# M/S Century Laminating Comp. Ltd v. Assessing Authority U.P. Pollution Control Board & Anr

- **Citation:** (2025) 11 ILRA 936
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-11-06
- **Case number:** Writ - C No. 1001686 of 2004
- **Bench:** Irshad Ali
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-century-laminating-comp-ltd-v-assessing-authority-u-p-pollution-control-54810
- **Pages:** 10

## Headnote

Sudeep Kumar, Ashok Kumar Verma,
Sudhir Pande

ISSUE FOR CONSIDERATION
Whether
a
decorative
laminates
manufacturing unit producing decorative
laminated sheets (Sunmica), using Kraft
paper, waste paper, phenol, card phenol,
melamine and formalin as raw materials,
could be treated as a "Chemical Industry"
or "Paper Industry" falling under Schedule-I
of the Water (Prevention and Control of
Pollution) Cess Act, 1977, so as to attract
levy of cess; and whether the assessment
orders
imposing
cess
were
without
jurisdiction.

HEADNOTE
Water (Prevention and Control of Pollution) Cess
Act, 1977 - ss. 3(2), 3(2A), 7 - Schedule-I -
Levy
of
cess
-
Decorative
laminates
manufacturing industry - Use of Kraft paper,
waste paper, phenol, card phenol, melamine and
formalin as raw materials - Whether "Chemical
Industry" or "Paper Industry" - Assessment
orders passed treating the entire unit as
chemical industry - Challenge.
HELD:
Cess Act is a fiscal statute and must be
construed strictly - Industry must fall squarely
within the specified industries enumerated in
Schedule-I - Nature of industry cannot be
determined merely on the basis of raw materials
used - Predominant purpose, manufacturing
process and ultimate product are determinative
-
Decorative
laminated
sheets
(Sunmica)
constitute a finished, composite product -
Decorative laminates manufacturing industry
does not find mention in Schedule-I - End
product cannot be classified as "Paper" or
"Chemical" - Chemical process may be involved
to some extent in all industries, but an industry
would be known as a chemical industry only if it
carries out predominantly chemical activities and
is involved in chemical endeavours - Decorative
laminates
manufacturing
unit
cannot
be
regarded as a chemical industry for the purpose
of levy of cess - Assessment orders imposing
cess are without authority or jurisdiction - Liable
to be quashed - Amount of cess deposited
directed to be refunded - Cess in respect of
water consumed in the Formaline Plant to be
levied in accordance with law under ss. 3(2A)
and 3(2). [Paras 16-24, 29-32] (E-5)

CASE LAW CITED
A.P. Board for Water Pollution Control v. A.P.
Rayons Ltd., (1989) 1 SCC 44 - relied on.
Saraswati Sugar Mills Ltd. v. Haryana State
Board, (1992) 1 SCC 418 - relied on.

List of Acts
Water (Prevention and Control of Pollution) Cess
Act, 1977;
Water (Prevention and Control of Pollution) Act,
1974;
Environment (Protection) Act, 1986.

List of Keyword
Decorative
laminates;
Sunmica;
Chemical
industry;
Paper
industry;
Schedule-I;
Predominant purpose; Ultimate product; Fiscal
statute; Levy of cess; Lack of jurisdiction;
Refund of cess; Formaline Plant.

CASE ARISING FROM
Orders dated 22.04.2002 and assessment
orders
dated
17.08.2002,
25.07.2002,
29.08.2002, 17.11.2003 and 09.03.2004.
11 All. M/S Century Laminating Comp. Ltd. Vs. Assessing Authority U.P. Pollution Control Board
 & Anr.
937
Appearances for Parties
Advs For Petitioner: Smita Chitranshi.
Advs For Respondents: Sudeep Kumar, Ashok
Kumar Verma, Sudhir Pande.

## Text

936 INDIAN LAW REPORTS ALLAHABAD SERIES

16. The record produced today is
returned to the learned Standing Counsel.
----------
(2025) 11 ILRA 936
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 06.11.2025

BEFORE

THE HON'BLE IRSHAD ALI, J.

