Holding

BOC, being a dealer and assessee, is a person aggrieved and has locus standi to maintain the writ, and the issue of oxygen's status as raw material is a factual matter for the assessing authority, leading to the set‑aside of the demand.

Summary

M/s BOC India Ltd., a manufacturer and dealer of oxygen gas, supplied the gas to M/s Tata Iron & Steel Co. Ltd. (TISCO) for steel production. Oxygen was listed in BOC's registration certificate as a good taxable at 3%, but later notifications reduced the rate for raw materials used directly in manufacture to 2%. BOC began charging 2% and deposited tax accordingly, prompting the tax department to issue a demand notice for the differential amount, alleging BOC owed tax at 3%. BOC filed a writ petition challenging the demand; the High Court dismissed it for lack of locus standi, holding that only TISCO, the purchaser, could contest the tax. The Supreme Court held that BOC, as a dealer and assessee, is a person aggrieved and thus has locus standi. The question of whether oxygen qualifies as a "raw material" is a factual issue to be decided by the assessing authority, not by a writ. Consequently, the demand was set aside and the matter was remitted to the assessing authority for fact‑finding, with the appeal allowed.

Issues considered

Whether BOC, as a dealer/seller, has locus standi to challenge the sales tax demand.
Whether oxygen gas supplied to a steel manufacturer qualifies as "raw material" under the Bihar Finance Act, 1981 and related notifications.
Whether the determination of raw‑material status is a question of fact beyond the jurisdiction of a writ petition.
Whether the tax demand on BOC can be set aside pending assessment.

Legislation cited

Bihar Finance Act, 1981s. 13(1)(b), s. 14(2), s. 16(9), s. 54
Bihar Sales Tax Rules, 1983s. 3(9), s. 6(1)(b), s. 6(4)

Subjects

sales taxraw materiallocus standiBihar Finance Actregistration certificateindustrial gasestax demandfactual issueassessing authority

Judgment

[2009] 4 S.C.R. 253

• MIS BOC INDIA LTD.
v.
A

STATE OF JHARKHAND & ORS.
Civil Appeal No. 1538 of 2009
MARCH 5, 2009
B
[S.B. SINHA AND CYRIAC JOSEPH, JJ.]

., Bihar Finance Act, 1981: s.13(1}(b) - Sa/es Tax - Gas
. producer supplying gas to steel manufacturer who showed
oxygen in the list of goods taxable at 3% as specified in the
Annexure 'B' appended to the Registration Certificate - By c
subsequent Notification, sales tax on sale of raw materials
required directly for use in manufacture of goods fixed at 2%
- Gas supplier started charging 2% sales tax on supplies of
gas to steel manufacturer - Demand notice on gas supplier
t opining that steel manufacturer was liable to pay purchase D
tax at 3% on oxygen gas- Writ petition - Dismissed on ground
that gas supplier had no locus standi to file writ petition as tax
was payable by steel manufacturer - Held: Demand was made
on gas supplier- He was person aggrieved and thus had locus
standi to file writ petition - Question as to whether oxygen gas E
was raw material or not in the manufacture of steel is essentially
a question of fact and cannot be decided in writ petition -
,,
• Demand is set aside- Question to be considered by Assessing
Officer when raised by assessee - Bihar Sales Tax Rules,
1983 - r. 6. F

Mis Tata Iron & Steel Company Limited (TISCO)
produced steel. For the said purpose, it purchased oxygen
gas from M/s B.O.C. India Ltd. (BOC).

"': TISCO was granted a registration certificate in terms G
of the provisions of Section 13(1)(b) of the Bihar Finance
Act, 1981. The said certificate originally was granted on
16.3.1983 and was renewed from time to time. Oxygen was

253 H
254 SUPREME COURT REPORTS [2009] 4 S.C.R

A shown in the list of goods taxable at 3% as specified in
Annexure 'B' appended to the registration certificate. •
From time to time several Notifications were issued
in terms whereof varying rate of tax were prescribed in
respect of goods required directly for use in manufacture.
B By Notification dated 3.2.1986, sales tax on sale of the raw
materials required directly for use in the manufacture of
processing of goods for sale excluding such raw materials
which had already undergone any manufacturing or t ,_
production process and which are required for further ..
c assembly thehrewith shall be at the rate of 2%.
TISCO never applied for amendment or modification
of the Registration Certificate. Oxygen gas continued to
be allowed to remain in Annexure 'B' of the Registration
Certificate wherefor sales tax was payable at the rate of
D
3%. Till the Assessment Year 2002-2003, for supply of ·~

oxygen gas to TISCO, BOC charged sales tax at the rate '
of 3%. However, the said purported mistake was sought ...
to be rectified by BOC in terms of the said Notification
dated 3.2.1986 charging 2% sales tax on the supplies of
E oxygen gas made to TISCO. BOC also deposited tax at
the rate of 2% on the sale of industrial gases to TISCO.
Department issued a demand notice on BOC.
Questioning the validity of the notice, a writ petition was "•
F filed before the High Court which was dismissed on the
ground that BOC had no locus standi to file writ petition
as admittedly tax was payable by TISCO; that TISCO was
authorized to purchase at the concessional rate of 3%
and not at the rate of 2% and, thus, the demand was
unassailable; that the selling dealer was bound by the
G
certificate granted to it under Section 13(1 )(b) of the Act. It
was also held that whether oxygen gas was a raw material
or not cannot be decided/determined in writ petition filed
by BOC as TISCO alone was competent to explain to the
prescribed authority as to how an item which had all along
H
MIS BOC INDIA LTD. V 255
STATE OF JHARKHAND & ORS.

