# M/s The Kisan Sahkari Chini Mills Ltd., Budaun v. The Commissioner of Sales Tax

- **Citation:** (2001) 1 ILRA 226
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2000-12-01
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-the-kisan-sahkari-chini-mills-ltd-budaun-v-the-commissioner-of-sales-tax-39704
- **Pages:** 11

## Text

INDIAN LAW REPORTS ALLAHABAD SERIES [2001
226
for deciding to pay salary to the validly
appointed staff of the Petitioner College.

10. In view of the above, the
Respondents
are
being
jointly
and
severely directed to ensure payment of
salary to the validly appointed staff of the
Petitioner's
College
inasmuch
as
promotion to upgrade the College cannot
be justified. The concerned authorities are
directed to pay to the validly appointed
teaching and non-teaching staff of the
College with effect from March 2000
within a period of two months to be
computed from the date of filing of a
certified copy of this judgement before
the concerned authority. The Respondents
and all other authorities are further
directed to make payment to the validly
appointed teaching and non teaching staff
of the petitioner's college regularly month
by month with effect from 01st December
2000
in
accordance
with
law
as
contemplated under U.P. Junior High
School (Payment of Salaries of the
Teachers and other Employees) Act, 1978
(U.P. Act 6 of 1979) till College is
brought on grant-in-aid list under U.P.
Intermediate Education Act read with
payment of Salaries Act, 1971.

Writ Petition is allowed accordingly.

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1All] M/s The Kisan Sahkari Chini Mills Ltd., Budaun V. The Commissioner of Sales Tax 227
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By the Court

1. The Kisan Sahkari Chini Mills
Ltd. Budaun has filed the present revision
against the order dated 16.3.1991 passed
by the Sales Tax Tribunal, Haldwani
Bench, Haldwani, in Second Appeal No.
621 of 1990 (Assessment Year 1986-87)).

2. The facts of the case in brief are
that the applicant is a registered dealer
under the provisions of the Central Sales
Tax Act, 1956 (hereinafter referred to as
the Act) and is engaged in the business of
manufacture and sale of sugar, bye
product and its waste products etc. It had
applied for grant of registration certificate
in respect of various items including steel,
cement and paints, which were to be used
by the applicant in the manufacture of
sugar and other products. The assessing
authority vide order dated 7.12.1987
disallowed the registration in respect of
steel, cement and paints. The applicant
preferred an appeal under section 9 of the
Act before the Assistant Commissioner
(Judicial), Sales Tax, Haldwani, who vide
order dated 15.9.89 had rejected the
appeal.
3. Feeling aggrieved by the said
order, the applicant preferred an appeal
under section 10 of the Act before the
Tribunal, which too has been dismissed
by the Tribunal by the impugned order.

4. I have heard Sri Rajesh Kumar,
learned counsel for the applicant and Sri
S.D. Singh, learned Standing Counsel
appearing on behalf of respondent.

5. The learned Counsel for the
applicant submitted that cement was
required by the applicant for fixing the
machinery, whereas steel was required for
use in the boiler and paints were required
for the protection of the machinery. He
submitted that all the aforesaid three items
are connected with the manufacturing.
According to the learned counsel for the
applicant, the Tribunal had accepted that
all the three items play some role in the
manufacturing but did not allow the
benefit on the ground that they are not
directly
used
in
the
manufacturing
process. He submitted that the benefit of
section 8-A of the Central Sales Tax Act,
is not confined to those items, which are
directly required for the manufacturing,
but the benefit is also available to those
goods
which
are
required
for
the
manufacturing purposes play some role.
He submitted that under Rule 13 of the
Central Sales Tax (Registration and
Turnover)
Rules
1957
(hereinafter
referred to as the Rules) stores is also
included, and, therefore, the aforesaid
three items being stores is liable to be
included in the list of goods, which the
applicant can purchase against declaration
Form-C.

6. Sri S.D. Singh, learned standing
counsel on the other hand submitted that
by no stretch of imagination, steel, cement
INDIAN LAW REPORTS ALLAHABAD SERIES [2001
228
and paints can be said to be goods, which
are used in the manufacture of sugar and,
therefore,
they
have
rightly
been
disallowed.

7. For appreciation of the rival
contention raised by the learned counsel
for the parties, it is necessary to reproduce
Section 7 (1),8(1),8(3) (b)j of the Act and
Rule 13 of the Rules which read as
follows:

"7. Registration of dealer

(I) Every dealer liable to pay tax under
this Act shall, within such time as may be
prescribed for the purpose, make an
application for registration under this Act
to such authority in the appropriate State
as the Central Government may by
general or special order, specify, and
every such application shall contain such
particulars as may, be prescribed.