Writ - C No. 1001686 of 2004

M/S Century Laminating Comp. Ltd.
 ...Petitioner
Versus
Assessing Authority U.P. Pollution Control
Board & Anr. ...Respondents

Counsel for the Petitioner:
Smita Chitranshi

Counsel for the Respondents:
Sudeep Kumar, Ashok Kumar Verma,
Sudhir Pande

ISSUE FOR CONSIDERATION
Whether
a
decorative
laminates
manufacturing unit producing decorative
laminated sheets (Sunmica), using Kraft
paper, waste paper, phenol, card phenol,
melamine and formalin as raw materials,
could be treated as a "Chemical Industry"
or "Paper Industry" falling under Schedule-I
of the Water (Prevention and Control of
Pollution) Cess Act, 1977, so as to attract
levy of cess; and whether the assessment
orders
imposing
cess
were
without
jurisdiction.

HEADNOTE
Water (Prevention and Control of Pollution) Cess
Act, 1977 - ss. 3(2), 3(2A), 7 - Schedule-I -
Levy
of
cess
-
Decorative
laminates
manufacturing industry - Use of Kraft paper,
waste paper, phenol, card phenol, melamine and
formalin as raw materials - Whether "Chemical
Industry" or "Paper Industry" - Assessment
orders passed treating the entire unit as
chemical industry - Challenge.
HELD:
Cess Act is a fiscal statute and must be
construed strictly - Industry must fall squarely
within the specified industries enumerated in
Schedule-I - Nature of industry cannot be
determined merely on the basis of raw materials
used - Predominant purpose, manufacturing
process and ultimate product are determinative
-
Decorative
laminated
sheets
(Sunmica)
constitute a finished, composite product -
Decorative laminates manufacturing industry
does not find mention in Schedule-I - End
product cannot be classified as "Paper" or
"Chemical" - Chemical process may be involved
to some extent in all industries, but an industry
would be known as a chemical industry only if it
carries out predominantly chemical activities and
is involved in chemical endeavours - Decorative
laminates
manufacturing
unit
cannot
be
regarded as a chemical industry for the purpose
of levy of cess - Assessment orders imposing
cess are without authority or jurisdiction - Liable
to be quashed - Amount of cess deposited
directed to be refunded - Cess in respect of
water consumed in the Formaline Plant to be
levied in accordance with law under ss. 3(2A)
and 3(2). [Paras 16-24, 29-32] (E-5)

CASE LAW CITED
A.P. Board for Water Pollution Control v. A.P.
Rayons Ltd., (1989) 1 SCC 44 - relied on.
Saraswati Sugar Mills Ltd. v. Haryana State
Board, (1992) 1 SCC 418 - relied on.

List of Acts
Water (Prevention and Control of Pollution) Cess
Act, 1977;
Water (Prevention and Control of Pollution) Act,
1974;
Environment (Protection) Act, 1986.

List of Keyword
Decorative
laminates;
Sunmica;
Chemical
industry;
Paper
industry;
Schedule-I;
Predominant purpose; Ultimate product; Fiscal
statute; Levy of cess; Lack of jurisdiction;
Refund of cess; Formaline Plant.

CASE ARISING FROM
Orders dated 22.04.2002 and assessment
orders
dated
17.08.2002,
25.07.2002,
29.08.2002, 17.11.2003 and 09.03.2004.
11 All. M/S Century Laminating Comp. Ltd. Vs. Assessing Authority U.P. Pollution Control Board
 & Anr.
937
Appearances for Parties
Advs For Petitioner: Smita Chitranshi.
Advs For Respondents: Sudeep Kumar, Ashok
Kumar Verma, Sudhir Pande.

(Delivered by Hon'ble Irshad Ali, J.)

1. Heard Smt. Smita Chitranshi,
learned counsel for the petitioner and Shri
Ashok Kumar Verma, learned counsel for
the respondents.

