# M/s Geep Industrial Syndicate Ltd v. The Cess Officer, U.P. and others

- **Citation:** (2004) 1 ILRA 249
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2004-03-03
- **Case number:** Civil Misc. Writ Petition No. 1898 of 1982
- **Bench:** V.M. Sahai, Krishna Murari
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-geep-industrial-syndicate-ltd-v-the-cess-officer-u-p-and-others-40334
- **Pages:** 5

## Headnote

Sri Dr. H.N. Tripathi
Sri S.L. Srivastava, S.S.C.
S.C.

Water
(Prevention
and
Control
of
Pollution) Cess Act, 1977-Schedule IApplicability- Liability to pay water cessPetitioner producing torches, batteries
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250 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
(dry cells) and miniature lamps, which
come under electrical or light electrical
industry-electrical
industry
not
mentioned
in
schedule
I-Held,
petitioner's is not covered under Act
hence not liable to pay any cess- on
water consumed by it.

Held: Paras 6 & 7

On the basis of the aforesaid decisions of
the apex court it is clear that it is not the
raw material or the ingredients used by
an
industry
in
the
manufacturing
process, but it is the final product that is
relevant for the purpose of tax under the
Act.
In
common
parlance
torch
is
considered to be a source of light and
not a metal. The petitioner is producing
torches,
batteries
(dry
cells)
and
miniature lamps which come under the
electrical or light electrical industry but
electrical industry does not find mention
in
Schedule
I.
Since
the
electrical
industry has not been mentioned in
Schedule I, the petitioner's industry is
not covered by the Act and is not liable
to pay any cess on the water consumed
by it.

The
petitioner
also
manufactures
batteries (dry cells) by using chemicals
as raw material but entirely a different
commodity
is
produced
which
in
common parlance is known as battery
and not chemical, therefore, it is not
covered in Schedule I of the Act. We
hold that it is not the raw material or
ingredients used by the industry that
would determine the nature of industry.
It is the end product as understood in
common parlance that would be the
decisive
factor
in
coming
to
the
conclusion about the nature of industry.
The
products
manufactured
by
the
petitioner industry would fall in light
electrical industry and would not fall in
Schedule I of the Act. The petitioner is
not liable to pay any cess on the water
consumed by it.
Case law discussed:
1947 ALJ 41
(2000) 9 SCC 68
AIR 1992 SC 224

## Text

1 All] M/s Geep Industrial Syndicate Ltd. V. The Cess Officer, U.P. and others 249
Development) Act 1957. In view of this
decision, the petitioner cannot claim any
preferential right to get a mining lease.
Rule 6-A of the Rules no doubt provides
for renewal of a mining lease but the
effect of renewal of a mining lease which
had been granted on preferential basis
would be that a right acquired under Rule
9-A on preferential basis would be
perpetuated or get a fresh lease of life for
a further period of 3 years. The copy of
the order passed by the District Officer on
1.10.2001 shows that the renewal had
been granted on the same terms and
conditions on which the original lease
had been granted and in addition some
other conditions of minor nature has been
imposed. The effect of the renewal would
be that the mining are would continue to
be operated by a person on the basis of ka
preferential right as provided under Rule
9-A of the Rules has disappeared after the
decision of the Full Bench on 27.3.2001
when the said provision was declined to
be ultra vires. Therefore, any one who
had got a mining lease on preferential
basis under Rule 9-A of the Rules cannot
claim renewal of his lease under Rule 6-A
after the decision of the Full Bench."

10. A perusal of the counter affidavit
filed by Ganga Dayal, respondent no. 4
will show that he claimed his renewal
only on the basis of the order of status-
quo of the Apex Court, whereas the
Division Bench in the case of Katwaru
(Supra) has clearly clarified the position
and as such the contesting respondent has
no right to continue the lease on the basis
of order dated 25.4.2001. The order has
not been defended by the Standing
Counsel in his counter affidavit. The only
stand taken in paragraph 2 of the counter
affidavit is relating to the Government
orders dated 30.3.2001/4.4.2001 whereby
all the District Magistrates were stopped
from granting mining lease.

11. The provisions of Rule 9 and
Rule 23 of the Rules of 1963 are still
available to the State Government to grant
mining lease as and when it is necessary.
In the circumstances, the orders dated
25.4.2001 and the renewal of the lease on
the basis of Government Circular dated
13.6.2001 in favour of such persons who
were granted mining lease on preferential
basis under Rule 9-A are quashed. The
writ petition is allowed. There shall be no
order as to cost.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 3.3.2004

BEFORE
THE HON'BLE V.M. SAHAI, J.
THE HON'BLE KRISHNA MURARI, J.