been treated and mentioned as goods as per Annexure A
l 'B', could be treated as raw material. BOC and TISCO filed
these appeals.
Allowing the appeals, the Court
HELD: 1. BOC was the manufacturer of oxygen gas. B
It was a dealer within the meaning of the provisions of the
Bihar Finance Act. It was an assessee. It even as an agent
of the State was bound to collect taxes on its behalf and
;. ... deposit the same in accordance with law. Non-compliance
thereof would lead to penal actions. Even in the demand c
notice, it was threatened with proceedings for recovery
of the differential amount unless it produced the evidence
of deposit thereof. Thus, a demand was made on BOC.
Hence, it had locus standi to maintain the writ application.
TISCO was entitled to purchase the said goods at a
0
concessional rate. If the material was used for
'·' manufacture, the rate of tax was 3% whereas if the material
is used as raw material for processing and/or
manufacturing of the end product, the rate of tax would
be 2%. Not only the penal proceedings but also other
proceedings could be initiated against it for non-deposit E
of the aggregate amount of tax within the prescribed
period. If an order of assessment is passed against the
assessee, the only remedy before it was to prefer an
• ·'
appeal/revision in terms of the provisions of the Act. Thus,
it was a person aggrieved to maintain a writ application. F
[Paras 16, 17]. [269-A-G]
Kabushiki Kaisha Toshiba vs. TOSIBA Appliances Co.
and Ors. 2008 (8) SCALE 354 - relied on.
Tata Iron & Steel Co. Ltd. vs. State of Jharkhand & Ors. G
(2005) 4 SCC 272; The Trade Mark No. 70, 078 of Wright,
Crossley, and Co. (1898) 15 RPG 131- referred to.
2.1. The expression "raw material" is not defined. It
has to be given its meaning as is understood in the H
256 SUPREME COURT REPORTS (2009) 4 S.C.R.

A common parlance of those who deal with the matter. [Para
20] [270-C]
,

Collector of Central Excise, New Delhi vs. Mis Ballarpur
Industries Ltd. (1989) 4 SCC 566; Tata Engineering
andLocomotive Company Limited vs. State of Bihar and Anr
B (1994) 6 sec479; Commissioner of Customs, Bangalore
vs. ACER India (P) Ltd. (2008) 1 SCC 382; Ponds India Limited
vs. Commissioner of Trade Tax, Lucknow (2008) 8 SCC 369
- relied on. •
...
c known2.2.norThe manufacturing processes involved is not
the role played by oxygen gas in the matter of
manufacturing of steel. It is also not possible to base
decision solely on the basis of a diagram contained in
Encyclopedia Britannica. Whether oxygen gas can be
considered to be a raw material is essentially a question
D of fact: Evidence is required to be adduced.[Para 23] [272-
D-E] '
'
Narbada Prasad vs. Chhagan Lal and Ors. (1969) 1 SCR
499; Kunwar Pal Singh (dead) by L.Rs. etc. etc. vs. State of
UP and Ors. (2007) 5 SCC 85 - held inapplicable.
E
3. Even if an applicant does not claim benefit under
a particular notification at the initial stage, he is not
debarred, prohibited or estopped from claiming such
benefit at a later stage. For these reasons, the impugned
judgment cannot be sustained. The demand made on the
• .
F
appellant is also set aside. The question, as to whether
the oxygen gas is a raw material for the manufacture of
steel or not may be determined by the Assessing Authority
on the basis of the material(s), which may be brought on
record by the parties. The Assessing Authority is directed
G to give an opportunity to the parties to adduce evidence ,•
in this behalf. All other consequential proceedings may '
follow on the basis of the determination on the said
question. [Paras 25-27] [273-G-H; 274-A-C]
Kunwar Pal Singh (dead) by L.Rs. etc. etc. vs. State of
H
\ MIS BOC !NOIA LTD. V. 257
-· STATE OF JHARKHAND & ORS.