2. By means of the present writ
petition, the petitioner has prayed for the
following reliefs:

 a) an appropriate writ, order, or
direction in the nature of Certiorari
quashing
the
order/
judgment
dated
22.4.2002 (contained in Annexure no.1)
along
with
assessment
orders
dated
17.8.2002,
17.8.2002,
25.7.2002,
25.8.2002, 17.11.2003, 9.3.2004 contained
in Annexure Nos.1 to 6, 17, 18.

 b) an appropriate writ, order or
direction to hold that petitioner industry
(whole) is not covered under Schedule I of
Cess Act and is exempted from levy of cess
with a further direction to respondents to
refund the total amount of Cess deposited
by petitioner industry.

 c) an appropriate writ, order or
direction declaring that the 'Formaline
Plant' of petitioner industry is "Chemical
Industry" and accordingly to hold the
petitioner industry liable for payment of
Cess in respect of water consumed by it in
'Formaline Plant' on the basis of return in
accordance with maximum rates under
Section 3(2A) for the pleriod 1.1.1995 to
31.12.1996 and maximum rates under
Section 3(2) along with prescribed rebate
for the period 1.1.1997 to 31.12.2000,
31.12.2000 to 3.2.2004.
 d) to quash the observation made
with
regard
to
quantity
of
water
consumption in judgment (annexure no.1)
i.e. 356 K1/D for the period 1.1.1993 to
31.12.1994, 704 K1/D for the period
1.1.1995 to 31.12.1996, 704 K1/D for the
period 1.1.1997 to 30.9.1998, 778 K1/D for
the
period
1.10.1998
to
31.3.2000
alongwith the quashing of annexure no.2 to
6, 17, 18 accordingly. The respondent no.1
may further be directed to make assessment
on the basis of return at the maximum rate
under Section 3(2A) for the period 1.1.1993
to 31.12.1996 and at the maximum rate
under Section 3(2) for the period 1.1.1997
to 31.12.2000 alongwith prescribed rebate.

 d) any other writ order or
direction which this Honble Court deems
just and proper in the circumstances of the
case may also be issued in favour of the
petitioner.

 f) cost of petition may also be
awarded in favour of petitioner."

3. Facts of the case are that in the
year 1982, petitioner industry was installed.
It used to purchase its raw materials i.e.
craft paper, base paper, phenol, card
phenol,
malamine,
formaline.
It
manufacture decorative laminates sheet of
required thickness by putting craft and base
sheets paper (impregnated with phenol/
Formaldehyde resin) one over the other by
using high pressure and heat. These
composite sheet then trimmed and sanded.
Such finished sheets are called decorative
laminated sheets.

 On 11.1.1995 respondent no.2
given "No Objection Certificate" for
installation
of
a
new
plant
for
manufacturing of 20 MT/ day Formaline in
its existing unit. Therefore, it do not make
938 INDIAN LAW REPORTS ALLAHABAD SERIES
any
difference
for
the
purpose
of
applicability
of
Cess
Act.
Petitioner
industry is a law abiding industry, so it is
always intended to adopt and carry out the
prevention and control policies in order to
protect the environment. Effluent treatment
plant as well as water meters are installed
in the industry. Water, consent under
Section 25 of the Water (Prevention and
Control of Pollution) Act, 1975 (since
1997) is being granted to petitioners
industry. It is also conforming the standards
laid down by the Central Government
under the Environment (Protection) Act,
1986.

 The International Organization
for
Standardization
is
a
worldwide
federation of National Standards Bodiesmember bodies. International standards are
drafted in accordance with rules given in
International
Organization
for
Standardization/ International Electrotech
Commission Directive. This international
standards are used to assess the industry
ability to meet customer regulatory and the
organisations own requrement by issuing
certificates to industries.

 The design and implementation
of an industrys quality management
system ISO 9002-1994 influenced by
varying needs particular objectives, the
products provided, the process employed
and the size and structure of the industry.
The quality system standards provides
necessary requirement i.e. (1) General
requirements,
(2)
documentation
requirement (3) quality movement (4)
control of documents (5) control of records
etc.

 General requrement- The industry
shall:-

 a) identify the processes needed
for the quality system management and
their application throughout the industry.

 b) determine the sequence and
interaction of these processes.

 c) determine and methods needed
to ensure that both the operation and
control of there processes are effective.

 d) ensure the availability of
resources and information necessary to
support the operation and monitoring of
these processes.

 e) monitor, measure and analysis
these processes, and

 f) implement actions necessary to
achieve planned results and continual
improvement of these processes.

 These processes shall be managed
by the industry in accordance with the
requirements of the international standard
i.e. ISO 9002:1994.