Civil Misc. Writ Petition No. 1898 of 1982

M/s Geep Industrial Syndicate Ltd.

 ...Petitioner
Versus
The Cess Officer, U.P. and others

...Respondents

Counsel for the Petitioner:
Sri S.P. Gupta
Sri Vijai Ratan Agarwal
Sri Vevek Ratan
Sri N. Lal

Counsel for the Respondents:
Sri Dr. H.N. Tripathi
Sri S.L. Srivastava, S.S.C.
S.C.

Water
(Prevention
and
Control
of
Pollution) Cess Act, 1977-Schedule IApplicability- Liability to pay water cessPetitioner producing torches, batteries
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250 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
(dry cells) and miniature lamps, which
come under electrical or light electrical
industry-electrical
industry
not
mentioned
in
schedule
I-Held,
petitioner's is not covered under Act
hence not liable to pay any cess- on
water consumed by it.

Held: Paras 6 & 7

On the basis of the aforesaid decisions of
the apex court it is clear that it is not the
raw material or the ingredients used by
an
industry
in
the
manufacturing
process, but it is the final product that is
relevant for the purpose of tax under the
Act.
In
common
parlance
torch
is
considered to be a source of light and
not a metal. The petitioner is producing
torches,
batteries
(dry
cells)
and
miniature lamps which come under the
electrical or light electrical industry but
electrical industry does not find mention
in
Schedule
I.
Since
the
electrical
industry has not been mentioned in
Schedule I, the petitioner's industry is
not covered by the Act and is not liable
to pay any cess on the water consumed
by it.

The
petitioner
also
manufactures
batteries (dry cells) by using chemicals
as raw material but entirely a different
commodity
is
produced
which
in
common parlance is known as battery
and not chemical, therefore, it is not
covered in Schedule I of the Act. We
hold that it is not the raw material or
ingredients used by the industry that
would determine the nature of industry.
It is the end product as understood in
common parlance that would be the
decisive
factor
in
coming
to
the
conclusion about the nature of industry.
The
products
manufactured
by
the
petitioner industry would fall in light
electrical industry and would not fall in
Schedule I of the Act. The petitioner is
not liable to pay any cess on the water
consumed by it.
Case law discussed:
1947 ALJ 41
(2000) 9 SCC 68
AIR 1992 SC 224

(Delivered by Hon'ble V.M. Sahai, J.)

1. The petitioner is a public limited
company
carrying
on
business
of
manufacturing and marketing of batteries
(dry cells), miniature lamps and torches.
It has two industrial establishments. In
one establishment torches and miniature
lamps and in the other batteries (dry cells)
are manufactured. The petitioner received
a notice dated 27.12.1979 from the Cess
Officer to submit a return regarding
quantity of water consumed for every
calendar month with effect from 1.4.1978
and pay cess to the Board. On 5.1.1980
the petitioner submitted his reply that his
industry is not covered under Schedule I
of the Water (Prevention and Control of
Pollution) Cess Act, 1977 (in brief the
Act). The Cess Officer on 15.1.1980
wrote to the petitioner to furnish the
details of raw materials used and products
manufactured in the factory of the
petitioner. Before the petitioner could
furnish the details he received two
assessment orders passed by the Cess
Officer on 4.2.1980 in Cess No. 57/11 and
33/17 for the period April 1978 to
December, 1979. Thereafter, on 8.2.1980
the petitioner furnished details and
returned both the assessment orders with
the request to the Cess Officer that he
should
first
ascertain
whether
the
petitioner's industry is covered by the Act
or not.

2. The Cess Officer on 15.2.1980
held that the petitioner's industry was
covered under entries 1,2 and 7 of
Schedule I of the Act as it processes
ferrous
or
non-ferrous
metals
and
chemicals to manufacture its products. He
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1 All] M/s Geep Industrial Syndicate Ltd. V. The Cess Officer, U.P. and others 251
also passed two revised assessment orders
no. 96/10 and 52/17 for April, 1978 to
September, 1978 and October, 1978 to
December,
1978.

