D.N.PATEL,J. - (1.) Writ petition has been preferred challenging the judgment and order dated 30.3.2015 passed by the Commercial Taxes Tribunal, Ranchi in Revision Case No. 130 of 2013 for the period 2001-02 as well as Appellate order passed by the Joint Commissioner, Commercial Taxes (Appeal), Jamshedpur dated 7.6.2013 and also the order dated 1.10.2011, passed by the Deputy Commissioner of Commercial Taxes, Jamshedpur Circle, Jamshedpur. This petitioner has also challenged the Demand Notice dated 10.10.2011, issued by the Deputy Commissioner, Commercial Taxes, Jamshedpur Circle, Jamshedpur, which is a consequential order of the earlier three orders, passed by the Assessing officer, Appellate authority and Revisional Authority. The petitioner is also seeking a declaration that the Oxygen Gas used by Tata Steel Ltd., which is being supplied by this petitioner for the purposes of manufacturing of Steel through Basic Oxygen Steel Method (a method of steel making) is a raw material, required directly for use in manufacturing or processing of Steel.
(2.) Factual Matrix : This petitioner who was previously known as B.O.C. India Ltd. is supplying oxygen gas to respondent no.11 M/s. Tata Steel Ltd. This oxygen gas, if used as a material in manufacturing process of Steel, the petitioner has to pay 3% of Sales Tax on the sale price of oxygen and if this oxygen which is sold by this petitioner to M/s. Tata Steel Ltd. is used as one of the raw materials in manufacturing process of Steel then the rate of Sales Tax will be 2% of the sale price of oxygen and this was the bone of contention in the previous round of litigation, which has reached upto Hon'ble the Supreme Court and now in this writ petition the issue involved is whether oxygen sold by this petitioner to respondent no.11 Tata Steel Ltd. is used as a material in manufacturing process of steel or is used as a raw material in manufacturing process of Steel. In the previous round of litigation this very petitioner which was known as B.O.C. India Ltd., at the relevant time in the year 2008 preferred a writ petition bearing W.P.(T) No. 4693 of 2005. In the said writ petition assessment order passed by the Assessing Officer under Bihar Finance Act, 1981 was challenged on the basis of certain notifications, which are as under : a. Notification dated 15th December, 1976; b. Notification bearing SO No. 604 dated 12th April, 1982 c. Notification bearing SO No. 1096 dated 9.9.1983 and d. Notification bearing SO No. 154 dated 3rd February, 1986. Declaration was made by respondent no.11 M/s. Tata Steel Ltd. under Rule 6 of the Bihar Sales Tax Rules, 1983, annexed as Annexure-A and B. In Annexure A the goods which are used as a raw material in manufacturing process of Steel through Basic Oxygen Steel Method (hereinafter referred to as "BOS method") have been mentioned whereas in Annexure-B other materials which are used in manufacturing process of Steel through BOS method have been mentioned. In an application preferred by respondent no.11 M/s. Tata Steel Ltd. having a declaration as required under Rule 6 of Bihar Sales Tax Rules, 1983, oxygen gas is referred in Annexure-B. This declaration has been read and reread by the counsels for both sides, repeatedly. In earlier round of litigation a writ petition was preferred by this petitioner in the name and style of M/s. B.O.C. India Ltd., which was dismissed by this Hon'ble Court vide order dated 2nd November, 2007, as reported in (2008) 1 JCR 473 (Jhr) (M/s. B.O.C. India Ltd. v. State of Jharkhand and Ors.), mainly on the following grounds : (a) This petitioner has no locus standi; (b) The goods viz. Oxygen Gas, as referred at Annexure B to the declaration, which is annexed with an application preferred by M/s. Tata Steel Ltd. under Rule 6 of Bihar Sales Tax Rules, 1983 reveals that Oxygen is not a raw material for manufacturing of Steel, through BOS method, but, the oxygen which is mentioned in Annexure B, simply states that it is one of the materials or goods, used in steel manufacturing process. The aforesaid decision was challenged by the petitioner before Hon'ble Supreme Court in Civil Appeal no. 1538 of 2009. Similarly Tata Steel Ltd. had also challenged the aforesaid decision before the Hon'ble Supreme Court in Civil Appeal no. 1540 of 2009. Both these Appeals were decided by the Hon'ble Supreme Court vide common order dated 5.3.2009. So far as locus standi is concerned, it is permitted to this petitioner as per Para nos. 2021 to the judgment reported in (2009) 15 SCC 590 (BOC India Ltd. v. State of Jharkhand and ors.) and so far as 2nd point on which the writ petition was dismissed by this Court, which is reported in (2008)1 JCR 473(Jhr) (M/s. B.O.C. India Ltd. v. State of Jharkhand and Ors.), it has been pointed out by Hon'ble the Supreme Court at Paragraph no. 33 that whether Oxygen is a raw material or not in manufacturing process of Steel, shall be decided by the Assessing Authority on the basis of materials on record. It has been mentioned in Para 28 of the aforesaid decision of Hon'ble the Supreme Court that the Assessing authority shall visit the place of manufacturing