 (Note:
Processes
referred
to
above include process for management
activities provision of resource, product
realization and measurement).

 The
top
management
shall
provide evidence of its commitment to the
development and implementation of the
quality
management
system
and
continually improving its effectiveness by

 a)
communicating
to
the
organization and importance of meeting
customer
as
well
as
statutory
and
regulatory requirements,

 b) establishing the quality policy,
11 All. M/S Century Laminating Comp. Ltd. Vs. Assessing Authority U.P. Pollution Control Board
 & Anr.
939
 c) ensuring that quality objectives
are established,

 d)
conducting
management
reviews, and

 e) ensuring the availability of
resources.

 The petitioner's industry has very
keen sense for quality management system.
The
petitioner's
industry
therefore,
determined and started to collect and
appropriate
data
to
demonstrate
the
suitability and effectiveness of the quality
management system in the year 1996.
Petitioner's industry confirmed the above
mentioned requirements and achieved the
quality policy, quality objectives, audit
results, analysis of data, corrective and
preventive actions and management review.

 On August 2, 2000 petitioner's
industry very intensely achieved certificate
for "ISO 14001: 1996" for environmental
management system (hereinafter referred to
as 'EMS') that includes organizational
structures,
planning
activities,
responsibilities
practices
procedures,
processes and resources for developing,
implementing achieving, reviewing and
maintaining the environmental policy. The
ISO:
14001:
1996
established
audit
procedure that provide for planning and
conduct of an audit of an environmental
system to determine conformance with
EMS audit criteria.

 Environmental
Management
System audit denounces systematic and
documented
verification
process
of
objectively obtained and evaluating audit
evidence
to
determine
whether
an
industrys
EMS
audit
criteria
and
communicating the results of this process
to the client. The audit objective of
environmental management system is to
determine
proper
implementation
and
maintenance of auditee, which starts from
review
of
the
auditee
industrys
documentation
such
as
environmental
policy statements, programme, records of
manuals for meeting its EMIS requirements
and got completed once (whever) all
activities defined in the audit plan have
been concluded. This is the 'stage' when
certificate is awarded.

 In view of the above, it is clear
that petitioners industry demonstrated
validation
of
its
environmental
responsibility. This validation confers it to
be 'eligible' to what it claims, submits and
reiterates. 'Laminating' was defined in the
case of Liberty Machinery Co. V.T.M.
Mech. & Tool Corpn., D.C.N.Y. (-73 F.
Supp.663, 664). It means "bringing two
strips into permanent union so that the final
product will be in affect an integral article.

 In case of A.P. Board for Water
Pollution Control Versus A.P. Rayons Ltd.
(1989)/ SCC 44), 'Chemical' of the
Schedule-1 of Cess Act was examined and
was interpreted as given below:

 "CHEMICAL"-
Water
(Prevention and Control of Pollution) Cess
Act, 1977 Ss 2(c), 3 and Schedule-I.

 Chemical
process
would
be
involved to a certiain extent, more or less in
all industries, but an industry should be
known as a chemical industry, if it carries
out predominantly chemical endeavours,
looked from the circuitous method every
industry would be chemical industry. It
could not have been the intention to include
all industries. Such expression should,
therefore, be construed reasonably, strictly
940 INDIAN LAW REPORTS ALLAHABAD SERIES
and from a common sense point of view, so
construed and having regard to the
dictionary meaning of the word 'chemical';
the rayon grade pulp cannot be considered
even remotely connected as such with
chemical industry or textile industry or
proper industry."

 Respondent
no.1
continued
assessment of whole industry by issuing
assessment
order
dated
24/31.8.1999,
30/6.7.2000 and 28.3.2001 for the period
1.1.1993
to
30.9.1998,
1.10.1998
to
31.3.2000 and 1.4.2000 to 31.12.2000
respectively.

 The petitioner's industry was
aggrieved by the aforesaid three nonspeaking
assessment
orders,
hence
petitioner challenged these orders by filing
appeals no.24/1999, 38/2000, 11/2001
respectively on the ground that the
assessments were made on the basis of
extraneous materials unknown to assessee
and
without
providing
the
proper
opportunity to the petitioner to present his
case with regard to quantum, categorisation
and purposes of water consumption. The
respondent no.1 filed objection to appeals
which were replied by the petitioner
industry.

