NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4949 OF 2019 (@ S.L.P.(C) No.2404 of 2018)

THE STATE OF JHARKHAND & ORS.       …  APPELLANT(S)

VERSUS

M/S. AKASH COKE INDUSTRIES PVT. LTD. …  RESPONDENT(S)

WITH CIVIL APPEAL NO.4950 OF 2019 (@ S.L.P.(C) No.2407 of 2018)

J U D G M E N T

K.M. JOSEPH, J.

1. Leave granted.

2. By  the  impugned  judgment  passed  in  a  Writ

Petition, the High Court has directed the appellants

to  reimburse  the  State  Sales  Tax  paid  by  the

respondent-writ  petitioner  towards  the  purchase  of

coal  with  statutory  interest.  The  respondent-writ

petitioner  purchased  coal  within  the  State  of

Jharkhand. It paid sales tax in a sum Rs.17,89,412/-.

Coal was thereafter converted to coke. The coke was

thereafter sold by way of inter-state sale. On the

inter-state transaction, Central Sales Tax was levied

and  it  was  paid  in  a  sum  of  Rs.63,80,573/-.

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Thereafter, the respondent filed an application for

refund  of  the  Sales  Tax  paid  on  the  inter-state

purchase of coal under Section 15(b) of the Central

Sales Tax Act, 1956 (hereinafter referred to as ‘the

Act’). A perusal of the impugned judgment would show

that  with  the  refund  application,  excess  demand

notice was not allegedly sent as per Rules 35(4) and

35(6) read with Rule 34(2) of the Bihar Sales Tax

Rule,  1983.  The  High  Court,  however,  rejected  the

contentions on the following reasons:

“14.  The  contention  raised  by  the learned  counsel  appearing  for  the respondents  that  with  refund application  excess  demand  notice  was never annexed as per Rules 35(4) and 35(6) to be read with Rule 34(2) of the Bihar Sales Tax Rules, 1983. This contention  is  not  accepted  by  this Court  mainly for  the reasons  of the following absolutely undisputed facts:   (a) Sales  Tax  paid  under  the  State

Sales Tax by this petitioner for purchase of the coal as an intra- state sale is at Rs.17,89,412/-.

(b) The  coal  is  converted  into  coke and  now  the  coke  is  sold  as  an inter-state  sale. Hence,  Central Sales  Tax  has  to  be  paid  @  4% because the same is declared goods of  special  importance  under Section 14 of the CST Act. For the Central  Sales  Tax,  there  is  an order of assessment and there is

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payment of Sales Tax also, which is at Rs.63,80,573/-.

(c) As per Section 15(b) of the CST Act, when end product is sold as inter-state sale and Central Sales Tax is already paid and for the purpose of raw material if any tax is paid under the State Sales Tax, the same shall be reimbursed.”

3. We heard the learned Counsel for the parties.

4. Learned Counsel appear for the appellant would

raise only one contention before this Court. It is

the  case  of  the  appellant  that  respondent  has

purchased coal by way of intra-state sale. What was

sold  by  way  of  inter-state  sale  was  not  coal  but

coke. Therefore, the appellant is not entitled for

reimbursement of the Sales Tax paid on coal under

Section 15(b) as both goods are not same.  

5. Article 286 of the Constitution of India, 1949,

at the relevant time prior to its omission, read as

follows:

“286. Restrictions as to imposition of tax on the sale or purchase of goods. (1) *** (2) *** (3) Any law of a State shall, in so far as

it  imposes,  or  authorises  the imposition of, (a) a tax on the sale or purchase of

goods  declared  by  Parliament  by

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Provided  that  during  the period commencing on the 23rd day of February, 1967 and ending with the  date  of  commencement  of section  11  of  the  Central  Sales Tax (Amendment) Act, 1972 (61 of 1972)  this  clause  shall  have effect subject to the modification that  the  words  "but  excluding charcoal" shall be omitted.”

