Madhava Hi-Tech Cold Storage (P) Limited V. The Assistant Commercial Tax Officer (Registrations), Benz Circle, Vijayawada and Two others

WP/12058/2002

AI Insights

M/s. Madhava Hi-Tech Cold Storage (P) Limited filed a writ petition challenging the penalty imposed by the Assistant Commercial Tax Officer for allegedly misusing 'C' Declaration forms to purchase machinery for cold storage at a concessional tax rate. The petitioner argued that the storage of goods in cold storage constitutes processing, thereby qualifying for the concessional rate. However, the court, referencing various judgments, including those from the Supreme Court, found that mere storage does not amount to processing as it does not alter the physical or chemical composition of the goods. Consequently, the court upheld the penalty, dismissing the writ petition.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 799412 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 20-10-2022
• Assessment Year: misc
• Other Referred Cases: 107 ITR 816, 1992 SCC OnLine Ori 369, AIR 1981 SC 1014, (1980) 126 ITR 66 (Cal), 1985 156 ITR 97 (Delhi), AIR 1991 SC 2125
• Laws Referred To: Central Sales Tax Act, 1956
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: T C D SEKHAR
• Assessee Lawyers: MV K MOORTHY
• Keywords: Central Sales Tax Act; Cold Storage; Penalty; Processing of Goods; Writ of Certiorari
• Section: 10(a); 8(3)(b)

Judgement Text

"IN THE HIGH COURT OF ANDHRA PRADESH: AT AMARAVATI *** Writ Petition No.12058 of 2002 Between: M/s.Madhava Hi-Tech Cold Storage (P) Limited, M.G. Road, Vijayawada, Rep. by its Managing Director, Mr. N. Madhava Rao, S/o. Poornachandra Rao, aged about 53 years. …. Petitioner And 1) The Assistant Commercial Tax Officer (Registrations) Benz Circle, Vijayawada, Krishna District & Two others. ….Respondents. Date of Order pronounced on : 20.10.2022 THE HON’BLE SRI JUSTICE C. PRAVEEN KUMAR AND THE HON’BLE SRI JUSTICE A.V. RAVINDRA BABU 1. Whether Reporters of Local newspapers : Yes/No may be allowed to see the judgments? 2.Whether the copies of judgment may be marked: Yes/No to Law Reporters/Journals: 3.Whether the Lordship wishes to see the fair copy : Yes/No of the Judgment? ________________________________ JUSTICE C. PRAVEEN KUMAR CPK, J & AVRB,J W.P.No.12058 of 2002 2 * THE HON’BLE SRI JUSTICE C. PRAVEEN KUMAR AND THE HON’BLE SRI JUSTICE A.V. RAVINDRA BABU + Writ Petition No.12058 of 2002 % 20.10.2022 # M/s.Madhava Hi-Tech Cold Storage (P) Limited, M.G. Road, Vijayawada, Rep. by its Managing Director, Mr. N. Madhava Rao, S/o. Poornachandra Rao, aged about 53 years. …. Petitioner And $ 1) The Assistant Commercial Tax Officer (Registrations) Benz Cuircle, Vijayawada, Krishna District & Two others. ….Respondents. ! Counsel for the Petitioner : Sri M.V.K. Moorthy, Learned Senior Counsel. Counsel for the Respondents: Sri T.C.D. Sekhar Government Pleader for Commercial Tax. Head Note: ? Cases referred: 1) 107 ITR 816 2) 1992 SCC OnLine Ori 369 : (1992) 87 STC 359 3) AIR 1981 SC 1014 4) (1980) 126 ITR 66 (Cal) 5) 1985 156 ITR 97 (Delhi) 6) AIR 1991 SC 2125 CPK, J & AVRB,J W.P.No.12058 of 2002 3 THE HON’BLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HON’BLE SRI JUSTICE A.V. RAVINDRA BABU Writ Petition No.12058 of 2002 ORDER:- (per the Hon’ble Sri Justice C. Praveen Kumar) The present writ petition came to be filed, seeking issuance of Writ of Certiorari declaring the proceedings of the Assistant Commercial Tax Officer, dated 16.06.2002, in G.I.No.7206/2000-01 and in Rc.No.JA4/741/2000-01 imposing penalty under Section 10-A of the Central Sales Tax Act, 1956 [for short, “the CST Act”] in respect of machinery brought for installation of Cold Storage from other States by furnishing Declarations in form ‘C’ which were incorporated in the Certificate of Registration under the CST Act, dated 08.11.2000 as illegal, improper and incorrect. 