 On 9.3.2004, assessment order
was passed which is bearing the figures of
previous assessment orders passed on
higher side.

4.
Learned
counsel
for
the
petitioner submitted that the petitioners
industry
is
a
decorative
laminates
manufacturing unit and uses Kraft paper,
waste
paper,
phenol,
card
phenol
Melamine, Formalin as raw material and is
not covered under item no.9 and 11 of
Schedule-I of the Cess Act, 1977 because
craft paper waste is not covered under
paper industry. He next submitted that the
assessing authority never disclosed the
category on the basis of which the
assessment has been made.

5.
Learned
counsel
for
the
petitioner next submitted that water meters
as well as the Effluent Treatment Plant are
installed in the industry since the year of
establishment of the petitioner's industry
and consent under the Water (Prevention
and Control of Pollution) Act, 1974 has
also been granted by the respondent Board
for the years 1997 and 1998.

6.
Learned
counsel
for
the
petitioner
next
submitted
that
the
petitioner's industry has been wrongly
assessed under Section 3(2A) of the Cess
Act, 1977 while it should be assessed under
sub-section 3(2) of the said Act as unit is
complying with the provisions of Water
Act and E.P. Act.

7.
Learned
counsel
for
the
petitioner
next
submitted
that
the
petitioner's industry is entitled to rebate
under Section 7 of the Act and the
petitioner's industry has obtained the ISO
14001 certificate in the year 1996.

8.
Learned
counsel
for
the
petitioner next submitted that petitioner's
industry is continuing in production of
same decorative laminates sheets i.e.
Sunmica, prayer of the instant writ petition
i.e. non-coverage of petitioner industry has
already been decided. In view of this,
orders as contained in Annexure nos.1 to 6,
17 and 18 of the instant writ petition are
without jurisdiction and non-est.

9.
Learned
counsel
for
the
petitioner next submitted that feeling
11 All. M/S Century Laminating Comp. Ltd. Vs. Assessing Authority U.P. Pollution Control Board
 & Anr.
941
aggrieved by the imposition and realization
of cess under the provisions of Water
(Prevention and Control of Pollution) Cess
Act, 1977 petitioners industry filed Writ
Petition No.2865 (M/B) of 1995 before this
Court which was allowed with a direction
that the amount of cess deposited by the
petitioner shall be released and shall be
refuned to the petitioner within a maximum
period of two months.

10. In support of this submissions,
learned counsel for the petitioner relied
upon a judgment rendered in the case of
M/s Saraswati Sugar Mills reported in
(1992)1 SCC 418 and A.P. Rayons Ltd.
Case reported in (1989)1 SSC 44.

11. Per contra, learned counsel for
the
respondents
submitted
that
the
petitioner's industry is undoubtedly covered
under item no.9 of schedule-I of the Cess
Act, 1977 as "chemical industry" as
chemicals like malamine formalin resin and
phenolic resin are manufactured in the unit
and are used in manfacture of laminates
which apparently is hazardous in nature and
therefore, the assessment has been made
treating this industry as a chemical industry.

12.
Learned
counsel
for
the
respondent
next
submitted
that
the
parameters of effluent are beyond the
standards laid down by the respondentBoard.

13.
Learned
counsel
for
the
respondents next submitted that no rebate is
admissible to the petitioner in absence of
regular requests accompanied by the
compliance of the provisions of the
Pollution Control Acts.

14.
Learned
counsel
for
the
respondents
next
submitted
that
the
industry produces decorative laminates by
using chemical process and only thereafter
the finish product is produced by the
company which is called Sunmica hence
very well covered under the Schedule-I and
liable to pay cess.

15.
Having
heard
the
rival
submissions of learned counsel for the
parties, I have perused the material on
record as well as case-laws cited by learned
counsel for the petitioner.