The
petitioner
challenged the order dated 15.2.1980
under section 13 of the Act before the
Appellate Committee which dismissed the
appeal on 13.11.1981 and affirmed the
order passed by the Cess Officer. Both
the
orders
dated
15.2.1980
and
13.11.1981 have been challenged by the
petitioner in this writ petition.

3. Sri Vijai Ratan Agarwal learned
senior counsel assisted by Sri Vivek
Ratan for the petitioner, urged that the
petitioner is not engaged in any of the
industries as mentioned in Schedule I of
the Act and is not liable to pay any water
cess. He further urged that in Schedule I
of
Industries
(Development
and
Regulation) Act, 1951 the petitioner's
industry is listed under the heading
'electrical equipment'. In the 'Handbook
of Indigenous Manufacturers' published
by Directorate General of Technical
Development
the
industry
of
the
petitioner has been placed under the
heading 'Light Electrical Industries'. He
urged that the petitioner's industry is not
ferrous
or
non-ferrous
metals
or
chemicals industry and no metallurgical
operation is carried on in the industry of
the
petitioner
nor
any
metal
is
manufactured. The petitioner purchases
metals from the market in whatever form
it is needed for the manufacturing of
torches. He urged that no chemical is
manufactured.
Therefore,
the
orders
passed by the Cess Officer and appellate
committee are illegal and liable to be
quashed.

4. On the other hand, Dr. H.N.
Tripathi learned counsel appearing for
respondents no.1 and 2 has urged that the
metal is purchased and is processed in the
industry of the petitioner and thereafter
torches are made by processing the metal.
Therefore, the industry of the petitioner
would be covered under Item No. 15 of
Schedule I of the Act. The petitioner also
manufactures batteries (dry cells) with
chemical
process,
therefore,
the
petitioner's industry would be covered
under entry nos. 1, 2 and 7 of Schedule I
of the Act and as such he is liable to pay
the cess on the water consumed by the
petitioner. In support of his argument he
placed reliance on the Division Bench
decision of this court in M/s Agra
Engineering Industries Artoni v. Union
of India and another, 1987 All. L. J. 41.

5. The question is whether the
petitioner's industry which processes the
metal and by giving it shape manufactures
torch cases is an industry covered under
Schedule I of the Act. In the Schedule I
the electrical industry or light electrical
industries do not find place. If the
petitioner purchases metal from the
market and gives only shape to it and
makes flashlight cases, this processing
does not change the nature of the metal
but in common parlance it would be
understood as torch or flashlight case and
not metal. The apex court in M/s
Saraswati Sugar Mills v. Haryana Sate
Board and others AIR 1992 SC 224
while considering entry no. 15 of
Schedule I of the Act, has held that in
manufacture if some thing is brought into
existence which is different from that
originally existed in the sense that the
thing
produced,
by
itself
is
a
commercially
different
commodity
whereas in the case of processing it is not
necessary to produce a commercially
different article. If the end product
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252 INDIAN LAW REPORTS ALLAHABAD SERIES [2004
produced by the industry is not mentioned
in the Schedule I, then it will not be liable
to cess tax under the Act. 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.
This decision has been followed by the
apex court in Britannia Industries Ltd.
V. T.N. Pollution Control Board and
another, (2000) 9 SCC 68 wherein the
appellant
before
the
apex
court
manufactured biscuits, bread and cakes. It
used wheat flour, milk powder, sugar and
vanaspati. The appellant's industry was
assessed to cess under entry 15 of
Schedule I. The authorities under the Act
held that the appellant used ingredients
wheat, sugar and vanaspati which were
vegetables while milk powder was an
animal product and by mixing and
processing
these
biscuits
etc.
were
manufactured. The apex court held that
wheat flour which was used by the
appellant in the manufacture of biscuits,
bread and cakes is not a vegetable
product. Wheat in common parlance, is
not understood to be a vegetable. Milk
powder can be said to be the result of
processing of an animal product, namely,
milk, but it cannot be said to be an animal
product. They are utilised as ingredients
for manufacturing altogether a different
product,
biscuit,
bread
and
cakes.
Therefore, it was held that the industry of
the appellant was not covered by
Schedule I of the Act.

6. On the basis of the aforesaid
decisions of the apex court it is clear that
it is not the raw material or the ingredients
used by an industry in the manufacturing
process, but it is the final product that is
relevant for the purpose of tax under the
Act. In common parlance torch is
considered to be a source of light and not
a metal. The petitioner is producing
torches, batteries (dry cells) and miniature
lamps which come under the electrical or
light electrical industry but electrical
industry does not find mention in
Schedule I. Since the electrical industry
has not been mentioned in Schedule I, the
petitioner's industry is not covered by the
Act and is not liable to pay any cess on
the water consumed by it.

