Pathak, J. - (1.) These appeals by special leave are directed against the orders of the High Court of Bombay declining to call for a statement of the case on the questions proposed by the appellant.
(2.) The respondent manufactures Nylon-6 yarn from caprolactum imported from Germany. It appears that crude naphtha left over after the extraction of petrol and other oil from crude oil yields benzene, which in turn gives cyclo-hexane, and on further processing that leads to caprolactum. When caprolactum is subjected to heat up to 270 degrees Nylon-6 results therefrom in the form of yarn. The chemical composition of caprolactum remains the same when it is converted into nylon fibre. When the nylon fibre is subjected to further heating the process is reversed and the nylon fibre is reconverted into caprolactum.
(3.) For the assessment year 1965-66 the respondent claimed rebate of surtax under the first proviso to paragraph one of the Third Schedule to the Companies (Profits) Surtax Act, 1964 on the ground that its product Nylon-6 was covered by Item No. 19 of paragraph two of the Schedule. Item No. 19 read: "Petrochemicals including corresponding products manufactured from other basic raw materials like calcium carbide, ethyl alcohol or hydrocarbons from some other sources." The contention was that Nylon-6 manufactured from imported caprolactum was a "petrochemical". Similarly, for the assessment years 1968-69 to 1970-71, the respondent claimed that it was entitled to the higher development rebate at the rate of 35% under S. 33 (1) (b) (B) (i) (a) and also relief under S. 80-I of the Income Tax Act, 1961 on the ground that its product Nylon-6 was covered by Item 18 of the Fifth Schedule and Sixth Schedule to that Act. Item 18 of those Schedules was enacted in the same terms as Item 19 of paragraph two set forth earlier. The assessee's claim rested on the basis that its product Nylon-6 was a "petrochemical".;