Madras High Court
M/S.Bhuvana Oil Corporation vs The Special Commissioner on 4 August, 2021
W.P.No.29348 of 2004
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Date : 04.08.2021
CORAM:
THE HON'BLE MR. JUSTICE S.M.SUBRAMANIAM
W.P.No.29348 of 2004 and
W.P.M.P.No.35634 of 2004
M/s.Bhuvana Oil Corporation
rep. by its Proprietor,
S.Gopalakrishnan,
32, Bhavani Main Road,
Erode 638 004. ... Petitioner
Vs.
1.The Special Commissioner,
Commissioner of Commercial Taxes,
Chepauk, Chennai - 5.
2.The Commercial Tax Officer, (FAC)
Chithode Circle, Erode. ... Respondents
Prayer : Petition filed under Article 226 of Constitution of India praying for
issuance of a Writ of Mandamus forbearing the respondents 1 and 2 from
levying and collecting 1% resale tax under Section 3-H of the Tamil Nadu
Government Sales Tax Act on the total turnover of the petitioner.
For Petitioner : Mr.P.Solomon Francis
For Respondents : Mr.V.Veluchamy
Government Advocate
1/7
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W.P.No.29348 of 2004
ORDER
The issue raised in this writ petition was adjudicated elaborately by
the Hon'ble Division Bench of this Court in the case of SGS Petro Organic
Limited Vs. Commercial Tax Officer, Ayanavaram Assessment Circle,
Chennai and others reported in 2013 SCC Online Mad 721.
2. It is brought to the notice of this Court that the S.L.P. filed against
the said judgment of the Hon'ble Division Bench was also dismissed by the
Hon'ble Apex Court of India. Thus, the order passed by the Hon'ble Division
Bench is to be followed for the purpose of disposing of this writ petition.
The relevant paragraphs of the judgment of the Hon'ble Division Bench
reads as under:
"18. The Committee, while making its
recommendations, has opined as follows:-
"3. The Committee find that there is a big difference
between the selling price of SKO and HSD (High Speed
Diesel) ranging from Rs.3.76 to Rs.7.26 per litre. This wide
difference is the basis cause of misuse of SKO. The
Committee are of the opinion that this difference should be
bridged. Apart from raising customs duty the Committee
recommend that the State Governments should impose sales
tax to such an extent that the difference between rolling price
of SKO and HSD is marginal. . .
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W.P.No.29348 of 2004
4. Government through a notification have made it
mandatory for the public sector oil companies to colour the
kerosene blue meant for Public Distribution System (PDS).
Imported kerosene is of white colour and can easily be mixed
with diesel and even with petrol. The Committee are of the
opinion that the Government should make it mandatory to
colour the imported kerosene also with a colour different
from blue which is meant for PDS. "
19. The report consists of certain annexures.
Annexure-1I of the Report gives the details of the cases
registered for misuse of PDS kerosene & Superior Kerosene
Oil in automobiles as fuel. As per the said Annexure, about
15,065 litres of both PDS kerosene and SKO worth about
Rs.2,44,023/- and about 26 tanker lorries were seized in
2002, about 22,437 litres worth about Rs.3,68,866 were
seized in 2003 and upto 5.7.2003, 62 cases were registered
and about 37,502 litres worth about 6,12,889/- along with 64
vehicles were seized.
20. The aforesaid details make it crystal clear that the
misuse of PDS kerosene & Superior Kerosene Oil in
automobiles as fuel have been increasing from year to year.
In 2002 only 24 cases were registered, whereas in 2003 it
increased to 62 and in 2003 upto 5.7.2003, it gone to 64.
This would only infer that the persons engaged in misuse of
SKO and the kerosene meant for PDS are being increased
from time to time .
21. The aforesaid aspect has been highlighted in the
Budget Speech made on the Floor of the year 2003-2004.
Coming to know about the use of white Kerosene as a
substitute for Diesel Oil, besides causing more pollution and
damage to the engines, in order to curb the said practice, it
has been decided by the Government to increase the tax rate
for white Kerosene from 4% to 25%. But, the tax rate for PDS
Kerosene i.e. Blue Kerosene will however continue to remain
at 4%.
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W.P.No.29348 of 2004
22. The object of providing such concessional rate of
duty on kerosene used for illuminating burning oil lamps i.e.,
@ 4% was to provide some relief to those economically
backward sections of society who use kerosene for
illumination and other domestic purposes, and therefore, the
benefit of concessional rate of duty was available only on the
kerosene meant for PDS. On such consideration only the
kerosene which meant for Public Distribution System was
continue to remain taxed at 4%, whereas only the white
Kerosene which is meant for industrial purpose is taxed at
25%. It is brought to the notice of this Court that in a study
undertaken by the Southern Region of the Anti-Adulteration
Cell it was observed that "unimaginable quantities of white
kerosene are being imported for consumption by industrial
consumers and by the general public. It was also found that
the State Government suffers a heavy loss of revenue on
account of sales tax evasion as the sales tax on diesel is
around 28 per cent as against 13.8 per cent on SKO.
Considering all these factors along with the laudable
recommendations made by the Standing Committee and the
follow up steps taken by the State Government to curb the
misuse of kerosene meant for Public Distribution System, we
do not any see any illegality in imposing tax on white
kerosene meant for industrial purpose at 25%.
23. With regard to the writ appeals filed challenging
the individual order of assessment, we are in full agreement
with the learned single Judge in rejecting those matters as
they have been tied along with this batch only for considering
the legal issue involved and not the factual aspects raised
challenging the assessment order.
For the reasons stated above, the writ appeals fail and
the same are dismissed. Consequently, the connected
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W.P.No.29348 of 2004
miscellaneous petitions are closed. No costs."
3. As far as the writ petition filed against the notice is concerned, the
Assessee is at liberty to submit his objections/explanations and participate in
the process of proceedings to be completed. Regarding the Assessment
Order passed, the Assessee is at liberty to prefer an appeal, if any other
grievance exist, except the issues which were concluded in the judgment of
the Hon'ble Division Bench of this Court cited supra.
4. With these observations, this Writ Petition is disposed of. No costs.
Consequently, connected miscellaneous petition is closed.
04.08.2021
Index : Yes/No
Speaking Order : Yes/No
Sgl
To
1.The Special Commissioner,
Commissioner of Commercial Taxes,
Chepauk, Chennai - 5.
http://www.judis.nic.in
W.P.No.29348 of 2004
2.The Commercial Tax Officer, (FAC)
Chithode Circle, Erode.
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W.P.No.29348 of 2004
S.M.SUBRAMANIAM, J.
Sgl
W.P.No.29348 of 2004
04.08.2021
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