2. The facts, in issue, are as under:- (a) The petitioner, who is a Dealer under the provisions of the State and Central Sales Tax Act, 1956, was issued a Certificate of Registration under the Central CPK, J & AVRB,J W.P.No.12058 of 2002 4 Act on 08.11.2000. The said Certificate includes several commodities namely Tamarind, Jaggery, General Goods, Garlic, Chillies, Soap Nuts and also a hand written Endorsement stating “machinery for own use” for purchase from dealers outside the State. (b) It is stated that the petitioner constructed a Cold Storage Plant for maintaining and preserving the required temperatures for storage of various commodities. It is the case of the petitioner that pursuant to the Certificate of Registration, he was permitted to purchase various commodities noted therein for resale or for use in processing, at a concessional rate of Tax @ 4%, by furnishing ‘C’ declaration forms, from other States. It is said that the petitioner placed orders with the dealers, who are outside the State, for purchase of Refrigerator machinery, which includes cooling systems, by paying concessional rate of Tax, on furnishing the ‘C’ Declaration forms, issued by the second respondent. The said machinery is being purchased for installation in his Cold Storage Plant and accordingly issued ‘C’ Declaration forms to the selling dealers in other States. CPK, J & AVRB,J W.P.No.12058 of 2002 5 (c) While things stood thus, the first respondent herein issued a Show Cause Notice on 25.01.2002 alleging that the petitioner has misused the Declaration Forms and thereby contravened the provisions of Section 10-A read with Section 8(3)(b) of the CST Act, attracting Penal action and proposed to levy penalty of Rs.12,29,544/- equivalent to 1½ times the differential tax. Objections came to be filed by the petitioner company on 05.02.2002. After considering the material available on record, an order came to be passed on 08.02.2002 levying penalty @ 1½ times the differential tax. (d) It is the case of the petitioner that the grounds raised by the petitioner were never considered by the authority. Aggrieved by the Order, dated 08.02.2002, the petitioner filed W.P.No.5097 of 2002 before this Court, which was disposed on 01.04.2002 setting aside the Proceedings dated 08.02.2002, with a direction to the petitioner to place all the relevant material in support of its claim before the authority and that an order may be passed after giving an opportunity of hearing. Pursuant thereto, the petitioner herein appeared before the first respondent on 15.04.2002 and submitted his documents and CPK, J & AVRB,J W.P.No.12058 of 2002 6 arguments. However, the first respondent issued another Show Cause Notice on 16.05.2002, to which, the petitioner filed a detailed objections on 20.05.2002 questioning the penalty imposed. However, the first respondent issued the impugned proceedings dated 18.06.2002, confirming the penalty as done in the order dated 08.02.2002. (e) Challenging the same, the present writ petition came to be filed stating that the order impugned is contrary to law laid down in the judgment of the Hon’ble Supreme Court. 3. A counter came to be filed by the first respondent, denying the allegations made in the affidavit filed in support of the writ petition. It is stated that against the penalty order, an appeal would lie under Section 19 of the A.P.G.S.T. Act to the Appellate Deputy Commissioner, Vijayawada. But, the petitioner without availing the statutory remedy filed the present writ petition. Further, the objections raised by the petitioner are devoid of any merit, for the reason that no processing would be involved in the Cold Storage plant and the goods preserved in the Cold Storage plant will not undergo any physical change CPK, J & AVRB,J W.P.No.12058 of 2002 7 when stored and sold at a subsequent date, after taking them out from storage plant. It is further stated that the processing envisaged under Section 8(3)(b) of CST Act is totally different from the so called processing that is alleged to be undertaken by the petitioner. Further, Cold Storage unit cannot be regarded as manufacturing unit to be eligible for purchase of goods from dealers outside the state against ‘C’ form. It is stated that the petitioner has taken this recourse or plea only to approach the Court without exhausting statutory remedy. 