16. To resolve the controversy
involved in the present writ petition,
operative portion of the judgment and order
dated 30.11.2004 passed by a Division
Bench of this Court is extracted here-inbelow:

 "Thus, by use of raw material a
completely different and a new product
manufactured
which
is
known
as
Decorative Laminated Sheet. Schedule-I of
the Act does not specify the industry of
Decorative
Laminates
manufacturing.
Simply because some paper is used as raw
material or phenol, card phenol, melamine
and formalin are used, it does not mean
that the petitioner industry would be a
paper industry.

 Cess Act, a fiscal statute has to
take into account the literal meaning of the
word 'industry' as used in the Act for which
aid and assistance can be taken from the
language used in common parlance in
trade/ commercial activities for applying
the provision of the Cess Act. The industry
must fall within the specified industries
enumerated in Schedule-I. In view of the
law laid down by the Apex Court in the
case referred to above it is clear that
simply on the basis of raw material used,
the
nature
of
industry
cannot
be
942 INDIAN LAW REPORTS ALLAHABAD SERIES
determined. The process of manufacturing,
ingredients used and the ultimate product,
which is manufactured would determine the
nature of industry. The petitioner who
manufctures Decorative Liminate Sheets,
commonly known as Sunmica, cannot be
subjected to any cess under the Cess Act as
the said industry does not find any mention
in Schedule-I, nor the ultimate product viz.
sunmica, can be termed or classified as
'Paper'.

 As a consequence of the findings
recorded above, we hold that there was no
authority or jurisdiction to impose any cess
under the Act on the petitioner's industry
and therefore, the assessment made is
totally without jurisdiction and is liable to
be quashed.

 Accordingly,
the
petition
is
allowed and the impugned order of
assessment
is
hereby
quashed.
The
rejection of the appeal being barred by
limitation would not come in the way of the
petitioner in challenging the very levy of
cess and its relisation, the same being not
supported by any law and the Cess Act,
being not applicable to their industry. A
further direction is hereby issued that the
amount of cess deposited by the petitioner
shall be released and shall be refunded to
the petitioner within a maximum period of
two months from the date a certified copy
of this order is produced before the
authority concerned."

17. Perusal of the above-extracted
order reveals that the question before the
Court
that
whether
the
petitioner's
decorative laminates manufacturing unit,
using Kraft paper/ waster paper as a raw
material, falls under the scope of "Chemical
Industry" as specified in Item No.7 of
Schedule I of the Cess Act, 1977 was
considered and after considering, observed
that the petitioner's industry does not fall
within the ambit of Chemical Industry
as specified in Item No. 7 of Schedule I of
the Cess Act, 1977 because although the
industry was engaged in the manufacturing
of
decorative
laminating
sheets
(
SENMICA) which to some extent is a
chemical endeavour but not to the extent
that the industry as a whole be regarded as
a " Chemical Industry" for the purpose of
imposition of cess. Moreover the end
product of the petitioner industry .i.e.,
SENMICA is not a chemical substance but
a finished,composite product.

18. Once the question aforesaid has
already been decided by a Division Bench
of this Court, there is no need to decide the
same question as decided vide judgment
and order dated 30.11.2004.

19.
Learned
counsel
for
the
petitioner relied upon judgment rendered in
the case of A.P. Board for Water
Pollution
Control
(supra),
operative
portion of which is extracted here-inbelow:

 "8. In this case where the
question is whether a particular industry is
an industry as covered in Schedule I of the
Act, it has to be judged normally by what
that industry produces mainly. Every
industry carries out multifarious activities
to
reach
its
goal
through
various
multifarious methods. Whether a particular
industry falls within the realm of taxation,
must be judged by the predominant purpose
and process and not by any ancillary or
incidental process carried on by a
particular industry in running its business.

 9. Chemical process would be
involved to a certain extent, more or less in
11 All. M/S Century Laminating Comp. Ltd. Vs. Assessing Authority U.P. Pollution Control Board
 & Anr.
943
all industries, but an industry would be
known as a chemical industry if it carries
out predominantly chemical activities and
is involved in chemical endeavours.

 The expression 'chemical' means,
according to Collins English Dictionary,
any substance used in or resulting from a
reaction involving changes to atoms or
molecules or used in chemistry. The
Concise Oxford Dictionary, 6th Edn., p.
170 defines chemical as made by, or
relating to, chemistry."