UP and Ors. (2007) 5 SCC 85; Share Medical Care vs. Union A
. }
of India and Ors. (2007) 4 sec 573 - relied on.
-~
Case Law Reference

(2005) 4 sec 212 referred to Para 12
(1898) 15 RPC 131 referred to Para 18 B

2008 (8) SCALE 354 relied on Para 18
...
(1989) 4 sec 566
' .. relied on Para 18

(1994) 6 sec 479 relied on Para 21 c
(2008) 1 sec 382 relied on Para 22

(2008) 8 sec 369 relied on Para 22

(1969) 1 SCR 499 held inapplicable Para 24
D
t" (2001) 5 sec 85 held inapplicable Para 24
(2001) 5 sec 85 relied on Para 24
(2001) 4 sec 573 relied on Para 26
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 1538 E
of 2009

From the Judgement and Order dated 02.11.2007 of the
•" Hon'ble High Court of Jharkhand at Ranchi, in W.P. (T) No. 4693
of 2005.
F
WITH
Civil Appeal No. 1540 of 2009
S. Ghanesh, Shyam Divan, M.K. Dua, Gopal Jain, Nandini
Gore, Sonia Nigam, Kartik Bhatnagar, Manik Karanjawala, for G
the Appellants.
8.8. Singh, Rajesh Pathak, for the Respondent.
The Judgement of the Court was delivered by
H
258 SUPREME COURT REPORTS [2009] 4 S.C.R. -
I

A S.B. SINHA, J.
\
1. Leave granted.
.....
.~;, .....~.

2. These two appeals arising out of a judgment and order
dated 2.11.2007 rendered by the High Court of Jharkhand at
B Ranchi in Writ Petition (T) No. 4693 of 2005 were taken up for
hearing together and are being disposed of by this common
judgment.
-t
3. The factual matrix involved is not in dispute.
... '

c M/s Tata Iron & Steel Company Limited (TISCO) produces
steel. For the said purpose, it purchases oxygen gas from M/s
B.O.C. India Ltd. (BOC), the producer and supplier, for industrial
and medical use. BOC began supply of oxygen gas to TISCO
from the year 1993.
D Indisputably, TISCO applied for and was granted a
'-
\
registration certificate in terms of the provisions of Section
13(1 )(b) of the Bihar Finance Act, 1981 (hereinafter called and
referred to as, "the Act"). The said certificate originally was
granted on 16.3.1983. Indisputably, it was renewed from time
E to time; it covered the period in question, namely, 2001-02,
having been renewed till 31.5.2004.

Indisputably, in terms of the provisions of the Act and the
rules framed thereunder, a dealer is required to show the list of
goods which were taxable at 1% as also the list of those goods
F which were taxable at 3%. Oxygen was shown in the list of goods
taxable at 3% as specified in Annexure 'B' appended to the
registration certificate.
4. We may at this stage notice the relevant statutory
provisions, namely, Sections 13( 1)(b), 14 (2) and 54 of the Act,
G
wltich read as under : ,.
"13. Special rate of tax on certain sales or purchases.-
(1) Notwithstanding anything contained in this part but
subject to such conditions and restrictions as may be
H prescribed.
----
,
MIS BOC INDIA LTD. V. 259
STATE OF JHARKHAND & ORS. [S.B. SINHA, J.]

) (a) ... A
(b) Sales to or purchases by a registered dealer of
goodsrequired by him directly for use in the manufacture
or processing of any goods for sale.
14. Registration of dealers. (1) ... B
(2) Every dealer required by sub-section (1) to be in
possession of a registration certificate shall apply for the
•
~
same in the prescribed manner to the prescribed authority,
and the said authority shall, on being satisfied that the
application is in order, register the applicant and grant c
him a registration certificate within prescribed time in the
prescribed manner and in the prescribed form specifying
therein the goods or class or description of goods which
the dealer sells or purchase and such other particulars as
may be prescribed. D
t "
Provided that no application referred to in this sub-section . I

shall be considered and be deemed valid, unless the
applicant furnishes correctly all the prescribed particulars
and, such other particulars as may be required by the
prescribed authority in this behalf; E

Provided further that where a dealer required by sub-
. , section (1) to be in possession of a registration certificate .
•
applies for such a certificate within the prescribed time-
limit and in the prescribed manner and the application is F
otherwise valid in accordance with the first proviso of this
sub-section, he shall be deemed 'to be in possession of
a valid registration certificate from the date he so applied
for the purposes of exercising all the rights and performing
all the duties and bearing all the liabilities under this part G
and the rules made thereunder:
Provided also that where a dealer carries on any business
of sale or purchase of goods, in violation of the express
and specific provisions of any law of the State or the Union,
then notwithstanding anything to the contrary contained in H
260 SUPREME COURT REPORTS [2009] 4 S.C.R. --
A this part and without prejudice to his liability to pay tax, the .'
prescribed authority shall refuse to grant him a registration
certificate.
54. Furnishing of information by dealers.-

B If any dealer liable to pay tax under this part-

(a) disposes of his business or any part of his business,
whether by sale or otherwise, or
..
(b) acquires any business or part of any business, ~

c whether by purchase or otherwise, or

(c) effects any other change in the ownership or
constitution of the business, or
(d} discontinues his business or shifts his place of
business, or
D
(e) changes the name, style or nature of his business or
~
,
effects any change in the class or description of
goods which he sells, or
(f) starts a new business or joins another business either
E
singly or jointly with other persons, or