8. Rates of tax on sales in the course
of inter-State trade or commerce:-

(1) Every dealer, who in the course of
inter-State trade or Commerce-
a]
sells to the Government any goods,
or
b]
sells to a registered dealer other than
the Government goods of the description
referred to in sub-section(3),
(2)
(2A)
[3] The goods referred to in clause (b) of
sub-section (1)-

(a) Omitted,
(b)....are goods of the class or
classes specified in the certificate of
registration
of
the
registered
dealer
purchasing the goods as being intended
for resale by him or subject to any rules
made by ;the Central Government in this
behalf, for use by him in the manufacture
or processing of goods for sale or in
mining or in the generation or distribution
of electricity or any other form of power.

Rule 13

The goods referred to in clause (b) of
sub-section (3)j of section 8 which a
registered dealer may purchase, shall be
goods intended for use by him as raw
materials, machinery, plant, equipment,
tools stores, spare parts, accessories, fuel,
or lubricants, in the manufacture or
processing of goods for sale, or in mining,
or in the generation or distribution of
electricity or any other form of ;power..'

8. On a conjoint reading of the
aforesaid provisions, it will be seen that
the goods specified in the certificate of
registration is to be used by the person in
the manufacture or processing of goods
for sale. Admittedly, all the items in
question viz. Steel, cement and paint
cannot be included in the description of
raw-materials,
processing
materials,
machinery, plant, tools, spare parts,
accessories,
fuel
or
lubricants
as
mentioned in Rule 13 of the Rules.

9. Learned counsel for the applicant
contended that they would fall under the
description of the word 'Stores' as
mentioned in Rule 13. In support of his
aforesaid plea he relied on the following
decisions of the Hon'ble Supreme Court:

[1] India Copper Corporation Ltd. v.
Commissioner of Commercial Taxes,
Bihar and others, reported in (1965) Vol.
16 STC-259 (SC).
1All] M/s The Kisan Sahkari Chini Mills Ltd., Budaun V. The Commissioner of Sales Tax 229
[2] J.K. Cotton Spinning and Weaving
Mills Ltd. v. Sales Tax Officer, Kanpur
and another, reported in (1965)k 16 STC563 (SC).

[3] Collector of Central Excise Eastend
Paper Industries Ltd. reported in 1989
(43) Excise Law Times-201 (SC),

[4] Collector of Central Excise, New
Delhi v. M/s Balarpur Industries Ltd. ,
reportedf in 1990 UPTC-157 (SC).

Sri S.D. Singh, learned standing
counsel has relied upon the following
decisions:

(1) Ballarpur straw Board Mills Ltd. (now
known as Balapur- Industries Ltd.) v.
State of Karnataka reported in (1978) Vol.
42 STC-401 (Karnataka);

(2) M/s Sivalik Cellulose Ltd. and another
vs. State of U.P. and others, reported in
1992 UPTC-1 (Alld.);

(3) Commissioner of Sales Tax v. Rewa
Coal Fields Ltd. and another, reported in
(1995) 5 SCC- 715;

(4) Coastal Chemicals Ltd. v. Commercial
Tax Officer, A.P. and others, reported in
(2000) 117 STC- 12 (SC).

10. In the case of Indian Copper
Corporation Ltd. (supra) the Hon'ble
Supreme Court has held as follows:

"The expression "goods intended for
use in the manufacturing or processing of
goods for sale" may ordinarily include
such vehicles as are intended to be used
for removal of processed goods from the
factory to the place of storage."

At another place it has held that-

"The statutes relating to factories and
mines impose upon the owner of the
factory and the mine obligation to
maintain effective health services for the
benefit of the workmen. But it cannot on
that account be said that the goods
purchased for the hospital such as
equipment, furnishings and fittings are
intended for use in the manufacture or
processing of goods for sale or in the
mining operations. The mere fact that
there is a statutory obligation imposed
upon the owner of the factory or the mine
to maintain hospital facilities would not
supply a connection between the goods
and the manufacturing or processing of
goods or the mining operations so as to
make them goods intended for use in
those operations".

" Stationery" also is not intended for use
in the manufacture or processing of goods
for sale or for mining operations. Use of
stationery
undoubtedly
facilitates
the
carrying
on
of
a
business
of
manufacturing goods or of processing
goods or even mining operations, but the
expression "intended to be used" cannot
be equated with "likely to facilitate" the
conduct of the business of manufacturing
or of processing goods or of mining."