and see whether Oxygen is used as raw material essentially for manufacturing of the Steel or not? Keeping in mind Para 28 of the decision of the Hon'ble Supreme Court, a Committee was constituted by the Assessing Officer, who visited the place where Steel is manufactured by using oxygen and the members of the said Committee were as under : (a) Dr. Bhawani Shankar, Deputy Commissioner, Commercial Taxes, Urban Circle, Jamshedpur; (b) Sri Ranjan Kumar Sinha, Deputy Commissioner, Commercial Taxes, Jamshedpur Circle, Jamshedpur; (c) Sri Yugual Kumar Chanani, Assistant Commissioner, Commercial Taxes, Jamshedpur Circle, Jamshedpur; (d) Sri Ramdeo Prasad Singh, Assistant Commissioner, Commercial Taxes, Jamshedpur, Circle, Jamshedpur; (e) Sri Rajesh Kumar,Commercial Taxes Officer, Urban Circle, Jamshedpur; and (f) Sri Ratan Lal Gupta, Deputy Commissioner, Commercial Taxes, Jamshedpur Circle, Jamshedpur. Aforesaid Committee of six high ranking officers of the State visited the place of manufacturing of Steel at Tata Steel Ltd., Jamshedpur on 4.2.2010, who has given its report, in which the use of Oxygen made by respondent no.11 for manufacturing of Steel through BOS method is mentioned. Before the Assessing Officer, materials have been placed, including the visit report, given by the aforesaid Committee and detailed manufacturing process of Steel has also been pointed out by this petitioner as well as by respondent no.11. Several Text Books have also been referred and the detailed list of documents given by this petitioner is annexed as Annexure 23 to the supplementary affidavit, filed on behalf of this petitioner dated 7th May, 2015 and thereafter, the Assessing Officer-Deputy Commissioner of Commercial Taxes, Jamshedpur Circle, Jamshedpur has passed a detailed speaking order dated 1.10.2011, holding that oxygen gas sold by this petitioner is not used by respondent no.11 as a 'raw material' for manufacturing of Steel through BOS method, but, it is used merely as a 'refining agent' to reduce carbon. Heavy reliance has been placed by this Assessing Officer upon the detailed report, given by the Committee comprising of six officers, as stated herein above, who visited the manufacturing place on 4.2.2010 (Annexure A to the affidavit filed by the respondent-State). , The order passed by the Assessing Officer-Deputy Commissioner of Commercial Taxes, Jamshedpur, Circle, Jamshedpur is under Section 17 of Bihar Finance Act, 1981. Against the aforesaid order, this petitioner has preferred an Appeal U/s 45 of the Bihar Finance Act, 1981 before the Joint Commissioner of Commercial Taxes (Appeals), Jamshedpur Division, Jamshedpur bearing Appeal No. J.R. VATA 68 of 2011-12, which was dismissed by the Appellate Authority vide order dated 7.6.2013. Being aggrieved and dissatisfied with the appellate order, this petitioner has preferred a Revision Application Under Section 46 of the Bihar Finance Act, 1981 before the Commercial Taxes Tribunal, Ranchi being Revision Case No. 130 of 2013, which also was dismissed vide order dated 30.3.2015. Being aggrieved with all the three orders i.e. the orders passed by Assessing Officer, Appellate Authority and Revisional Authority, the petitioner has preferred the present writ petition with a further prayer to declare that Oxygen gas supplied by the petitioner and used by respondent no.11 after purchasing the same, is a basic raw material, used in manufacturing of steel through BOS method and, hence, the petitioner is liable to make payment of Sales Tax @ 2 % of the sale price and not @ 3 % of the sale price of Oxygen. In financial year 2001-02, huge quantity of oxygen was sold by this petitioner and purchased by respondent no.11 for manufacturing of steel through BOS method.
(3.) Arguments Canvassed by Counsel for the Petitioner : Counsel for the petitioner submits that the petitioner (who was formerly known as M/s. B.O.C. India Ltd.) has been selling oxygen gas to respondent no.11 M/s. Tata Steel Ltd., which uses the same as essential raw material for manufacturing of steel through B.O.S. method. This aspect of the matter has not been properly appreciated by the authorities concerned under the Bihar Finance Act, 1981. In the earlier round of litigation the petition preferred by the petitioner in the name and style of M/s. B.O.C. India Ltd., was dismissed on the ground that this petitioner had no locus standi. The locus standi has been approved by Hon'ble the Supreme Court, as per reported decision in the case of B.O.C. India Ltd. v. State of Jharkhand and ors. [(2009) 15 SCC 590], especially Para 20 and 21 thereof. Therefore, this petition has been preferred by this petitioner challenging the orders, passed by Assessing Officer, Appellate Authority and the Revisional Authority Commercial Taxes, Tribunal, Ranchi. The Hon'ble Supreme Court had remanded the matter for fresh decision by the Assessing Officer after visiting the place of manufacturing of steel. Pursuant thereto, a Committee was constituted by the Assessing Officer and the said committee on perusal of BOS method used by respondent no.11 for manufacturing of steel, has narrated in