(g) effects any change in the particulars furnished in an
application made under Section 14 or declaration
furnished under Section 15,
F He shall, within seven days of the occurring of any of the
events aforesaid inform the prescribed authority
accordingly, and, if any such dealer dies without doing so,
his executor, administrator, successor-in-interest or legal
representative, as the case may be, shall within fifteen
G days of the dealer's death, inform the said authority
accordingly."
5. The State in exercise of its rule making power made
rules known as Bihar Sales Tax Rules, 1983. Rules 3(9), 6(1 )(b),
6(4) thereof read as under:
H
MIS BOC INDIA LTD. V. 261
STATE OF JHARKHAND & ORS. [S.B. SINHA, JJ

...( ; "3(9) (a) Every dealer to whom the provisions of section A
54 apply shall inform, in writing, the appropriate authority
prescribed in sub-rule (3) about the complete details
necessitating action under Section 54. .
(b) Where the information furnished by a dealer under
section 54 or otherwise received by the authority B
prescribed under sub-rule (3) necessitates amendment
of the registration certificate of the dealer the said authority
~ shall, where the dealer has not submitted the certificate·
~ for amendment, direct him to produce the certificate and .
he shall comply with such direction. On receipt of the c
certificate the said authority shall, after such verification
as may be necessary, amend the certificate suitably.
(c) Where the information furnished by a ·dealer under
Section 54 or otherwise received by the authority

,. prescribed in sub-rule (3) necessitates amendment in a D
declaration furnished under Section 15 the dealer shall
furnish to the said authority a revised declaration until such
revised declaration is furnished to the said authority the
original declaration shall continue to be deemed valid and
binding. E
6. Certificate under section 13.- (1) An application for
certificate under sub-section (1) of Section 13 shall be
~,,
made-
(a) .....
F
(b) In Form Ill, where the certificate is required for making
purchases covered by clause (b) or (c) of the said sub-
section, such application shall be made separately in
respect of every place of business;
(2) ........... G
(3) ...........
(4) (a) On receipt of an application in Form II or Ill if the
appropriate authority prescribed in clause (a) or (b) of
sub-rule (3), as the case may be, after verification of the H
262 SUPREME COURT REPORTS [2009] 4 S.C.R.

A. particulars furnished by the applicant or after making or
causing to be made such enquiry as it may deem
necessary, is satisfied that the application is in order, it
shall grant a :. ertificate in Form VIA or VIB, as the case
may be.
B (b) On receipt of an application in Form IV, if the Joint
Commissioner of the Division, after verification of the
particulars furnished by the applicant, or after making or
causing to be made such enquiry as he may deem
necessary, is satisfied that the application is in order he .
c shall, subject to the provisions of clause (a) of sub-rule
(6), grant to the applicant a certificate in Form VIC. A
copy of the certificate so granted shall also be sent
forthwith to the Commercial Taxes Officer in-charge of the
sub-circle, if the business is intended to be established
D
within the local limits of a sub-circle, and to the Deputy
Commissioner or Assistant Commissioner or Commercial
Taxes officer in charge of the Circle in other cases."
6. In terms of the said rules, application for grant of
E certificate is to be filed in Form Ill wherein inter alia particulars
of the goods which the dealer may be permitted to purchase at
special rate of tax in terms of clause (b) or (c) of sub-Section (1)
of Section 13 of the Act are required to be shown. A registration
certificate is granted in terms of Form VIB. Clause (3) whereof
F reads as under:
"(3) Particulars of the goods which the holder of the
certificate is permitted to purchase at special rate of tax;
under clause (b) or (c) of sub-section (1) of section 13.

G
Description of goods. Particular purpose for
which Required

1 2
"
H
M/S BOC INDIA LTD. V. 263
STATE OF JHARKHAND & ORS. [S.B. SINHA, J.]

_.. 7. Indisputably, the State from time to time issued several A
,,
notifications, one of such notification being dated 15.12.1976
in terms whereof tax at the rate .of three per centum was
prescribed in respect of the goods required directly for use in
manufacture. However, by reason of S.O. No. 604 dated
12.4.1982, the rate of sales tax on Industrial raw materials B
(inputs) payable under Section 13(1 )(b) of the Act was fixed at
one per centum. By a Notification being S.O. 1096 dated
,_ 9.9.1983, it was provided:
... "S.O. 1096 the 9th September, 1983- In exercise of the
powers conferred by sub-section ( 1) of Section 13 of the c
Bihar Finance Act, 1981 Part 1 (Bihar Act No. 5, 1981)
and in $Upersession of Finance (Commercial Taxes)
Department notification No. S.O. 604, dated the 12th April,
1982, the Governor of Bihar is pleased to direct that the
rate of sales tax payable under clause (b) of sub-section D
p " (1) of Section 13 of the said Act on the raw materials
required directly for use in the manufacture or processing
of goods for sale in the State or in course if inter-state
trade or commerce, excluding such raw materials which
have already undergone any manufacturing or production E
~
process and which are required for further assembly
therewith shall be at the rate of two per centum."