8. Now, it is necessary to advert to Section 15 of the said Act:

“15.  Restrictions  and  conditions  in regard to tax on sale or purchase of declared goods within a State.— Every sales tax law of a State shall, in so far  as it  imposes or  authorises the imposition  of  a  tax  on  the  sale  or purchase of declared goods, be subject to  the  following  restrictions  and conditions, namely:—

(a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed four per cent of the sale or purchase price thereof;

(b) where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter-State trade  or  commerce,  and  tax  has been  paid  under  this  Act  in respect of the sale of such goods in the course of inter-State trade or commerce, the tax levied under such  law  shall  be  reimbursed  to the person making such sale in the course  of  inter-State  trade  or commerce  in  such  manner  and

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subject to such conditions as may be provided in any law in force in that State;  

(c) where a tax has been levied under that law in respect of the sale or purchase inside the State of any paddy  referred  to  in  sub-clause (i) of clause (i) of section 14, the tax leviable on rice procured out of such paddy shall be reduced by  the  amount  of  tax  levied  on such paddy; where a tax on sale or purchase of paddy referred to in sub-clause  (i)  of  clause  (i)  of section 14 is; leviable under the law and the rice procured out of such  paddy  is  exported  out  of India, then, for the purposes of sub-section (3) of section 5, the paddy and rice shall be treated as a single commodity;

 (d) each of the pulses referred to in

clause  (via)  of  section  14, whether  whole  or  separated,  and whether  with  or  without  husk, shall  be  treated  as  a  single commodity for the purposes of levy of tax under that law.”

9. The question arises as to whether such a right

can be claimed when the goods sold under the inter-

State are allegedly different from the goods which

were  subjected  to  tax  under  the  intra-State

transaction. This is despite the fact that both the

goods  which  were  purchased  by  way  of  intra-State

transaction and the goods which are subject matter of

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the inter-State transaction are both declared goods

under Section 14 of the Act.

10. Learned  Counsel  for  the  appellant  drew  our

attention to the judgment in the case of Tvl. K.A.K.

Anwar and Co. v. State of Tamil Nadu  1.  

11.  The question, however, arises as to whether we

should go into the issue which has been raised by the

appellants. The respondent – writ petitioner contends

that the question as to whether Coal and Coke are

same  goods  was  not  at  all  raised  before  the  High

Court. The issue before the High Court was something

different.  The  writ  petition  was  filed  by  the

respondent  feeling  aggrieved  by  the  refusal  to

reimburse the respondent, the amount of tax paid on

the  intra-State  transaction.  Let  us  peruse  the

pleadings to ascertain as to what really the issue

was before the High Court. The relief sought by the

respondent – writ petitioner is as follows:

“It  is,  therefore,  prayed  that  Your

Lordships may graciously be pleased to issue

Rule  Nisi  calling  upon  the  Respondents  to

show cause as to why;

1 (1998) 1 SCC 437

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(i)     An appropriate writ/order/direction,

including  Writ  of  Mandamus,  be  not  issued

directing  the  Respondents  to  issue  Refund

Payment Order to the petitioner for an amount

of Rs.12,32,496/- pertaining to the Financial

Year  2005-06,  being  the  admitted  amount

adjudicated  by  Respondents  themselves  in

terms of Section 15(b) of the Central Sales

Tax  Act,  1956  towards  the  claim  of  the

petitioner  for  reimbursement  of  the  tax

levied  by  the  State  Government  under  the

Bihar  Finance  Act,  1981  on  declared  goods

which  were  subsequently  sold  in  course  of

inter-State trade and commerce.  

Further appropriate writ/order/directions,

including  Writ  of  Mandamus,  be  not  issued

directing  the  Respondents  to  pay  statutory

interest to the petitioner  @ 9% per annum in

terms of Section 43 of the Bihar Finance Act,

1981 from the expiry of the period of six

months  from  the  date  of  receipt  of  the

application of refund filed by the petitioner

till the date when Refund Payment Order is

issued in favour of the petitioner.”

12.  The case that was set up before the High Court

was inter alia as follows:  

“The respondent is a manufacturer of Hard Coke

and for manufacture of hard coke, one of the necessary

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raw material is ‘Coal’ which the respondent used to

purchase  by  way  of  intra  State  transaction  in  the

State of Jharkhand. Coal including Coke, in all its

forms is also one of the declared goods under Section

15 of the C.S.T. Act. He referred to the original

Assessment Order for the period 2005-06 as having been

passed on 17.06.2008 both under the State Sale Tax Act

and C.S.T. Act. It is further its case that certain

transactions have been wrongly classified as falling

under the State Act and the tax was levied under the

State  Act.  It  filed  an  appeal  before  the  Joint

Commissioner who set aside the Assessment and remanded

the matter.”  