4. Dr. Sri M.V.K. Moorthy, learned Senior Counsel, appearing for the petitioner, mainly submits that the proceedings issued by the first respondent that the storage of goods in the Cold Storage does not amount to processing or manufacturing of a new article, as the goods stored therein do not undergo any physical change, is improper and incorrect. He further submits that pursuant to the Certificate of Registration and taking into consideration the commodities referred to in the said Certificate, the petitioner issued ‘C’ Declaration forms for purchase of goods enumerated in the Certificate of Registration, issued by the second respondent, and as such, it cannot be said CPK, J & AVRB,J W.P.No.12058 of 2002 8 that there was any fraud or any misrepresentation while importing the goods. 5. Learned Senior Counsel further submits that the words “machinery for own use” as reflected in the Certificate of Registration, wide enough to include the cooling machinery systems, which are capable of falling within the widest amplitude of the expression of “machinery”. Learned Senior Counsel further submits that when machinery for installation of Cold Storage was included by the first respondent himself in the Certificate of Registration, it cannot be said that the petitioner made a false representation to other State Dealers in relation to purchase of such machinery at the concessional rate. 6. Learned Senior Counsel took us through the judgment of Allahabad High Court in Additional Commissioner of Income Tax vs. Farrukhabad Cold Storage1 to show that the expression “Processing” as used under the Income Tax Act is also similar and analogous to the expression “Processing” used in Section 8(3)(b) of the CST Act and hence, the argument of the learned 1 107 ITR 816 CPK, J & AVRB,J W.P.No.12058 of 2002 9 Government Pleader that no processing is involved while items are stored in a Cold Storage, may not be correct. 7. Having regard to the above circumstances, learned Senior Counsel, appearing for the petitioner would submit that the order under challenge is liable to be set aside and consequently, the writ petition has to be allowed. 8. Sri T.C.D. Sekhar, learned Government Pleader for Commercial Tax, appearing for the respondents, vehemently opposed the same, contending that a reading of the order impugned would make it clear that the petitioner herein has made a false representations, since the Certificate of Registration does not refer to items for which ‘C’ forms are issued namely (1) Refrigeration Machinery and Equipment and its spare parts, (2) Electrical Motors and Pumps, (3) All types Valves, (4) Goods lift, (5) Generator and (6) Aluminum Sheets etc. Such being the position, bringing all these items under “machinery for own use” would be improper. He further submits that if really, the authorities permitted the petitioner to purchase the machinery for Cold Storage, the same would have been incorporated specifically in the ‘C’ Declaration forms. In CPK, J & AVRB,J W.P.No.12058 of 2002 10 the absence of the same, it cannot be presumed that whatever has been imported by the petitioner from other States would get covered under the ‘C’ Declaration forms. He further submits that, the Managing Director himself while filing an application for registration under APGST & CST Acts have given an undertaking in the letter, dated 01.11.2000, that they only do trading in commodities such as Jaggery, Tamarind, Garlic, Soap Nuts, Red Chillies etc. in bulk. Hence, pleads that ‘C’ Declaration forms have been misused by the petitioner. 9. In other words, the arguments of the learned Government Pleader appears to be that the Cold Storage Units cannot be categorized as manufacturing units, so as to make them eligible for utilization of ‘C’ forms. The activity cannot be treated as, processing of goods, since the goods stored in the cold storage unit do not undergo any change, so as to make them separate and distinct commercial commodities. Learned Government Pleader took us through Sections 10(A)(1) and 8(3)(b) of the CST Act to contend that the objections raised by the learned counsel for the petitioner are not maintainable and the CPK, J & AVRB,J W.P.No.12058 of 2002 11 authorities have rightly levied penalty in view of Section 10(A)(1) of the CST Act. 10. The point that arises for consideration is, whether the authority was right in imposing the penalty on the petitioner? 