11. In the case of J.K. Cotton
Spinning and Weaving Co. Ltd.(supra)
the Hon'ble Supreme Court has held as
follows:

"Section 8(3) (b) authorises the Sales
Tax Officer to specify, subject to any
rules made by the Central Government,
goods intended for use by the dealer in the
manufacture or processing of goods for
sale or in mining, or in the generation or
INDIAN LAW REPORTS ALLAHABAD SERIES [2001
230
distribution of electricity or any other
form of power. By rule 13 the Central
Government has prescribed the goods
referred to in section 8(3)(b) such goods
must
be
intended
for
use
in
the
manufacture or processing of goods for
sale or in mining or generation or
distribution of power, and the intended
use of the goods must be as specified in
rule 13. It is true that under rule 13, read
with section 8(3)(b), mere intention to use
the
goods
in
the
manufacture
or
processing of goods for sale, will not be a
sufficient ground for specification: the
intention must be to use the goods as raw
materials, as processing materials, as
machinery, as plant, as equipment, as
tools, as stores, as spare parts, as
accessories, as fuel or as lubricants. A
bare survey of the diverse uses to which
the goods may be intended to be put in the
manufacture of processing of goods,
clearly
shows
that
the
restricted
interpretation placed by the High Court is
not warranted. The expression" in the
manufacture of goods" should normally
encompass the entire process carried on
by the dealer of converting raw materials
into finished goods. Where any particular
process is so integrally connected with the
ultimate production of goods that but for
that process, manufacture or processing of
goods
would
be
commercially
inexpedient,
goods
required
in
that
process would, in our judgement, fall
within the expression "in the manufacture
of goods." For instance , in the case of a
cotton textile manufacturing concern, raw
cotton undergoes various processes before
cloth is finally turned out. Cotton is
cleaned, carded, spun into yarn, then cloth
is woven, put on rolls, dyed, calendered
and pressed. All these processes would be
regarded as integrated processes and
included "in the manufacture" of cloth. It
would be difficult to regard goods used
only in the process of weaving cloth and
not goods used in the anterior processes
as goods used in the manufacture of cloth.
To
read
the
expression
"in
the
manufacture" of cloth in that restricted
sense, would raise many anomalies. Raw
cotton and machinery for weaving cotton
and even vehicles for transporting raw
and finished goods would qualify under
rule 13, but not spinning machinery,
without which the business cannot be
carried on. In our judgment, rule 13 does
not justify the importation of restrictions
which are not clearly expressed, nor
imperatively intended. Goods used as
equipment, as tools, as stores, as spare
parts, or as accessories in the manufacture
of processing of goods in mining, and in
the generation and distribution of power
used not, to qualify for special treatment
under section 8(1), be ingredients or
commodities used in the processes, nor
must they be directly and actually needed
for " turning out or the creation of goods."

In our judgement if a process or
activity is so integrally related to the
ultimate manufacture of 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 as specified in rule 13 will qualify
for special treatment. This is not to say
that
every
category
of
goods"
in
connection with" manufacture of, or "in
relation
to"
manufacture,
or
which
facilitates the conduct of the business of
manufacture will be included within rule
13. Attention in this connection may be
invited to a judgment of this Court in
which it was held that vehicles used by a
company (which mined ore and turned out
copper in carrying on activities as a miner
1All] M/s The Kisan Sahkari Chini Mills Ltd., Budaun V. The Commissioner of Sales Tax 231
and as a manufacturer) fell within rule 13,
even if the vehicles were used merely for
removing ore from the mine to the
factory, and finished goods from the
factory to the place of storage. Spare parts
and accessories required for the effective
operation of those vehicles were also held
to fall within rule 13. See: Indian Copper
Corporation Ltd. v. Commissioner of
Commercial Taxes, Bihar and others."

At
another
place
the
Hon'ble
Supreme Court has held that:

" Building materials including lime
and
cement
not
required
in
the
manufacture of tiles for sale cannot,
however, be regarded within the meaning
of rule 13, as raw materials in the
manufacture or processing of goods or
even as "plant". It is true that buildings
must be constructed for housing the
factory in which machinery is installed.
Whether a building is a "plant" within the
meaning of rule 13, is a difficult question
on which no opinion need be expressed.
But to qualify for specification under
section 8(3)(b) goods must be intended
for use of the nature mentioned in rule 13,
in the manufacture of goods. Building
materials used as raw materials for
construction of 'plant' cannot be said to
be used as plant in the manufacture of
goods. The Legislature has contemplated
that the goods to qualify under section
8(3)(b) must be intended for use as raw
materials or as plant, or as equipment in
the manufacture or processing of goods,
and it cannot be said that building
materials fall within this description. The
High Court was, therefore, right in
rejecting the claim of the company in that
behalf."