13.  The  respondent  thereupon  filed  Revision

Petition  before  Commercial  Taxes  Tribunal

complaining  that  instead  of  Appellate  Authority

remanding the matter back to the Assessing Officer,

it  should  have  itself  decided  the  issue  whether

sales were actually inter-state and not intra-state

sales. The same was dismissed. The Assessing Officer

passed a revised order and the sales were determined

as  interstate  sale.  The  liability  was  fixed  at

Rs.26,97,266.34.  A  NIL  demand  was  raised  as  the

respondent had already paid the said amount. The

respondent was entitled to be reimbursed the tax

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paid under the State Law on Coal and, therefore, the

respondent had filed an application seeking refund.

On the basis of the detailed adjudication by the

Assistant  Commissioner  of  Commercial  Taxes,  the

amount refundable to the petitioner under Section 15

(b)  of  the  Act  was  determined  and  an  amount  of

Rs.12,32,496  was  determined.  Thereupon,  the

respondent  filed  an  application  under  statutory

Form-XX as prescribed under Rule 35 of the Rules,

1983 but no steps were taken by the respondent for

issuance  of  the  Refund  Payment  Order.  Despite

repeated  requests  to  process  its  application  for

refund and to issue the Refund Payment Order, no

steps were taken. The respondent was entitled to

claim refund of the said amount with interest @ 9%

from the date of expiry of 6 months of the date of

receipt of the application.

14. On  these  allegations,  the  writ  petition  was

filed.

15.  In the counter affidavit to the writ petition

filed by the appellants, the question as raised in

the special leave petition, viz., whether Coal and

Coke  are  different  goods  mentioned  under  Section

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15(b) of the Act was not raised. The question set up

in  the  counter  affidavit  was  that  refund  can  be

claimed only in the event where a separate order has

been duly passed under such provisions and it was

contended that the application for refund in the

instant  case  should  have  been  in  Statutory  FORM

XXIII and not in regular FORM XX and furthermore

there should have been an issuance of excess payment

notice in the statutory demand notice in Form XV. It

was also contended that there was no inaction on

part of the appellants. The appellants insisted on

excess  payment  notice  in  the  prescribed  form.  A

supplementary counter affidavit was filed on behalf

of the Assistant Commissioner of Commerce Taxes who

is  the  4th appellant  before  us.  Therein,  it  was

stated that under Memo dated 10.12.2016 for both

financial  years  2004-05  and  2005-06,  the  Joint

Commissioner  Commercial  Taxes  informed  the

respondent regarding rejection of its application

for refund. Therein, it was again reiterated that

the respondent is required to submit the statutory

FORM  XXIII.  Thereafter,  respondent  filed  an

application to amend its writ petition seeking to

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challenge the orders of rejection. Petitioner Nos.3

and 4 in the special leave petition, filed a counter

affidavit. Therein, it is inter alia contended that

in Form XXIII annexed by the respondents, the amount

of tax paid in Column 6 was shown as Rs.9,28,379.52

whereas  the  claim  of  the  respondent  in  the  writ

petition is Rs.12,32,496. The error is said to have

been  originated  from  the  order  dated  04.08.2011

passed  under  Section  15(b)  of  the  Act.  It  was,

therefore,  prayed  that  revenue  of  the  government

exchequer was involved, the writ petition may be

disposed  of  remanding  the  case  back  to  the

respondent to pass an order considering the actual

facts  of  the  case.  It  is  also  stated  that  the

appellants are duty bound to refund any such amount

which will be accrued as claimed under Section 15(b)

of the Act.  

16.  It  is  on  these  pleadings  that  High  Court

proceeded  to  consider  the  petition  and  pass  the

order which we have already adverted to. There was

absolutely no whisper in the counter affidavit or

additional affidavit filed by the appellants seeking

to project the dispute that Coal purchased by the

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respondents  was  not  the  same  good  as  Coke

manufactured out of Coal and, therefore, on sale of

Coke in an inter-state Sale, the respondent is not

entitled to get refund of the tax paid on the intra-

state purchase of Coal.

17. The  same  issue  is  involved  in  the  other

connected appeal, i.e., Civil Appeal arising out of

SLP(C)No.2407/2018.

18. In our view, the question which has been raised

by the Appellant-State, was never raised and the

writ petition filed by the respondent, was on the

basis  of  the  determination  of  the  Refund  under

Section 15(b) of the Act.  In such circumstances, we

are of the view that no relief can be granted to the

appellant.  Accordingly,  the  appeals  will  stand

dismissed.

……………………………………CJI.                                       (RANJAN GOGOI)

………………………………………….J.    (SANJAY KISHAN KAUL)

……………………………………………J.                                         (K.M. JOSEPH) New Delhi, May 10, 2019.          

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