# M/S Balrampur Chini Mills Ltd. Revisionist v. Commissioner Of Commercial Taxes U.P. Lko Opp. Party

- **Citation:** (2024) 8 ILRA 410
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-08-02
- **Case number:** Sales/Trade Tax Revision No. 21 of 2021
- **Bench:** Alok Mathur
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-balrampur-chini-mills-ltd-revisionist-v-commissioner-of-commercial-taxes-u-52338
- **Pages:** 6

## Headnote

Civil Law - U.P. Value Added Tax Act, 2008
- Section 59 - Revisionist is engaged in
manufacture of sugar - Controversy raised
to purchase of diesel at concessional rate
of
tax
as
per
Notification
of
St.
Government
dated
10.08.2017
-
Concession couldn't be availed due to
want of certificate of Commissioner as
prescribed therein - Application filed
before Commissioner - Rejected - Appeal -
Commercial Tax Tribunal upheld the order
of
Commissioner,
appeal
rejected
-
Impugned order - Held, transportation of
sugarcane from Cane Purchase Centre to
factory premises depicts 'manufacture' of
sugar - Notification dated 07.12.2019
related to manufacture of sugar after
purchasing sugarcane from farmers and
transported from Cane Purchase Centre to
Factory Gate, while Notification dated
10.08.2017, provides concessional rate of
tax to all industrial units for the purpose
of manufacture of taxable goods - If
revisionist has received benefit under
Notification dated 07.12.2019, he can't be
denied
under
Notification
dated
10.08.2017 - In absence of any restrictive
clause in Notification dated 10.08.2017,
the Tribunal and Commissioner had erred
in interpreting the Notification dated
10.08.2017 in its application to sugar
manufacturing units - Thus, entitled to
benefit
for
purchase
of
diesel
at
concessional rate of tax. (Para 3, 4, 5, 6, 8,
12, 17, 18, 19)

Revision is allowed. (E-13)

List of Cases cited:

M/s Triveni Engineering & Industries Ltd Vs
Commissioner Trade Tax, (Sales/Trade Tax
Revision No. 1496 of 2004)

## Text

410 INDIAN LAW REPORTS ALLAHABAD SERIES
of 2016 and orders dated 24.5.2016 and
23.06.2016 in Writ- A No.8507 of 2024
passed
by
the
Secretary,
Vocational
Education
and
Skill
Development
Department, State of U.P. are unsustainable
in law and are hereby quashed.

28. A mandamus is issued to the
respondent No.1- Secretary, Vocational
Education and Skill Development, State of
U.P. to pass fresh orders regarding
regularization of services of the petitioners,
after taking into consideration the merit of
the claim of each individual petitioner,
within a period of three months from the
date of receipt of certified copy of this
order. Till a final order is passed in the
matter, the petitioners shall be allowed to
continue to remain in service and will be
paid their salaries regularly.
----------
(2024) 8 ILRA 410
REVISIONAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 02.08.2024

BEFORE

THE HON'BLE ALOK MATHUR, J.

Sales/Trade Tax Revision No. 21 of 2021

M/S Balrampur Chini Mills Ltd.
 ...Revisionist
Versus
Commissioner Of Commercial Taxes U.P.
Lko ...Opp. Party

Counsel for the Revisionist:
Rishabh Pandey, Rahul Agarwal

Counsel for the Opp. Party:
C.S.C.

Civil Law - U.P. Value Added Tax Act, 2008
- Section 59 - Revisionist is engaged in
manufacture of sugar - Controversy raised
to purchase of diesel at concessional rate
of
tax
as
per
Notification
of
St.
Government
dated
10.08.2017
-
Concession couldn't be availed due to
want of certificate of Commissioner as
prescribed therein - Application filed
before Commissioner - Rejected - Appeal -
Commercial Tax Tribunal upheld the order
of
Commissioner,
appeal
rejected
-
Impugned order - Held, transportation of
sugarcane from Cane Purchase Centre to
factory premises depicts 'manufacture' of
sugar - Notification dated 07.12.2019
related to manufacture of sugar after
purchasing sugarcane from farmers and
transported from Cane Purchase Centre to
Factory Gate, while Notification dated
10.08.2017, provides concessional rate of
tax to all industrial units for the purpose
of manufacture of taxable goods - If
revisionist has received benefit under
Notification dated 07.12.2019, he can't be
denied
under
Notification
dated
10.08.2017 - In absence of any restrictive
clause in Notification dated 10.08.2017,
the Tribunal and Commissioner had erred
in interpreting the Notification dated
10.08.2017 in its application to sugar
manufacturing units - Thus, entitled to
benefit
for
purchase
of
diesel
at
concessional rate of tax. (Para 3, 4, 5, 6, 8,
12, 17, 18, 19)