~ ; 8. Yet again, by reason' of S.O. 1_54 dated 3.2.1986 sales
tax on sale of the raw materials required directly for use in the
manufacture or processing of goods for sale excluding such F
raw materials which have already undergone any manufacturing
or production process and which are required for further
assembly therewith shall be at the rate of two per centum.
9. Concededly, TISCO never applied for amendment or ·
G

~~
• modification of the Registration Certificate. Oxygen gas
continued to be allowed to remain in Annexure 'B' of the
. Registration Certificate wherefor sales tax was payable at the
rate of three per centum. Indisputably again, till the Assessment
Year 2002-2003 for supply of oxygen gas to TISCO, BOC also
H
264 SUPREME COURT REPORTS [2009] 4 S.C.R.

A used to charge sales tax at the rate of three per centum.
However, the said purported mistake was sought to be rectified
..
by BOC in terms of the said Notification dated 3.2.1986
charging two per centum sales tax on the supplies of oxygen
gas made to TISCO. TISCO issued a declaration in terms of
B Form IX of the Rules. BOC also deposited tax at the rate of two
per cent on the sale of industrial gases to TISCO.

10. The Deputy Commissioner of Commercial Tax issued
a notice to BOC on or about 20.4.2005, stating: .}

"It is informed that you have deposited tax @ 2% on the ""
c
sale of industrial gases to M/s TISCO Ltd. Because the
Hon'ble Supreme Court has dismissed the SLP© No.
15419/2004, filed on your behalf, vide order dated
30.3.2005.
D Hence, you are directed to produce the evidence before
>
the undersigned of deposit of the balance admitted tax of
'
Rs.1,02,45,572/- by 20.5.2005, otherwise the proceedings
for imposition of penalty will be initiated against you u/s
16(9) of Bihar Finance Act, 1981 as adopted by Jharkhand"
E Another notice dated 29.6.2005 was also issued, stating:
"In spite of informing you by this office's letter No. 188
dated 20.4.2005 the balance amount of Rs.1,02,45,572/
- being admitted tax has not been deposited by you till
date.
\ .
F
Again, you are directed to produce the evidence before
the undersigned of deposit of the balance admitted tax of
Rs.1,02,45,572/- by 15. 7 .2005, otherwise the proceedings
for imposition of penalty will be initiated against you u/s
16 (9) of Bihar Finance Act, 1981 as adopted by
G
Jharkhand." ~

11. BOC in its letter dated dated 15.7.2005, addressed to ·.-
the Deputy Commissioner, Commercial Taxes, Jamshedpur
Circule, Jamshedpur, stated :
H

•
M/S BOC INDIA LTD. V. 265
STATE OF JHARKHAND & ORS. [S.B. SINHA, J.]

- "After receiving the said letter/notice dated 29.06.05, we A
had taken up the matter with Tata Steel i.e. our purchaser
who is the registered dealer for purchasing of the said
Industrial Gases including Oxygen. It has been informed
by Tata Steel that the Tata Steel is using those industrial
gases including oxygen as their raw material for B
manufacturing of steel products and is covered under
Notification S.O. No.1096 dated 09.09.83, hence the
¥
concessional rate of sales tax @ 2% is applicable. This
has already been informed earlier by them vide their letter
No. ACCTS/ST/990/115/05 dated 31.05.05 (copy c
enclosed) explaining the matter in this context. For paying
the concessional rate of sales tax against supply/sale of
Industrial Gases including Oxygen to Tata Steel, Tata Steel
has submitted Form IX for availing the concessional rate
of sales tax against supply of such industrial gases including
D
oxygen, a copy of which is enclosed herewith.
,"
In view of the above, we request you to withdraw your
letter No. 2137 dated 29.06.05 demanding differential rate
of tax @ 1% totaling to Rs.1,02,45,572/- and drop the
case accordingly." E
The demand was again raised on BOC by the Deputy
Commissioner of Commercial Taxes, Jamshedpur Circle,
I Jamshedpur by its letter dated 22.7.2005 opining that TISCO
. was liable to pay concessional purchase tax at the rate of three
per cent on Oxygen gas. BOC was, therefore, directed to F
produce the evidence of deposit of the balance differential
amount of Rs.1,02,45,572/- by 18.8.2005 failing which other
modes of recovery would be adopted.
12. Questioning the validity and/or legality of the said
G
notice, a Writ Petition was filed before the High Court of
Jharkhad at Ranchi, which by reason of the impugned judgment
has been dismissed, holding that BOC has no locus standi to
file writ petition as admittedly tax was payable by TISCO; being
authorized to purchase at the concessional rate of three per
H
266 SUPREME COURT REPORTS [2009] 4 S.C.R.

