Commercial Taxes Officer, Circle D, Jaipur vs Rajasthan Electricity Board, Jaipur

1. We have read the principal judgment under appeal which is reported in [1980] 45 STC 201 (Raj) (Rajasthan State Electricity Board v. State of Rajasthan). We are of the view that the High Court was entirely right in the view that it took.

2. The High Court held that trucks, trolleys, trailers and the like, but not passenger vehicles, as also their accessories and spare parts, tyres and tubes could be purchased by the respondent-Board at the concessional rate of tax prescribed under Section 8(1) of the Central Sales Tax Act, 1956, and that, to make things clear, the respondent-Board was entitled to have its registration certificate altered to include "tools and plants, including vehicles and other transportable goods, including their spare parts, tubes and tyres". The respondent-Board is engaged in the business of generation and distribution of electricity. What is used in the distribution of electricity or intended for such use falls within the scope of Section 8(3)(b) read with Rule 13 of the Centra1 Sales Tax (Registration and Turnover) Rules, 1957.

3. In so far as soaps, paints and varnishes are concerned, the High Court rightly upheld the finding of the Board of Revenue that they were permissible only in so far as they were intended to be used for the purpose of cleaning boilers and machinery and other equipment and for the purpose of painting machinery and electrical goods. Raincoats could be purchased at the concessional rate of tax so far as they were necessary for the use of linesmen working on transmission lines during the rainy season and winter; similarly, battery cells to the extent they were necessary for use by linesmen for working on transmission lines during the night.

4. Learned Counsel for the appellant-State drew our attention to the judgment of this Court in J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. Sales Tax Officer, Kanpur . We do not find anything in that judgment that runs counter to the view taken by the High Court. It was held in J.K. Cotton Spinning & Weaving Milis' case that if a process or activity was so integrally related to the ultimate manufacture of goods so that without that process or activity manufacture may, even if theoretically possible, be commercially inexpedient, goods intended for use in the process or activity as specified in Rule 13 would qualify for special treatment. The motor vehicles aforementioned and soaps, paints, raincoats and battery cells, to the extent aforementioned, are integrally related to the distribution of electricity and their non-use would make distribution commercially inexpedient. In Travancore Tea Estâtes Co. Ltd. v. State of Kerala , what was in issue was the use of fertilizers in the manufacture of tea. This Court distinguished between the agricultural process of cultivation of tea and the subsequent manufacture or processing thereof to make it drinkable and held that the use of fertilizers was necessary only for the process of cultivation which ended with the harvest of the tea leaves. The judgment in Tata Engineering & Locomotive Company Ltd. v. State of Bihar , dealt with a notification that used language substantially different from that with which we are concerned and the judgment, therefore, is of no assistance to the case of the appellant.

5. The appeals are dismissed, with no order as to costs.