7. In view of the aforesaid decisions
of the apex court we find that the division
Bench decision of this court in Agra
Engineering Industry (supra) is no longer
a
good
law.
The
petitioner
also
manufactures batteries (dry cells) by
using chemicals as raw material but
entirely
a
different
commodity
is
produced which in common parlance is
known as battery and not chemical,
therefore, it is not covered in Schedule I
of the Act. We hold that it is not the raw
material or ingredients used by the
industry that would determine the nature
of industry. It is the end product as
understood in common parlance that
would be the decisive factor in coming to
the conclusion about the nature of
industry. The products manufactured by
the petitioner industry would fall in light
electrical industry and would not fall in
Schedule I of the Act. The petitioner is
not liable to pay any cess on the water
consumed by it. The petitioner had
deposited cess under the interim order
dated 4.5.1982, therefore, he is entitled
for refund.

8. Since the petitioner succeeds on
the first point it is not necessary to
consider other arguments raised by the
learned counsel for the petitioner.

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1 All] Babu Ram and others V. Spl. Judge/Additional District Judge, Bijnor and others 253

9. In the result the writ petition
succeeds and is allowed. The orders
dated 15.2.1980 passed by the Cess
Officer and order dated 13.11.1981
passed by the appellate committee,
annexures- 4 and 7 respectively to the
writ petition are quashed. The petitioner
shall be entitled for refund of the amount
deposited under the interim order of this
court. The respondents shall refund the
entire amount within three months from
the date a certified copy of this order is
produced before the respondent no.1.

10. Parties shall bear their own
costs.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 11.03.2004

BEFORE
THE HON'BLE S.U. KHAN, J.

Civil Misc. Writ Petition No.38020 of 1998

Babu Ram and others
...Petitioner
Versus
Special Judge/A.D.J., Bijnor and others

 ...Respondents

Counsel for the Petitioner:
Sri N.K. Srivastava
Sri Neeraj Agrawal
Sri K.M. Dayal

Counsel for the Respondents:
Sri M.K. Gupta
S.C.

(A)
Urban
Buildings
(Regulation
of
Letting, Rent & Eviction) Act, 1972- Ss.
30 (6) and 20 (4)- Suit by landlord for
ejectment and arrears of rent on ground
of default and retrial alteration-After
refusal of money order by landlord the
tenant was not in arrears of rent-Hence
entitled to deposit under S. 30-Deposit
of rent by tenant under S. 30 on
19.9.1991 and 3.1.1992-Even though
ejectment suit was filed on 29.8.1991,
tenant was not aware of same-Hence
said deposits amount to payment of rent
to landlord under S. 30 (6)-Tenant not
held defaulter-Not required to deposit
same again under S. 20 (4).

(B) U.P. Urban Building (Regulation of
Letting Rent & Eviction) Act S-20 (2)(c)-
Secondly, contractions by erecting angle
irons and concrete pillars admitted by
tenant-Also
construction
by
placing
finished on pillars amount to statural
alteration within S. 20 (2) (c)- Finding
that said constructions blocker the shop
in question and disfigured the sameHence suit by landlord-Liable to be
decreed.

Held: Para 8,9 & 12

In
view
of
the
above
Full
bench
pronouncement after the refusal of
money order by landlord on 23.8.1991
rent was in arrears but the tenant was
not in arrears of rent.

The matter may be looked from another
angle also. Rent sent through money
order was refused by the landlord on
23.8.1991 hence tenant was entitled to
deposit the same under Section 30. The
tenant deposited the rent under Section
30 on 19.9.1991 and 3.1.1992. Even
though suit for ejectment had been filed
prior to 19.9.1991 (i.e. on 29.8.1991)
however, tenant was not aware of the
filing
of
suit
for
ejectment
hence
deposits made by him under Section 30
on 19.9.1991 and 3.1.1992 amount to
payment to the landlord under section
30(6) of the Act. The tenant was not
therefore a defaulter regarding that rent
and not required to deposit the same
again under Section 20(4) of the Act.

The tenant admitted and the courts
below found that tenant had made some
constructions by erecting iron angles and
concrete pillars. The trial court has also
recorded a finding that the tenant on the
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