20.
Learned
counsel
for
the
petitioner
also
relied
upon
another
judgment rendered in the case of Saraswati
Sugar Mills (supra) to say that an industry
will be a "specified industry" only if the
industry producing the final product falls
squarely within an entry in Schedule I.
Relevant portion of the judgment is
extracted here-in-law:

 "21. Construction of words and
the meaning to be given for such words
shall normally depend on the nature, scope
and purpose of the statute in which it is
occurring and to the fitness of the matter to
the statute. The meaning given to the same
word occurring in a social security
measure or a regulating enactment may not
be apposite or appropriate when the same
word is interpreted with reference to a
taxing statute. The Cess Act is a fiscal
enactment. In the context in which the word
vegetable
is
used
in
Entry
15
vegetable product means product of or
made of or out of vegetable. Vegetables
as understood in common parlance are not
products of manufacture unless we say that
agriculture is an industry for certain
purposes and vegetables are products of
that industry. In order to bring an industry
within any of the entries in Schedule I it has
to be seen what is the end product
produced by that industry. Sugarcane is not
a
vegetable
though
it
may
be
an
agricultural
product.
If
the
botanic
meaning of vegetable as referring to any
and every kind of plant life is to be given
then some of the industries listed in
Schedule I like paper industry and textile
industry and even chemical industry which
are covered by other entries could also be
brought within Entry 15. The word
vegetable in the context does not attract the
botanic meaning. The sugar manufacturing
industry does not, therefore, come within
Entry 15 of Schedule I of the Cess Act."

21.
Perusal
of
the
aforesaid
judgments reveals that whether a particular
industry falls within the realm of taxation,
must be judged by the predominant purpose
and process and not by any ancillary or
incidental process carried on by a particular
industry in running its business. Chemical
process would be involved to a certain
extent, more or less in all industries, but an
industry would be known as a chemical
industry if it carries out predominantly
chemical activities and is involved in
chemical endeavours.

22.
Use
of
raw
material
a
completely different and a new product
manufactured which is lnow as Decorative
Laminated Sheet. Schedule-I of the Act
does not specify the industry of Decorative
Laminates manufacturing. Simply because
some paper is used as raw or phenol, card
phenol, melamine and formalin are used, it
does not mean that the petitioner's industry
would be a paper industry or chemical
industry.

23. Cess Act, a fiscal statute has to
take into account the literal meaning of the
word 'industry' as used in the Act for which
944 INDIAN LAW REPORTS ALLAHABAD SERIES
aid and assistance can be taken from the
language used in common parlance in
trade/ commercial activities for applying
the provision of the Cess Act. The industry
must fall within the specified industries
enumerated in Schedule-I. In view of the
law laid down by the Apex Court in the
case referred to above it is clear that simply
on the basis of raw material used, the
nature of industry cannot be determined.
The process of manufacturing, ingredients
used and the ultimate product, which is
manufactured would determined the nature
of
industry.
The
petitioner
who
manufactures Decorative Liminate Sheets,
commonly known as Sunmica, cannot be
subjected to any cess under the Cess Act as
the said industry does not find any mention
in Schedule-I, nor the ultimate product viz.
sunmica, can be termed or classified as
'Paper'.

24. As a consequence of the
findings recorded above, we hold that there
was no authority or jurisdiction to impose
any cess under the Act on the petitioners
industry and therefore, the assessment
made is totally without jurisdiction and is
liable to be quashed.

25. In this case where the question is
whether a particular industry is an industry as
covered in Schedule I of the Act, it has to be
judged normally by what that industry
produces mainly. Every industry carries out
multifarious activities to reach its goal through
various multifarious methods. Whether a
particular industry falls within the realm of
taxation, must be judged by the predominant
purpose and process and not by any ancillary
or incidental process carried on by a particular
industry in running its business.

26. Chemical process would be
involved to a certain extent, more or less in
all industries, but an industry would be
known as a chemical industry if it carries
out predominantly chemical activities and
is involved in chemical endeavours. The
expression "chemical" means, according to
Collins English Dicionary, any substance
used in or resulting from a reaction
involving changes to atoms or molecules or
used in chemistry. The Concise Oxford
Dictionary, 6th Edn. p. 170 defines
"chemical" as made by, or relating to
chemistry.

