TATA IRON AND STEEL COMPANY LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) The two questions of law, referred by the Commercial Taxes Tribunal, Bihar, Patna, which fall for consideration by the Full Bench, have been formulated in the following terms : I. Whether the services rendered at the petitioner's canteen, in compliance of the provisions of the Factories Act and the Mines Act, involved any element of sale? II. Whether, on the facts and in the circumstances of the case, the petitioner was a dealer in respect of the canteen sale and liable to sales tax ?

(2.) Perhaps, at the very outset it may be noticed that this reference to the larger Bench has been necessitated by a pointed doubt about the correctness of the ratio of the Division Bench judgment of this Court in Commissioner of Commercial Taxes, Bihar Burn and Company Ltd. (Tax Case No. 58 of 1966 decided on 20th December, 1967), as also in Tata Iron and Steel Company Limited State of Orissa [1975] 35 STC 195.

(3.) The Tata Iron and Steel Company Limited was incorporated by its Memorandum and Articles to carry on business in iron and steel and is admittedly engaged in the manufacture of iron and steel products at its works at Jamshedpur, which is registered under the Factories Act. The petitioner-company also owns, amongst others, a mine at Noamundi, which is registered, under the Mines Act. In compliance with the statutory obligations under the Factories Act and also under the Mines Act the petitioner-company maintains, for the factory at Jamshedpur and for the Noamundi mines, canteens, both at Jamshedpur and Noamundi, for the facility of the concerned employees. These canteens are run on no profit no loss basis and indeed, with subsidies required to be provided under the law, thus eliminating any chance or consideration of making any profit therefrom.