Revision is allowed. (E-13)

List of Cases cited:

M/s Triveni Engineering & Industries Ltd Vs
Commissioner Trade Tax, (Sales/Trade Tax
Revision No. 1496 of 2004)

(Delivered by Hon'ble Alok Mathur, J.)

1. Heard Sri Rahul Agarwal, learned
counsel for petitioner as well as Sri Sanjay
Sarin,
learned
Standing
Counsel
for
respondents.

2. By means of present revision, the
revisionist has challenged the judgment of
the Full Bench of the Commercial Tax
Tribunal dated 25.02.2021 passed in
8 All. M/S Balrampur Chini Mills Ltd. Vs. Commissioner Of Commercial Taxes U.P. Lko
411
Appeal No. 01 of 2021 whereby they have
upheld the opinion / decision of the
Commercial Tax Tribunal, Uttar Pradesh
dated 18.08.2021 wherein it was held that
revisionist is not entitled for the benefit of
Notification issued by the State of U.P.
dated 10.08.2017 wherein the industrial
units registered under the U.P. G.S.T. Act,
2017 were entitled for concessional rate of
tax on the price of diesel which is used in
the process of manufacture of taxable
goods against a certificate prescribed by the
Commissioner.

3. It has been submitted by learned
counsel for revisionist that revisionist is
under the U.P. G.S.T. Act and is engaged in
manufacture of sugar by its unit at
Balrampur, Uttar Pradesh. It is stated that
for the purpose of manufacture of sugar,
the sugar-cane is purchased from the
farmers which are brought by them to the
cane purchase centre established within the
reserved area or assigned area. From the
cane purchase centres the sugarcane is
transported by the revisionist industrial unit
to the factory premises where it is crushed
and ultimately results in manufacture of
sugar and also other byproducts.

4. The controversy pertains to the
purchase of diesel at concessional rate of
tax as per Notification of the State
Government dated 10.08.2017 where the
concession could not be availed by the
revisionist due to want of certificate of the
Commissioner as prescribed therein.

5. The petitioner being aggrieved
by non-issuance of the certificate by the
Commissioner had invoked the provisions
of Section 59 of U.P. Value Added Tax
(VAT) Act and referred the dispute to the
Commissioner stating that they were fully
entitled and eligible for being granted
permission for purchase on concessional
rate of tax of diesel but merely for want of
a certificate by the Commissioner they
were
deprived
of
the
same
and
consequently prayed that they should be
declared
to
be
eligible
under
the
Notification dated 10.08.2017 entitling
them to purchase diesel on concessional
rate of tax.

6.

The
Commissioner
by
his
opinion/order
dated
04.12.2020
has
rejected the application of the revisionist on
two grounds. Firstly, that the crushing
process starts only when the sugarcane
reaches the factory premises and in the
present
controversy
the
petitioner
is
seeking purchase on concessional rate of
tax on diesel for its transportation from the
cane purchase centre to the factory
premises. He was of the view that no aspect
of
'manufacturer'
is
involved
in
transportation of sugarcane from cane
purchase centre to the factory premises.

7. The second reason for rejecting the
prayer of the revisionist was that with
regard to transport from the cane purchase
centre to the factory premises, the State
Government in any case is covered by a
Notification dated 07.12.2019 wherein the
petitioner and the other Sugar Industries
has been granted 42 paisa per quintal per
kilometer rebate on the price of the
sugarcane which is deducted from the
farmer and accordingly, he was of the view
that double benefit would accrue to the
revisionist in case they were also given the
benefit
of
the
Notification
dated
10.08.2017.