27. Construction of words and the
meaning to be given for such words shall
normally depend on the nature, scope and
purpose of the statute in which it is
occurring and to the fitness of the matter to
the statute. The meaning given to the same
word occurring in a social security measure
or a regulating enactment may not be
apposite or appropriate when the same
word is interpreted with reference to a
taxing statute.

28. The Cess Act is a fiscal
enactment. In the context in which the
word 'vegetable' is used in Entry 15
'vegetable product' means product of or
made of or out of vegetable. 'Vegetables' as
understood in common parlance are not
products of manufacture unless we say that
agriculture is an industry for certain
purposes. If the botanic meaning meaning
of vegetable as referring to any and every
kind of plant life is to be given then some
of the industries listed in Schedule I like
paper industry and textile industry and even
chemical industry which are covered by
other entries could also be brought within
Entry 15. The word vegetable in the
context does not attract the botanic
meaning. The suger manufacturing industry
does not, therefore, come within Entry 15
of
Schedule
I
of
the
Cess
Act.
11 All. Nanhu & Ors. Vs. Raksha Ram & Ors.
945
29. It also shows that in order to
bring an industry within any of the entries
in Schedule I it has to be seen what is the
end product produced by that Industry.

 In
the
case
in
hands,
the
petitioner's industry is engaged in the
manufacturing of decorative laminating
sheets ( SENMICA) which to some extent
is a chemical endeavour but not to the
extent that the industry as a whole be
regarded as a " Chemical Industry" for the
purpose of imposition of cess. Moreover
the end product of the petitioner industry
.i.e.,
SENMICA
is
not
a
chemical
substance but a finished,composite product.
The declaration of the petitioners industry
as 'not chemical industry' was made by a
Division Bench of this Court vide judgment
and order dated 30.11.2004.

30. Considering in totalities of facts
and circumstances of the present case, order
dated 22.4.2002 (contained in Annexure
No.1) along with assessment orders dated
17.8.2002, 127.8.2002, 25.7.2002, 29.8.2002,
17.11.2003,
9.3.20024
(contained
in
Annexure Nos.1 to 6, 17, 18) are hereby
quashed. A further direction is hereby issued
that the amount of cess deposited by the
petitioner shall be released and shall be
refunded to the petitioner within a maximum
period of two months from the date a
certified copy of this order is produced before
the authority concerned.

31. In result, the writ petition
succeeds and is allowed.

32. Needless to say that cess in
respect of water consumed by petitioner's
industry in 'Formaline Plant' on the basis of
returns shall be levied in accordance with
law, especially under Section 3(2A) and
3(2) of the Cess Act, 1977.
----------
(2025) 11 ILRA 945
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 12.11.2025

BEFORE

THE HON'BLE JASPREET SINGH, J.

Writ - C No. 1002672 of 2001

Nanhu & Ors. ...Petitioners
Versus
Raksha Ram & Ors. ...Respondents

Counsel for the Petitioners:
S.K. Mehrotra, I.D. Shukla

Counsel for the Respondents:
C.S.C., Alka Verma, Deepak Chandra Jain,
Q.M. Haque, Tanay Hazari, Vijai Bahadur
Verma

Issue for Consideration
Matter pertains to the scope and limits of the
jurisdiction of the Registrar under Ss. 73 and 75
of the Registration Act, 1908, particularly
"where the execution of a sale-deed is denied
by the executant", and whether the Registrar
can direct registration in a summary proceeding
when serious disputes regarding execution and
title subsist.

Headnotes
Registration Act, 1908 - Ss. 71, 73, 74 &
75 - Scope of Registrar's powers - Denial
of execution - Effect - Registrar cannot
direct registration when execution itself is
disputed - Quasi-judicial authority - Limits
- Execution distinguished from mere
signing - Admission of signature not
equivalent to execution
- Registrar's
enquiry under Section 74 - Quasi-judicial,
summary in nature - Not substitute for
civil trial - Civil remedies already invoked
and dismissed for want of prosecution -
Indirect relief impermissible - Effect on
summary registration proceedings - Writ
jurisdiction - Challenge to order directing
registration - Order directing registration