detail, in its report, the manufacturing process. Learned counsel for the petitioner submitted that even as per the report of the said committee, oxygen is used as basic raw material without which steel cannot be manufactured. It is submitted by counsel for the petitioner in detail that what is the manufacturing process of steel and what is the use of Oxygen in that process has also been mentioned in the report given by the Committee constituted by Assessing Officer who had visited the place of manufacturing. The detailed report is given by the Committee dated 26.4.2010. The petitioner has sold huge quantity of oxygen to respondent no.11 in the year 2001-02. Several Annexures and several materials have been referred to by the counsel for the petitioner, including Text Books, which speak about the use of Oxygen in manufacturing of steel through BOS method and it is submitted by counsel for the petitioner that looking to the notification dated 3.2.1986 bearing SO no. 154, if the Oxygen is used as a raw material directly in the manufacturing process of the steel through BOS method, the petitioner is liable to make payment of only 2% of the Sales Tax and not @ 3%. This aspect of the matter has not been properly appreciated by the authorities under the Bihar Finance Act, 1981. It is submitted by counsel for the petitioner that the respondent-authorities may replace the Oxygen, but, in that case the steel will not be manufactured. Steel is manufactured by respondent no.11 through BOS method, in which use of oxygen cannot be replaced. This fact reveals that Oxygen is a basic raw material used in manufacturing process of steel. Oxygen cannot be replaced by any other element from the whole periodic table. It is further submitted by counsel for the petitioner that there may be a manufacturing process, stage-wise i.e. initially oxygen might not have been added in the Furnace, but, there may be an addition of oxygen at a later stage of manufacturing process. Counsel for the petitioner has explained in detail the manufacturing process of steel through BOS method and it is submitted that a stage will come when Pig Iron will be manufactured, which is having approximately 4% of carbon and now the oxygen is being added to remove the carbon so that A+B=C (Pig iron+ Oxygen Gas=Steel) (manufacturing process through BOS method). It is submitted by counsel for the petitioner that every manufacturing is not over in one reaction. There may be chain of reactions in manufacturing process. There can be further addition of the basic raw material in second reaction or third reaction also. Thus, C+D=E and after E is evolved in manufacturing process, there may be a need of addition of further raw material. This is how in the last chain of reaction i.e. in Pig Iron, oxygen gas is added which gives final product i.e. steel. In fact, Oxygen is being added through high pressure injectors. Pressure etc. has to be maintained so as to penetrate Pig Iron which is, in fact, in a semisolid state, having approximately 4% of carbon. This Oxygen injected with a heavy pressure injector will penetrate Pig Iron, which will remove the carbon contents and ultimately steel will be manufactured after chemical reaction with carbon and in this process oxygen gas will be converted into Carbon Monoxide (CO) and/or Carbon Dioxide (CO2). It is submitted by counsel for the petitioner that merely because oxygen gas is injected in last chain reaction, it cannot be labelled as "refining agent"a terminology used in the report given by the aforesaid Committee and the terminology as used by all the authorities under the Bihar Finance Act, 1981. Counsel for the petitioner submitted that whatever may be the nomenclature given by the respondents to the oxygen, but, the fact remains that it is inevitably used in the manufacturing process of steel, and, therefore, it is a basic raw material, without usage of which, desired end product-"steel" cannot be manufactured. Oxygen is such a basic raw material that no steel can be manufactured without usage thereof through B.O.S. method. Pig Iron having approximately 4% of Carbon content has to have a chemical reaction with oxygen gas, in the B.O.S. method and, therefore, oxygen gas is injected with high pressure injectors. The Government of Jharkhand cannot replace oxygen with any other element from the whole periodic table and the Government cannot suggest that if another method of manufacturing of steel would have been followed, oxygen would not have been needed, at all. This is not permissible in the eyes of law, because the selection of end-product and selection of manufacturing process thereof is left at the discretion of the manufacturer and, therefore, if the steel is to be manufactured through BOS method only, then Oxygen is a basic raw material without which never a Pig Iron can be converted into steel. Even if oxygen gas is added in the last chain of reaction, that does not mean that oxygen is not a basic raw-material. It may happen that initially all the raw materials might not have been used in manufacturing process. Raw materials can be added stagewise in manufacturing