12. In the case of Eastend Paper
Industries Ltd. (supra), the Hon'ble
Supreme Court while following its earlier
decision in the case of J.K. Cotton
Spinning and Weaving Mills Co. Ltd.
(supra) had held that processes incidental
or ancillary to wrapping are to be
included in the process of manufacture,
manufacture in the sense of bringing the
goods into existence as these are known
in the market is not complete until these
are wrapped in wrapping paper. It held
wrapping paper to be the component part
of the raw-material used and consumed in
the finish products.

13. In the case of Ballarpur Straw
Board Mills Ltd. (supra), the Hon'ble
Supreme Court has held as follows:

"The
question,
in
the
ultimate
analysis, is whether the input of Sodium
Sulphate in the manufacture of papers
would cease to be "Raw-Material" by
reason alone of the fact that in the course
of the chemical reactions this ingredient is
consumed and burnt-up. The expression
"Raw-material" is not a defined term. The
meaning to be given to it is the ordinary
and well-accepted connotation in the
common parlance of those who deal with
the matter.

The ingredients used in the chemical
technology of manufacture of any endproduct might comprise, amongst others,
of those who which may retain their
dominant individual identity and character
throughout the process and also in the
end-product, those which as a result of
interaction
with
other
chemicals
or
ingredients, might themselves undergo
chemical or qualitative changes and in
such altered form find themselves in the
end-product: those which, like catalytic
INDIAN LAW REPORTS ALLAHABAD SERIES [2001
232
agents, while influencing and accelerating
the chemical reactions, however may
themselves
remain
uninfluenced
and
unaltered and remain independent of and
outside the end-products and those, as
here,
which
might
be burnt-up or
consumed in the chemical reactions. The
question in the present case is whether the
ingredients of the last mentioned class
qualify themselves as and are eligible to
be called "Raw-Material" for the endproduct. One of the valid tests, in our
opinion, could be that the ingredient
should be so essential for the chemical
processes culminating in the emergence
of the desired end-product that having
regard
to
its
importance
in
and
indispensability for the process, it could
be said that its very consumption on
burning up is its quality and value as raw
material. In such a case, the relevant test
is not its absence in the end product, but
the dependence of the end-product for its
essential presence at the delivery end of
the process. The ingredient goes into the
making of the end-product in the sense
that without its absence the presence of
the end-product, as such is rendered
impossible. This equality should coalesce
with the requirement that its utilisation is
in the manufacturing processes as distinct
from the manufacturing apparatus"

The Hon'ble Supreme Court has
further held that:

On a consideration of the matter, we
are persuaded to the view that the
Tribunal was right in its conclusion that
Sodium
Sulphate was used in the
manufacture of paper as "Raw-Material"
within the meaning of the Notification
No. 105/82-CE, dated 28.2.1982."

14. Now coming to the decisions
relied upon by the learned standing
counsel in the case of M/s Ballarpur
Straw Board Mills Ltd. (supra) the
Hon'ble Karnataka High Court after
referring to the two decisions of the
Hon'ble Supreme Court in the case of
Indian Copper Corporation Ltd. (supra)
and J.K. Cotton Spinning and Weaving
Mills Co. Ltd. (supra) had held that
timber of all kinds for using it in the
construction or maintenance of building
within the precincts of the factory, paints
and varnishes for using them in painting
the factory building and fire bricks, fire,
cement, cement compound and china clay
for using them in the construction cannot
be allowed in view of the observations of
the Hon'ble Supreme Court in the case of
J.K. Cotton Spinning and Weaving Mills
Co. Ltd.