A cent and not at the rate of two per cent and, thus, the demand
made by the respondent was unassailable, the selling dealer
.......
being bound by the certificate granted to it under Section 13(1 )(b)
of the Act. It was also held that whether oxygen gas is a raw
material or not cannot be decided/determined in writ application
B filed by BOC as TISCO alone is competent to explain to the
prescribed authority as to how, which had all along treated and
mentioned as goods as per Annexure 'B', could be treated as
raw material. In view of the order of this Court in the case of Tata >
Iron & Steel Co. Ltd. vs. State of Jharkhand & ors. [(2005) 4
c sec 272], the writ petition was also held to be not maintainable
as TISCO cannot take a different stand to the effect that oxygen
gas was used by it as a raw material.
It was furthermore held:
"As per the registration certificate issued under Section
D
13( 1)(b) of the Act, Oxygen Gas was treated as goods as .
mentioned in Annexure - B. Endorsing the same, the '
purchasing dealer has been paying the tax at the
concessional rate of 3% for a long number of years treating
Oxygen Gas as goods. The selling dealer is bound by the
E said certificate. Accordingly, he has been collecting sales
tax @ 3% from the beginning till 2000 and thereafter he
started collecting sales tax @ 2% treating the same as
raw material. Neither the purchasing dealer, nor the selling
dealer can decide the nature of the goods on their own,
\ .
F unless the certificate is modified by the prescribed authority
to that effect, treating Oxygen Gas as raw material, on
being approached by purchasing dealer. The purchasing
dealer has to pay sales tax @ 3% treating Oxygen Gas as
goods mentioned in Annexure - B and the selling dealer
G has to merely collect and deposit the same as per the
certificate with the Government. Unless it is established
before the prescribed authority, which, in turn, will decide
the nature of the goods, the purchasing dealer cannot
claim payment of sales tax at the concessional rate of 2%
H treating Oxygen Gas as raw material under the garb of the
M/S BOC INDIA LTD. V. 267
STATE OF JHARKHAND & ORS. [S.B. SINHA, J.]

two notifications dated 9.9.1983 and 3.2.1986. Therefore, A
y< • demand notices are perfectly justified."
13. Mr. S. Ganesh, learned Senior Counsel appearing on
behalf of BOC and Mr. Shyam Divan, learned Senior Counsel
appearing on behalf of TISCO would contend:
- 8
i. As oxygen gas is injected to the furnace through lance
directly as would appear from diagram mentioned in
Encyclopaedia Britannica, there cannot be any doubt

.
~

whatsoever that it is used as a raw material for the
"""' purpose of manufacture of steel. c
ii. Basic Oxygen Steelmaking (BOS) being a method
of steelmaking in which carbon-rich molten iron is
made into steel as by blowing oxygen through molten
pig iron, the carbon content of the alloy is lowered
and changes the material into low-carbon steel as D
,
-J.
would appear from the Wikipedia, the impugned
judgment cannot be sustained.
iii. For the purpose of arriving at a finding as to whether
a material used for a finished product would be a
raw material or not, it is not necessary that the item E
should continue to remain a part of the finished
product as even in a case where it has been burnt
down in the chemical process required for
• manufacturing the end product, the same would
continue to be a raw material. F

iv. Section 13(1 )(b) of the Act read with the notification
providing only for the conditions that the assessee
must sell raw-material to a registered dealer; and it
must be used for processing/manufacturing of goods
G
meant for sale; BOC, being the assessee, is not
concerned as to whether in the registration certificate
issued to TISCO, oxygen gas has been shown in
Annexure 'A' or Annexure 'B'
v. BOC being an assessee having been made liable H
268 SUPREME COURT REPORTS [2009) 4 S.C.R.

A to pay tax had the requisite locus standi to maintain ~

the writ application. .'
vi. Special Leave Petition filed by TISCO questioning
the applicability of industrial policy, the decision of
this Court in Tata Iron & Steel Co. Ltd. vs. State of
B Jharkhand & ors. [supra] cannot have any application
in the instant case as payment of tax being governed
by notification, the principles of res judicata and/or
estoppel would not apply. ).

14. Mr. B.B. Singh, learned counsel appearing on behalf • •
c of the respondents, on the othe; hand, would contend:
i. The procedure for claiming special rate of tax on all
materials and/or on raw materials having been
provided for in the Act and/or Rules framed
D thereunder, the same were required to be complied
with by the assessee for claiming the benefit thereof. \...
'
ii. TISCO which is a consumer of oxygen gas having
never raised any contention that the rate of tax in
respect of oxygen would be two per cent and not
E three per cent, BOC cannot be said to have any
locus standi to plead the case ofTISCO as ultimately
the liability would be that of latter.
iii. The procedure laid down in the Act as also the rules
framed thereunder being mandatory in nature, it was
F obligatory on the part of the TISCO to comply with
requirements of the provisions thereof scrupulously.
iv. TISCO having not challenged the demand made by
the authorities by way of a writ petition, the Special
Leave Petition filed by it is not maintainable.
G
15. We may, at the outset, place on record that since Mr.
B.B. Singh conceded that the decision of this Court in Tata Iron
& Steel Co. Ltd. vs. State of Jharkhand & ors. [supra] has no
application to the issues involved herein, we are not called upon
to deal therewith.
H
M/S BOC INDIA LTD. V. 269
STATE OF JHARKHAND & ORS. [S.B. SINHA, J.]