8. The revisionist being aggrieved by
the order dated 04.12.2020 has preferred an
appeal
before
the
Commercial
Tax
Tribunal. The Commercial Tax by means
412 INDIAN LAW REPORTS ALLAHABAD SERIES
of impugned judgment dated 25.02.2021
also upheld the order of the Commissioner,
Commercial Tax dated 04.12.2020 against
which the present revision has been filed.

9. The Commercial Tax Tribunal has
also affirmed the opinion/order rendered by
the Commissioner while rejecting the
appeal preferred by the revisionist.

10. Learned counsel for revisionist
has submitted that the first issue is
pertaining to as to whether the process of
manufacturing commences from Cane
Purchase Centre or after the sugarcane
reaches the factory premises is no longer in
res-integra and a Coordinate Bench of this
Court in the case of M/s Triveni
Engineering
&
Industries
Ltd
Vs.
Commissioner Trade Tax, (Sales/Trade
Tax Revision No. 1496 of 2004) has
extensively dealt this aspect, as under:-

"6. The term used in Section
8(3)(b) of Act, 1956 is "for use by him in
manufacture or processing of goods for
sale", which are relevant for the purpose of
present case since other items mentioned
therein are not admittedly attracted. The
question would be whether the two
activities, in respect whereto revenue has
found assessee guilty of violation, the
purpose, for use of which, diesel was
allowed to be purchased against Form-C,
is one authorised or not.

7. In order to understand, it
would be appropriate first to examine as to
what is the actual way in which assessee
claim aforesaid two activities to constitute
part of manufacture and processing of
goods.

8.
The
assessee
deals
in
manufacture and sale of sugar for which
sugarcane is the basic raw material. The
sugarcane is produced by individual
farmers. Sugarcane constitutes basic raw
material for the assessee for manufacturing
sugar. However, supply and purchase of
sugarcane from farmers is not free,
inasmuch as, it is controlled by statute and
in Uttar Pradesh, it is regulated by
U.P.Sugarcane (Regulation of Supply &
Purchase) Act, 1953 (hereinafter referred
to as "Sugarcane Supply and Purchase Act,
1953").

9.
A
sugar
factory
cannot
purchase sugarcane from any farmer at its
own volition but it is bound to purchase
sugarcane only from such farmers, who are
within a reserved area declared by Cane
Commissioner for the purpose of a
particular sugar factory, or assigned to it.
For the purpose of sale and purchase of
sugarcane in reserved or assigned area,
State Government is empowered to regulate
it vide Section 16 of Sugarcane Supply and
Purchase Act, 1953. In this regard, it has
framed
rules
namely
U.P.Sugarcane
(Regulation of Supply & Purchase) Rules,
1954
(hereinafter
referred
to
as
"Sugarcane Supply and Purchase Rules,
1954"). The factory owner is required to
specify cane purchase centres throughout
reserved
area/assigned
area
so
that
farmers may not be required to transport
sugarcane for long distance and factory
owner himself would purchase sugarcane
at those purchase centres and thereafter
transport to its factory for its use. At
purchase centres, factory owner is also
obliged to provide weighment facilities and
adequate labour for loading and unloading
cane at such purchase centres. This is
evident from Rules 38, 38-A and 39 of
Sugarcane Supply and Purchase Rules,
1954. The sugarcane purchased by factory
owner at purchase centres therefore,
become property of factory owner at such
purchase centres and therefrom, it has to
8 All. M/S Balrampur Chini Mills Ltd. Vs. Commissioner Of Commercial Taxes U.P. Lko
413
be transported by him upto the pithead in
the factory for the purpose of its crushing.

10. It is not disputed by learned
Standing Counsel that if the sugarcane if
stored in factory premises itself, at some
place, since a very large quantity thereof
would be required continuously, and, if it is
transported from that storage point to the
pithead
for
crushing
purpose,
such
transportation
would
form
part
of
manufacture. In that view, I do not find why
transportation of sugarcane from purchase
centres to factory premises should be
excluded from the term "manufacture of
sugar". Nothing has been shown to this
Court so as to pursue to take a different
view in the matter.
 11. The term "manufacture" has
varied meanings and has got various sheds.
It has to be considered in the context of
item, which is up for consideration.
General
understanding
of
term
"manufacture" is that it means bringing
into existence a new substance. The word
"manufacture" implies a change but every
change in the raw material is not
manufacture.