15. In the case of Sivalik Cellulose
Ltd. (supra) this Court while following
the decision of Hon'ble Supreme Court in
the case of J.K. Cotton Spinning and
Weaving Mills Co. Ltd. has held as
follows:

"In the present case the petitioners
have mentioned in column 16 of Form -A
the disputed goods to be used for building
construction and office equipment under
the
heading
"raw
material/packing
material". In fact, such goods which are
required for the purposes of construction
or office equipment for starting or running
the business cannot by any stretch of
imagination
be
said
to
be
raw
material/packing material. Apart from
wrong declaration made in Column 16 by
the petitioners such goods cannot come
within the boundary of "goods" as
referred under Section 8(3)(b)j of the said
Act. Registration, therefore, was wrongly
1All] M/s The Kisan Sahkari Chini Mills Ltd., Budaun V. The Commissioner of Sales Tax 233
granted. Rule 13 further provides that "the
goods referred to in clause (b) of subsection (3) of Section 8 which a registered
dealer may purchase shall be goods
intended for use by him as raw material,
processing materials, machinery, plants,
equipment, tools, stores, spare parts,
accessories, fuel or lubricants in the
manufacture or processing of goods for
sale or in mining or in the generation or
distribution of electricity or any other
form of power." Admittedly, the goods
which are used for the construction of
buildings or as office equipment would
not be covered under it.

16. In the case of M/s J.K. Cotton
Spinning and Weaving Mills Co. Ltd. v.
The State Sales Tax Officer, Kanpur and
another, AIR 1965 SC-1310, it was held:

" Section 8(3)(b) authorises the Sales
Tax Officer to specify subject to any rules
made by the Central Government, goods
intended for use by the dealer in the
manufacture or processing of goods for
sale or in mining or in the generation or
distribution of electricity or any other
form of power. By Rule 13 the Central
Government has prescribed the goods
referred to in Section 8(3)(b), such goods
must
be
intended
for
use
in
the
manufacture or processing of goods for
sale or in mining or generation or
distribution of power and the intended use
of the goods must be as specified in Rule
13. It is true that under Rule 13 read with
Section 8(3)(b) mere intention to use the
goods in the manufacture or processing of
goods for sale, will not be a sufficient
ground for specification, the intention
must be to use the goods as raw materials,
as processing materials, as machinery, as
plant, as equipment, lubricants. A bare
survey of the diverse uses to which the
goods may be intended to be put in the
manufacture or processing of goods,
clearly
shows
that
the
restricted
interpretation placed by High Court is not
warranted.
The
expression
'in
the
manufacture of goods' should normally
encompass the entire process carried on
by the dealer or converting raw materials
into finished goods.

In para 11 of this judgement the
Supreme Court further held:

" Building materials including lime
and
cement
not
required
in
the
manufacture of tiles for sale cannot,
however, be regarded within the meaning
of Rule 13, as raw materials in the
manufacture or processing of goods or
even as plant ."

Similar would be the position in the
present
case,
petitioners
are
manufacturing
for
sale
writing
and
printing papers and by no stretch of
imagination building materials or even
equipment could be treated as raw
material in the manufacture or processing
of goods or even as plant in the
manufacture of writing and printing
papers."

17. In the case of Rewa Coal fields
Ltd. (supra) the Hon'ble Supreme Court
was considering the definition of word
'raw material' as given in section 2(1) of
M.P. General Sales Tax Act, and has held
as follows:

"The respondent assessee operates a
coal mine, which is a manufacturing
activity for the purposes of the said Act. It
sought registration for the purpose of
Section 8 of the Act, which deals with the
set-off or refund of tax in respect of tax
INDIAN LAW REPORTS ALLAHABAD SERIES [2001
234
paid goods in certain circumstances, of
the following on the ground that they
were raw materials consumed in the
course
of
manufacture,
covered
by
therefore-quoted
definition.
Timber,
kerosene
oil,
drilling
bits,
hewing
implements of all kinds, dry cells, torches,
cement and lime and electrical bulbs. The
Sales Tax Officer and the Commissioner
of Sales Tax declined to register these as
raw materials. The Commissioner found
that the timber was used in the mine to
prop up its walls. It was only a supporting
device and it was not consumed but
remained within the mine. It could not,
therefore, be treated as a raw material, and
it was of no consequence that it was not
salvaged by the respondent after the mine
was closed. Kerosene oil was required for
lanterns for ill umnination purposes and
not as a fuel to power any machine.
Hence, it would not be treated as a raw
material.
Drilling
bits
were
neither
instantaneously consumed nor did they
form part of the finished goods in any
manner. Hewing implements were used to
cut down large pieces of the mine walls
and surface and their life was perhaps the
longest out of the list. Dry cells, torches
and cells and electrical bulbs were used
only for illuminating the inside of the
mine. Cement and lime were used to seal
leakage's and plaster holes in the mine. It
was more in the nature of a building
material. The High Court took the
contrary view. It said the Commissioner
had interpreted the definition of raw
material too narrowly. We cannot agree,
given that the definition requires that the
raw material should be (1)-consumed (2)
in the process of manufacture."