.,,... 16. BOC admittedly is the manufacturer of oxygen gas. It A
is a dealer within the meaning of the provisions of the Act being
a supplier of its product. It, thus, comes within the purview of
'dealer' as contained in Section 2(e) of the Act as it carries on
the business of buying, selling, supplying or distributing goods
for cash or for deferred payment or for commission, B
remuneration or other valuable consideration. It is an assessee.
It even as an agent of the State is bound to collect taxes on its
behalf and deposit the same in accordance with law. Non-
•
" compliance thereof would lead to penal actions. Even in the
demand made by the Deputy Commissioner, Commercial c
Taxes, Jamshedpur Circle, Jamshedpur dated 22. 7.2005 it was
threatened with proceedings for recovery of the differential
amount unless it produced the evidence of deposit thereof.

17. Thus, a demand has been made on BOC. Hence, the
,_, opinion of the High Court that it did not have any locus standi to D
maintain the writ application cannot be accepted. It may be true
that the consumer of oxygen gas is TISCO. It was also entitled
to purchase the said goods at a concessional rate. If the material
is used for manufacture, the rate of tax is three per cent whereas
if the material is used as raw material for processing and/or E
manufacturing of the end product, indisputably, the rate of tax
would be two per cent. Ultimately, BOC may be entitled to
.' recover the differential amount of tax from TISCO, but, the same
by itself would not mean that it is a busybody. Not only the penal
proceedings but also other proceedings could be initiated F
against it for non-deposit of the aggregate amount of tax within
the prescribed period. If an order of assessment is passed
against the assessee, the only remedy before it is to prefer an
appeal/revision in terms of the provisions of the Act. Thus, in
our opinion, it was a person aggrieved to maintain a writ
G
application.
18. In the matter of The Trade Mark No. 70,078 of Wright,
Crossley, and Co. (1898) 15 RPC 131, it was stated:
"I think, notwithstanding what was said in that case, and
H
270 SUPREME COURT REPORTS (2009) 4 S.C.R.

A has been said in other cases dealing with Trade Marks , ..
that an applicant in order to show that he is a person
aggrieved, must show that in some possible way he may
be damaged or injured if the Trade Mark is allowed to
stand; and by 'possible' I mean possible in a practical
B sense, and not merely in a fantastic view.

[See Kabushiki Kaisha Toshiba vs. TOSIBA Appliances
Co. and Ors. [2008 (8) SCALE 354)
19. If it is to be held that the assessee is a person aggrieved
c to question the validity of the demand raised on it, it will have
the locus standi to maintain a writ petition.

20. The expression "raw material" is not defined. It has to
be given its meaning as is understood in the common parlance
of those who deal with the matter.
D
Oxygen gas when used would admittedly be burnt up.
Would it mean that it ceases to be a raw material is the question?

In Collector of Central Excise, New Delhi vs. Mis Bal/arpur
Industries Ltd. [(1989) 4 SCC 566) on which reliance has been
E placed upon, Venkatachaliah, J. (as His Lordship then was)
speaking for a bench was considering a case where the input
of sodium sulphate in the manufacture of paper was held to
continue to be a "raw material" by reason of the fact that in the
course of the chemical reactions this ingredient is consumed
F and burnt up, holding:

"14. The ingredients, used in the chemical technology of
manufacture of any end-product might comprise, amongst
others, of those which may retain their dominant individual
identity and character throughout the process and also in
G the end-product; those which, as a result of interaction
with other chemicals or ingredients, might themselves
undergo chemical or qualitative changes and in such
altered form find themselves in the end-product; those
which, like catalytic agents, while influencing and
H accelerating the chemical reactions, however, may
M/S BOC INDIA LTD. V. 271
STATE OF JHARKHAND & ORS. [S.B. SINHA, J.)

themselves remain uninfluenced and unaltered and remain A
independent of and outside the end-products and those,
as here, which might be burnt-up or consumed in the
chemical reactions. The question in the present case i
whether the ingredients of the last mentioned class qualify
themselves as and are eligible to be called "Raw-Material" B
for the endproduct. One of the valid tests, in our opinion,
could be that the ingredient should be so essential for the
'I chemical processes culminating in the emergence of the
.. desired end-product, that having regard to its importance
"'"\ in and indispensability for the process, it could be said c
that its very consumption on burning-up is its quality and
value as raw-materials. In such a case, the relevant test is
not its absence in the end-product, but the dependence of
the end-product for its essential presence at the delivery
end of the process. The ingredient goes into the making
~
D
~
of the end-product in the sense that without its absence
the presence of the end-product, as such, is rendered
impossible. This quality should coalesce with the
requirement that its utilisation is in the manufacturing
process as distinct from the manufacturing apparatus."
E
21. Yet again, in the case of Tata Engineering &
Locomotive Company Limited vs. State of Bihar & Anr. [(1994)
6 SCC 479], this Court while interpreting the provisions of
• Section 13(1 )(b) of the Act itself, held that batteries, tyres and
tubes which are by themselves finished products would be raw- F
material when they are fitted in a vehicle, stating:
"What requires consideration, therefore, is whether items
such as tyres, tubes, batteries etc. purchased by the
appellant for use in the manufacture of vehicles which are

-< • otherwise finished products could avail of concessional G
rate of tax at 1%. That would depend on the construction
and understanding of the expression 'industrial raw-
material (inputs)' used in the Notification. The word 'raw-
material' has not been defined in the Act. It has, therefore,
--. to be understood in the ordinary and well accepted H
272 SUPREME COURT REPORTS [2009] 4 S.C.R.

