SUPREME COURT REPORTS (2004] SUPP. l S.C.R. 
A coal in huge quantity to be used as fuel for manufacturing the refined oil. In 
order to bring coal by road from Central Coal Fields, Ranchi to Varanasi, 
where the appellant's factory is situate, the appellant required Form 31 as 
prescribed under the Act and requested the Assistant Commissfoner 
(Assessment) I Trade Tax Varanasi, respondent No. 2 herein, to issue 1300 
B Forms 31, who instead of issuing Form 31 initiated proceedings under Section 
15-A(l)(r) of the Act asking the appellant to show cause as to why penalty 
be not imposed as coal which was being imported by the appellant on Form 
31 was being used on job work while it should be used for his own busine

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