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ASSI. COMMI SPECIAL CIRCLE COM TAXES JOD v M/S SANKHLA UDYOG - CR Case No. 853 of 2002  RD-RJ 1572 (2 April 2007)
S.B. Civil Sales Tax Revision No.853/2002
Assistant Commissioner, Special Circle,
Commercial Taxes, Jodhpur vs.
M/s. Sankhla Udyog.
Date : 2.4.2007
HON'BLE MR. PRAKASH TATIA, J.
Mr. Sangeet Lodha, for the petitioner.
Mr. Dinesh Mehta, for the respondent.
Heard learned counsel for the parties.
This revision petition has been preferred by the revenue against the order of the Tax Board dated 16.1.2002 by which the Tax Board dismissed the appeal of the revenue preferred against the order of the Dy.
Commissioner (Appeals), Jodhpur dated 3.3.1998. The Dy.
Commissioner (Appeals), Jodhpur held that PCC cement poles are not "articles made of cement" and, therefore, does not fall in Entry 87 of notification no.798 dated 27.6.1990 and, therefore, not taxable at the rate of 12% as article made of cement under Entry 87 (supra).
The Dy. Commissioner (Appeals) as well as Tax Board held that since articles i.e. PCC Poles are not falling in Entry 87 or any other entry made under the notification dated 27.6.1990, therefore, they are taxable in entry no.103 providing rate of tax for all other articles which are not covered under any other entry.
The question of law raised by the revenue is that the Dy. Commissioner (Appeals) as well as the Tax Board committed error of law in holding that the PCC poles are not articles made of cement.
Learned counsel for the petitioner submitted that
Entry 87 (supra) is very clear and unambiguously provides tax at the rate of 12% on "all articles made of cement" and this entry has been interpreted by the
Tax Board as though Entry 87 provides tax for the
"articles made of only cement". It is submitted that the articles made of cement clearly means the articles which have been made by using cement and those articles may have other component also like mud (bajari), gitties and may also have iron rods etc. Simply because some other materials have been used in a product apart from cement, it cannot be said that that article is not made of cement when the binding force for manufacturing article is cement and without cement, the article cannot be made than that is article made of cement and is covered under entry no.87. The definition is wide enough to cover the PCC poles also as PCC poles are made by use of cement and independent articles.
Learned counsel for the respondent/assessee pointed out that the division bench of the Tax Board earlier also, in appeals no.1170/96 and 1171/96 by order dated 5.10.2001 held the PCC poles are not articles made of cement and, therefore, held that the said articles are taxable under the general category at the rate of 10%. It is also submitted that there are number of articles which are made of only cement and for those articles only the tax has been provided at 12% under entry no.87. It is also submitted that the
PCC poles are basically manufactured by use of iron rods and, therefore, the PCC poles are not the product made of only cement.
I considered the submissions of learned counsel for the parties and perused the reasons given by the
Dy. Commissioner (Appeals) and the Tax Board in their respective orders dated 3.3.1998 and 16.1.2002.
Entry 87 provides tax on "articles made of cement". Therefore, basically it is to be seen whether the article in question is made of cement or not ? The word "made" as used in the entry is relevant and has its own significance which makes the entry wide. It nowhere provides that "articles of cement" shall be taxable at the rate of 12%. An article means an independent and separate commodity and when it is manufactured with the inclusion of cement, then it necessarily means that the article may have very many other articles but it is made because of cement. The nature and the properties of cement are not unknown and that is the binding character. Therefore, when an article is made by using cement then for that article, entry 87 is the provision for taxing. Simply because the other articles have been used in manufacturing the product made by cement, it cannot be said that that article is not made by cement. The use of iron rods gives the shape and strength to the cement poles but cannot be made without use of cement and, therefore,
PCC poles are the "articles made of cement".
So far as two division bench judgments of Tax
Board delivered in Appeal no.1170/1996 and 1171/1996 dated 5.10.2001 are concerned, copies of those judgments have not been provided by any of the parties but in view of the reasons mentioned above, this Court is of the view that PCC poles fall in the category of
"articles made of cement" and consequently are covered under entry no.87 and, therefore, liable to be taxed at the rate of 12%.
In view of the above, this revision is allowed, the orders of the Tax Board and Dy. Commissioner
(Appeals) dated 16.1.2002 and 3.3.1998 are set aside and the order of the assessing authority dated 12.7.1996 is upheld.
(PRAKASH TATIA), J.
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