A connotation of it in the common parlance of the persons
who deal with it. According to dictionary, it means
'something which is used for manufacturing or producing
the good'. The ordinary common sense understanding of
it is that it is something from which another new or distinct
B commodity can be produced."
22. Mr. 8.8. Singh, however, rightly pointed out that the
question as to whether the oxygen gas is a raw material or not
had not been raised before the Assessing Authority. For the "
first time, before this Court, a question of fact has been raised. •
~
c We cannot, for arriving at such a finding as to whether the same
is correct or not, rely on Wikipedia alone, on which reliance has
been placed.
{See Commissioner of Customs, Bangalore vs. ACER
India (P) Ltd. [(2008) 1 SCC 382] and Ponds India Limited vs.
D ~
Commissioner of Trade Tax, Lucknow [(2008) 8 SCC 369]} •
23. We do not know what are the manufacturing processes
involved and what role oxygen gas has to play in the matter of
manufacturing of steel. It is also not possible for us to base our
E decision solely on the basis of a diagram contained in
Encyclopaedia Britannica. Whether oxygen gas can be
considered to be a raw material is essentially a question of fact.
Evidence is required to be adduced. Such evidence although
may be in possession of TISCO. In the event, such a question is
F raised by the assessee, namely, BOC, the Assessing Authority
must go therein. For the purpose of claiming exemption from
payment of tax and/or special rate of tax applicable to a
particular gas or commodity or goods, the assessee itself must
bring on record sufficient materials to show that it comes within
the purview of the notification. Both in Mis Ballarpur Industries
G
Ltd (supra) and Tata Engineering & Locomotive Company
Limited [supra], the question as to whether sodium sulphate
• .,
and/or batteries, tyres, tubes were raw materials or not could
be determined by this Criurt as such a question had been raised
by the Assessing Authority.
H •·
M/S BOC INDIA LTD. V. 273
STATE OF JHARKHAND & ORS. [S.B. SINHA, J.)

) 24. We may, however, must place on record that we do A
not agree with Mr. B.B. Singh that the principle that as a procedure
has been prescribed in the statute, the same must be followed
r no benefit would be available to the assessee as is said to
have been held by this Court in Narbada Prasad vs. Chhagan
Lal & Ors. [(1969) 1 SCR 499] and in Kunwar Pal Singh (dead) B
by L.Rs. etc. etc. vs. State of UP & ors. [(2007) 5 sec 85).
The said decisions cannot have any application in the facts of
v the present case.
• In Narbada Prasad vs. Chhagan Lal & Ors [supra], this
Court was dealing with a matter concerning Representation of c
the People Act in regard to filing of an election petition as in the
election petition essential facts as specified. therein was
required to be pleaded in the manner laid down therein.

In Kunwar Pal Singh (dead) by L.Rs. etc. etc. vs. State of
D
... ~
UP & ors. [(2007) 5 sec 85], this Court was dealing with the
provisions of the Land Acquisition Act. Keeping in view the fact
that the same was barred by limitation, this Court held:
"The principle is well settled that where any statutory
provision provides a particular manner for doing a particular E
act, then, theat thing or act must be done in accordance
with the manner prescribed therefor in the Act."
4
• 25. For the self same reasons, we are of the opinion, that
it is not necessary to go into the question as to whether a person
even if he proves that he inadvertently did not claim the benefit F
of a notification would depend upon the facts and circumstances
of each case as no such rule in absolute terms can be laid down
therefor.
26. We may, however, notice that this Court in Share
G
Medical Care vs. Union of India & ors. [(2007) 4 SCC 573]
has opined as under:
"15. From the above decisions, it is clear that even if an
applicant does not claim benefit under a particular
notification at the initial stage, he is not debarred, H
274 SUPREME COURT REPORTS [2009] 4 S.C.R.

A prohibited or estopped from claiming such benefit at a
later stage."
27. For the reasons aforementioned, the impugned
judgment cannot be sustained. It is set aside accordingly. The
appeals are allowed. The demand made on the appellant is
8 also set aside. The question, as to whether the oxygen gas is a
raw material for the manufacture of steel or not may be
determined by the Assessing Authority on the basis of the
material(s), which may be brought on record by the parties. All
contentions raised by the parties on the said question shall •
C remain open. The Assessing Authority is hereby directed to give
an opportunity to the parties to adduce evidence in this behalf.
All other consequential proceedings may follow on the basis of
the determination on the said question.
In the facts and circumstances of the case, there shall be
0
no order as to costs.

D.G. Appeals allowed.