The Hon'ble Supreme Court has
further held that:

" It seems to us clear that, drilling
bits
apart,
none
of
the
articles
aforementioned can qualify to be articles
"consumed
in
the
process
of
manufacture" or, to put it in different
way, consumed in the mining of the coal.
They may be used for purposes incidental
to the mining, but are not integral thereto.

So, far as drilling bits are concerned,
they are used to bore holes in the walls of
the mine; the holes are stuffed with
explosives and the detonation thereof
yields the coal. Their utility is quickly
exhausted. It can, therefore, be said that
they are consumed in the mining of the
coal. To that extent alone can the assessee
succeed."

18. In the case of Coastal Chemicals
Ltd. the Hon'ble Supreme Court was
considering the word 'consumables' as
mentioned in Section 5 (b) (1) of the
Andhra Pradesh General Sales Tax Act,
1957 and it has held as follows:

"The word "consumables" in the said
provision takes colour from and must be
read in the light of the words that are its
neighbours,
namely,
"raw
material',
'component part' 'sub-assembly part, and
'Intermediate part': So read it is clear that
the word 'consumables' therein refers only
to material which is utilised as an input in
the manufacturing process but is not
identifiable in the final product by reason
of the fact that it has got consumed
therein. It is for this reason that
'consumables'
have
been
expressly
referred to in the said provision, though
they would fall within the broader scope
of the words' raw material'.

In the case of 'Thomas Stephen &
Co. (1988) 69 STC-320 (SC) relied upon
1All] M/s The Kisan Sahkari Chini Mills Ltd., Budaun V. The Commissioner of Sales Tax 235
in the impugned judgement. It was held
that cashew shall used as fuel did not get
consumed in the manufacture of other
goods and that ' consumption must be in
the manufacture as raw material."

To use the words of ' Thomas
Stephen & Co. (1988)69 STC-320 (SC)
the natural gas used by the appellant does
' not tend to the making of the endproduct'. It is not a 'consumable."

19. Though, the Hon'ble Supreme
Court in the cases of Rewa Coalfields Ltd.
(supra) and Coastal Chemicals Ltd. supra,
has considered the question of raw
material and consumables respectively,
but it has held that it should be consumed
in the process of manufacture or tend to
the making of the end-product.

20. It is not the case of the applicant
that the three items mentioned above are
either raw-material or consumables. On
the other hand it is the specific case taken
by the applicant that they fall under the
description of the word 'stores'. The word
'store' has not been defined under the Act
or the Rules framed thereunder. In
Webster's
Third
New
International
Dictionary of the English Language
Unabridged, 1971 Edition, the word
'stores' has been defined as under:

"articles (as of food) accumulated for
some specific object and issued or drawn
upon as needed the raw or unworked
material supplies of a manufacturing
concern."

21. Thus, the dictionary meaning of
the word 'stores' is material supplies of a
manufacturing
concern
or
articles
accumulated for some specific object and
issued or drawn upon as needed.
22. From the various decisions
referred to above, the principle which
emerges is that if a process of activity is
so integrally related to the ultimate
manufacture of goods so that without that
process or activity manufacture may, if
theoretically possible be commercially
inexpedient goods intended for use in the
process or activity as specified in rule 13
will qualify for special treatment. This is
not to say that every category of goods in
connection
with
manufacture
or
in
relation
to
manufacture
or
which
facilitates the conduct of the business of
manufacture will be included within Rule
13.

23. Applying the aforementioned
principles, I find that the cement which is
required by the applicant for use in the
construction of factory building and/or
foundation, as held by the Hon'ble
Supreme Court in the case of J.K. Cotton
Spinning and Weaving Mills Co. Ltd.
(supra), which has been followed by the
Hon'ble Karnatka High Court in the case
of Ballarpur Straw Board Mills Ltd. and
this Court in the case of M/s Sivalaik
Collulose Ltd. cannot be said that it is
used either directly or even remotely in
the
manufacture
of
finished
goods.
Similar is the case of steel and paints,
which too is required only in the repairs
of boiler and protection of machineries.
They cannot be said to be used even
indirectly
in
the
manufacture
or
processing of goods for sale. Thus, all the
three items would not fall under the
description of the word 'stores', which are
used in the manufacture of finished
goods.

24. In view of the foregoing
discussions, I do not find any force in the
revision. The revision lacks merit and is
INDIAN LAW REPORTS ALLAHABAD SERIES [2001
236
dismissed. However, the parties shall bear
their own costs.