12. In CST Vs. Lal Kunwa Stone
Crusher (P.) Ltd., (2000) 118 STC 287
(SC) the Court said that definition of the
word "manufacture" makes it clear that
every activity in relation to goods not only
alter the same but also processing the same
has also been included.

13.
The
term
"manufacture"
includes any process or part of process for
making, altering, ornamenting, finishing,
taking, labelling or otherwise drawing or
tapping with a view to sell or distribute in
the context of a drug. The "manufacture"
involves series of processes and includes
any process incidental or ancillary to the
completion of a manufactured product as
held in Union of India Vs. Ahmedabad
Electricity Co. Ltd., (2003) 11 SCC 129.

14. In the context of mining of
ore, the Court in Chowgule & Co. Pvt. Ltd.
and Anr. Vs. Union of India & Ors., AIR
1981 SC 1014 said:

"Where a dealer is engaged both
in mining operation as also in processing
the mined ore for sale, the two processes
being interdependent, it would be essential
for carrying on the operation of processing
that the ore should be carried from the
mining site mined ore for sale, the two
processes being inter-dependent, it would
be essential for carrying on the operation
of processing that the ore should be carried
from the mining site where the mining
operation comes to end to the place where
the processing is carried on and that would
clearly be an integral part of the operation
of processing and if any machinery,
vehicles, barges and other items of goods
are used for carrying the ore from the
mining site to the place of processing, they
would clearly be goods used in processing
of ore for sale. It is obvious that, in the
present case, the mining of ore is done by
the assessee with a view to processing the
mined ore through the Mechanical Ore
Handling Plant at the Marmagoa harbour
and the entire operation of mining ore and
processing the mined ore is one integrated
process of which transportation of the
mined ore from the mining site to the
Marmagoa harbour is an essential part
and, in the circumstances, it is difficult to
see how the machinery, vehicles, barges
and other items of goods used for
transporting the mined ore from the mining
site to the Marmagoa harbour can be
excluded from consideration on the ground
that they are not goods used in processing
of ore for sale. The decision of this Court in
Indian Copper Corporation case (supra) is
directly in point and completely supports
this conclusion which we are inclined to
reach on principle. The assessee in that
414 INDIAN LAW REPORTS ALLAHABAD SERIES
case was a company which mined copper
and iron ore from its own mines,
transported the ore to its factory and
manufactured finished products from the
ore for sale."
(emphasis added)

15. In J.K. Cotton Spinning &
Weaving Mills Co. Ltd. v. Sales Tax
Officer, Kanpur and Anr., 1965 (1) SCR
900, the Court said that if a process or
activity was so integrally related to the
manufactured goods so that without that
process or activity, manufacture may, even
if theoretically possible, be commercially
inexpedient, goods intended for use in the
process or activity would qualify.

16.
In
the
present
case,
sugarcane in its entirety cannot be
purchased by sugar factory at its factory
premises and under law, it is bound to
purchase from the farmers at cane
purchase centres. For manufacturing of
sugar, crushing of surgarcane is an
integral part and for that purpose,
sugarcane has to be transported from its
place of storage or where it has been
purchased to the point of crushing pit
where it has to be off loaded for crushing.
To my mind, this is integrally connected
part of process of manufacturing of sugar
and therefore diesel purchased against
Form-C if used for cane procurement from
centres to factory, it would not amount to
violation of purpose for which the said
diesel was purchased. The question no.1,
therefore, is answered accordingly."

11. According to the aforesaid
judgment, undoubtedly, the transportation
of sugarcane from the Cane Purchase
Centre to the Factory Premises is included
in the term 'manufacture' of sugar and the
Tribunal has not correctly appreciated the
controversy and has clearly erred in law.

12. It has further been submitted that
the said judgment has become final and the
State did not challenge the same before
Hon'ble the Supreme Court

13. The second question which arises
for consideration is with regard to the
benefit obtained by the revisionist under
the Notification dated 07.12.2019 which
according to the State Advised Price, the
revisionist was also given 42 paisa per
quintal per kilometer to a limit of Rs. 8.35
p per quintal for transportation of the
sugarcane from the Cane Purchase Centre
to the Factory Premises.