process also. Initially there may be an addition of hematite (it is excavated from the earth). Steel manufacturing process is a very complex process. In first stage there may be addition of certain raw materials and at a later stage, there will be further addition of the raw materials, but, the fact remains that without addition of oxygen, through high pressure injectors in a highly sophisticated furnace where liquid Pig Iron is present, carbon cannot be separated. Carbon can be separated after reacting with oxygen gas and left out product is known as Steel and carbon is converted into Carbon Monoxide and Carbon Dioxide. Other products may also come out during this process like P2O5 etc. We are not concerned with CO, CO2, P2O5 etc. It is submitted by counsel for the petitioner that without there being use of oxygen as a raw material, steel cannot be manufactured. This aspect of the matter has not been properly appreciated by all the authorities under the Bihar Finance Act, 1981 and hence, this writ petition has been preferred. It is further submitted by counsel for the petitioner that merely because respondent no.11 has filed a declaration in an application under Rule 6 of the Bihar Sales Tax Rules, 1983, inadvertently stating therein that Oxygen is one of the 'goods' used in manufacturing of steel in Annexure B, instead of one of the 'raw materials' used in manufacturing process of steel, that does not mean that this petition cannot be filed. The respondents-State authorities should appreciate the manufacturing process of steel through BOS method and not a mistaken declaration or declaration made by inadvertence. This argument of the State has already been canvassed in the earlier round of litigation and has been dealt with by Hon'ble the Supreme court while deciding the case of this writ petitioner, as reported in (2009) 15 SCC 590 (supra), especially in paragraph no. 29 and 32 thereof. In this matter also, the respondents have raised some objections and the counsel for the petitioner has placed reliance on para nos. 29 and 32 of the aforesaid decision that a mistaken declaration has got no value and tax liability cannot be imposed upon a mistaken declaration by the assessee. Counsel for the petitioner has also submitted that if the Mass Balance Equation for manufacturing of the steel is seen, it will reveal that huge quantity of Oxygen is being utilized for manufacturing of steel through BOS method . Generally catalyst is used in a very small quantity and it never reacts by itself. It remains as it is even after completion of the reaction, whereas huge quantity of a raw material-oxygen is participating in a chemical reaction and it converts not only by itself, but, it also converts Pig Iron into steel. Thus, Oxygen is converted into CO and CO2 and Pig Iron is converted into steel. Thus, reagent and reactants both are changing their physical and chemical properties. This is a test whether the material used is a raw material or not. Catalysts never changes by itself and, therefore, it is not a raw material, but, when reagent is changing its own physical and chemical properties, while reacting with another material and when it is used in a huge quantity, then it is a raw material, especially when without use of it no desired end-product can be obtained. It is reiterated by counsel for the petitioner that huge quantity of oxygen gas (449, 438, 281 Nm3) has been utilized for manufacturing of steel, which is sold by this petitioner and purchased by respondent no.11 M/s. Tata Steel Ltd. This aspect of the matter has also not been appreciated by the authorities under the Bihar Finance Act, 1981 and hence, the orders impugned may be quashed and set aside and oxygen sold by this petitioner and purchased by respondent no.11 may be declared as 'raw material', used by respondent no.11 for manufacturing of steel through BOS method. Counsel for the petitioner has placed reliance on a decision rendered by Hon'ble the Supreme court in the case of Collector of Central Excise New Delhi v. M/s. Ballarpur Industries Ltd., as reported in (1989) 4 SCC 566, especially upon paragraph nos. 13 to 19 thereof and has submitted that in manufacturing process of Paper, Sodium Sulphate (Na 2 SO 4) is used by the manufacturer as a basic raw material. In detail, reasons have been given by Hon'ble the Supreme Court in the aforesaid paragraphs. If the same analogy is applied in the facts of the present case, the case of this petitioner stands on better footing. Oxygen is used in manufacturing of steel through BOS method, in a huge and large quantity and Oxygen itself is changing its physical and chemical properties, while reacting with the reactants i.e. Pig Iron and is converting Pig Iron into steel and converting carbon into other chemicals. This characteristic of oxygen, its quantity and chemical reaction reveals that oxygen is used as a basic raw material for manufacturing of steel through BOS method and, therefore, all the essentials, enumerated in the notification bearing SO No. 154 dated 3.2.1986 have been fulfilled and, hence, Sales Tax leviable is only at the rate of 2% and not @ 3 %. ;