GUJARAT RE ROLLING MILLS ASSOCIATION Vs. STATE OF GUJARAT
LAWS(GJH)-1988-2-7
HIGH COURT OF GUJARAT
Decided on February 01,1988

Gujarat Re Rolling Mills Association Appellant
VERSUS
STATE OF GUJARAT Respondents


Cited Judgements :-

INDIAN OIL CORPORATION LTD VS. COLLECTOR OF ELECTRICITY DUTY [LAWS(GJH)-2013-7-288] [REFERRED TO]
COLLECTOR OF ELECTRICITY DUTY VS. INDIAN OIL CORPORATION LTD [LAWS(GJH)-2015-2-45] [REFERRED TO]


JUDGEMENT

P.R.GOKULAKRISHNAN - (1.)In all these Special Civil Application a common question as to the interpretation of Sec. 2(ee) in relation to Sec. 2(bb) of the Bombay Electricity Duty Act 1955 arises. If the Undertaking of the petitioners herein comes under the category of industrial undertaking lesser duty is leviable on the consumption of electricity while if they are service undertaking higher electricity duty is leviable. Some of these Special Civil Applications have been filed directly after the demand was made for the payment of duty treating the undertaking as service undertaking some of these Special Civil Applications have been filed after the first authority has found that these undertakings are service undertakings and some of the Special Civil Applications have been filed after the appellate authority has found that the undertakings are the service undertakings.
(2.)The only argument advanced by the learned Counsel Mr. K. S. Nanavati the learned Counsel Mr. S. I. Nanavati and the learned Counsel Mr. N. J. Mehta who are all appearing in their respective Special Civil Applications is that the petitioners in their respective Special Civil Applications are not service undertakings within the meaning of the amended Sec 2(ee) of the Bombay Electricity Duty Act 1958 but are industrial undertakings within the meaning of amended Sec. 2 (bb) read with Explanation thereto of the Bombay Electricity Duty Act 1958 and are therefore liable to electricity duty under Item No. 5-A of the First Schedule to the Bombay Electricity Duty Act 1958 read with amended Sec. 2(bb) thereof. The State Electricity Board and the authorities constituted for deciding the question as to whether an undertaking is a service undertaking or an industrial undertaking held that if an undertaking carries on specific activities contemplated by Sec. 2(ee) of the Act it would be treated as service undertaking It further held that if the undertaking carries out the activities specified under clause (ee) of Sec. 2 of the Act it will come under the category of service undertaking. Before the amendment of Gujarat Act No. 17 of 1983 explanation to Section 3(2)(vii)(b)(i) defines Industrial Undertaking as follows:
" An industrial undertaking means an industrial undertaking which manufactures or produces goods for sale or use in the manufacture or production of other goods but does not include an undertaking which manufactures or produces any kind of goods and drinks meant ordinarily for consumption on the premises of the undertaking; and...... "
This definition of industrial undertaking v as deleted and instead by Gujarat Act No. 17 of 1983 Sec. 2(bb) and Sec. 2(ee) have been substituted. They read as follows :
"(bb) Industrial undertaking means an undertaking engaged predominantly in the manufacture or the production of goods (other than eatables or drinks) or engaged in any job work involving the manufacture or the production of goods irrespective of whether any service of the nature specified in clause (ee) is involved in such job work but does not include a service undertaking; Explanation :- For the purpose of this clause and clause (ee) an undertaking shall be construed to be engaged predominantly in the manufacture or the production of goods or. as the case may be in providing service of the nature specified in clause (ee) if the gross income of such undertaking from the manufacture or the production or as the case may be providing such service in the premises of the undertaking is greater in relation to gross income from other activity of the undertaking In the same premises."

(ee) Service undertaking means an undertaking which is engaged predominantly in providing all or any of the following services namely :

(i) repairs renovation reconditioning restoration restitution or preservation

(ii) cleaning

(iii) polishing

(iv) cutting or pressing

(v) drawing stretching twisting rolling re-rolling or orientation of non-ferrous and ferrous materials including stainless steel materials

(vi) case hardening carbonising or any other surface treatment

(vii) coating of any surface with any material

(viii) electronic data processing

(ix) such other service as the State Government may by notification in the Official Gazette specify."
The Statements of Objects and Reasons mentioned in the Bill which is sought to amend the Bombay Electricity Duty Act 1958 mentions that such amendment was mainly introduced with a view to rationalise the rates of electricity duty and augment the financial resources of the State. It further states that amendment to Sec. 2 of the Act was made so as to include therein the definitions of expressions industrial undertaking and service undertaking so as to include in the former undertaking engaged in the manufacture or production of goods on job basis and clarify the latter.
(3.)Keeping the above provisions and the Statement of Objects in mind we can analyse the amendment to Sec. 2(bb) and Sec. 2(ee) and formulate as to how to decide an undertaking as an industrial undertaking or a service undertaking. Before the amendment of Sec. 2 there is no definition for service undertaking. The definition industrial undertaking as it stood before the amendment does not include manufacture or production of goods on job basis. The definition before the amendment brought into the category of industrial undertaking only such of those undertaking which manufacture or produce goods for sale or use in the manufacture or production of other goods. If an undertaking does any job work and in that process some manufacture or production is made such undertaking would not have come under the category of industrial undertaking as it stood before the amendment. Subsequent to the amendment and introduction of clause 2(bb) if an undertaking engages predominantly in the manufacture or production of goods or engages itself in any job work involving the manufacture or production of goods it will come under the category of industrial undertaking.
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