14. In this regard, it has been
submitted
that
the
said
amount
as
prescribed
in
the
Notification
dated
07.12.2019 pertains to transportation of
sugarcane and it is clearly not in relation to
the purchase of diesel for transportation of
sugar which two things are distinguishable
and separate.

15. It was further vehemently
submitted that Notification to benefit of
which is being sought by the petitioner
dated 10.08.2017 is applicable all across
the board to all the manufacturing units
which fulfill conditions prescribed therein,
namely, that the beneficiary industrial unit
should be engaged in manufacture of
taxable goods under the U.P. G.S.T. Act
and for the said manufacture they are
required to obtain a certificate from the
Commissioner, subsequent to which they
will be entitled to purchase diesel at the
concessional rate of tax. It has been
submitted that the Notification dated
07.12.2019 and 10.08.2017 have been
passed by the State of U.P. which was fully
aware of the benefits being granted to the
industrial units. The beneficial piece of
legislation or policy seeking to promote
8 All. Smt. Meetu Paruthi Vs. Kushank Paruthi
415
industrialization which itself does not
provide for any restriction or limitations in
its application to any particular segment or
the
industries
given
by
the
State
Government has to be liberally construed
keeping in view the object for such grant of
subsidies or benefits to the industrial units.

16. Sri Sanjay Sarin, learned Standing
Counsel for the State has opposed the
revision. He has submitted that there is no
infirmity in the order passed by the
Commissioner, Commercial Tax as well as
Commercial Tax Tribunal wherein it has
denied the benefit to the revisionist of the
Notification dated 10.08.2017 where it was
found that the revisionist is already taking
benefit of concessional rate of tax as
provided for by the State Government in its
Notification dated 07.12.2019 and they
cannot be given a benefit of transpiration of
sugarcane from the Cane Purchase Centre
to Factory Premises, once the same benefit
has
already
been
obtained
by
the
revisionist.

17. The benefit granted by Notification
dated 07.12.2019 clearly confines to the
industrial
units
who
are
engaged
in
manufacture of sugar after purchasing
sugarcane from the farmers where benefits of
transportation from the Cane Purchase Centre
to the Factory Gate was provided, while by
Notification dated 10.08.2017. Benefit for
concessional rate of tax was provided to all
the industrial units for the purpose of
manufacture of taxable goods. Clearly even
if the revisionist has received benefit under
the Notification dated 07.12.2019 he cannot
be denied the benefits under Notification
dated 10.08.2017 inasmuch as there is no
provision for excluding the revisionist for
being granted benefit under the said
Notification, and no such restrictions could
be placed before us.

18. Had it been the intention of the
Government to deny the benefit of the
Notification dated 10.08.2017 in light of the
fact that the sugar industrial units are already
obtaining benefits under Notification dated
07.12.2019, the said facts would have been
clearly mentioned in the Notification dated
10.08.2017. In absence of any restrictive
clause in the Notification dated 10.08.2017,
the Tribunal as well as the Commissioner,
Commercial Tax had erred in interpreting and
restricting
the
interpretation
of
the
Notification
dated
10.08.2017
in
its
application to the sugar manufacturing units.

19. In light of the aforesaid discussions,
this Court is of the considered view that
Commissioner, Commercial Tax as well as
Commercial Tax Tribunal both have erred in
interpreting the provisions of Notification
dated 10.08.2017, according this Court is of
the considered view that the revisionist
clearly falls within the ambit of provisions
contained in the aforesaid notification and
was entitled to the benefit for purchase of
diesel at the concessional rate of tax as
prescribed therein.

20. In light of the above, the revision is
allowed.
The
impugned
orders
dated
04.12.2020 and 25.02.2021 are set aside.
----------
(2024) 8 ILRA 415
REVISIONAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 30.08.2024

BEFORE

THE HON'BLE NEERAJ TIWARI, J.

Civil Revision No. 75 of 2024

Smt. Meetu Paruthi ...Revisionist
Versus
Kushank Paruthi ...Opp. Party