11. Before proceeding further, it is to be noted that the Certificate of Registration was issued by the Assistant Commercial Tax Officer, Vijayawada. The second page of the Certificate of Registration, refers to description of articles for Resale. They are Tamarind outside State, Tamarind within State, Jaggery, General Goods, Garlic and Chillies. Apart from that, the Certificate also refers to the word “machinery for own use”, written manually. An undertaking given by the petitioner would show that they purchase and preserve the goods in a Cold Storage and sell them in the market as per the requirement and demand. They also furnished the names of commodities required to be purchased from outside the State. They are as under: 1) Refrigeration Machinery and Equipment and its spare parts. 2) Electrical Motors and Pumps. 3) All types Valves. 4) Goods lift. CPK, J & AVRB,J W.P.No.12058 of 2002 12 5) Generator. 6) Aluminium Sheets. But, while issuing the Certificate of Registration under the CST Act, all the above mentioned items were not included in the registration certificate, permitting them to purchase against ‘C’ Declaration forms either for resale or use in manufacture or processing of goods for resale. 12. After obtaining the registration, the petitioner made an application on 20.11.2000 along with a letter, dated 24.11.2000, to the Commercial Tax Officer, Vijayawada, requesting issuance of Ten ‘C’ Forms stating that they have to be issued to the dealers outside the State for purchase of plant and machinery and other items required for Cold Storage plant. Though, initially the same was rejected, but following the directions of Commercial Tax Officer, eight ‘C’ Forms were issued on 04.10.2001. The verification made by the Assessing Authority discloses that they have issued ‘C’ Forms to outside State dealers against purchase of plant and machinery. 13. It is the case of the respondents that though the said items were not included in the Certificate of Registration CPK, J & AVRB,J W.P.No.12058 of 2002 13 under the CST Act, ‘C’ forms were issued, which amounts to obtaining goods by false representation. 14. The question now is, whether purchase of machinery by using the ‘C’ forms would amount to false representation and whether there is any processing of items stored in Cold Storage? 15. In order to appreciate the same, it would be necessary for us to refer to Section 8(3)(1)(b) and Section 10(d) of the CST Act, which read as under:- “Section 8(3) The goods referred to in Sub-Section(1) _(b) are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re-sale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or [in the tele-communications network or] in mining or in the generation or distribution of electricity or any other form of power. Section 10(d):- If any person, after purchasing any goods for any of the purposes specified in clause (b) or clause (c) or clause (d)] of sub-section (3) or sub- section (6)] of section 8 fails, without reasonable excuse, to make use of the goods for any such purpose.” CPK, J & AVRB,J W.P.No.12058 of 2002 14 17. A reading of Section 8(3) of the CST Act, which has been relied upon by learned Government Pleader as well, would show that the goods referred to Clause (b) of Sub Section (1) of the Section 8 of the CST Act, are goods of the class or classes specified in the Certificate of Registration of the registered dealer purchasing the goods as being intended for re-sale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or [in the tele-communications network or] in mining or in the generation or distribution of electricity or any other form of power. 18. Having regard to the above, learned Senior Counsel would submit that since an element of processing of goods is involved due to storage of products referred to in ‘C’ forms, the action of the authorities in imposing penalty is not be proper, as there is no false representation. 19. Section 10(d) of CST Act, deals with the situation where a purchasing dealer in order to have the concessional rate applied to an inter-State sale in terms of Section 8(3)(b) of CST Act, without reasonable excuse, uses the goods purchased for a purpose other than, and CPK, J & AVRB,J W.P.No.12058 of 2002 15 contrary to, the declared purpose. The use of the expression “without reasonable excuse” in Section 10(d) of CST Act amply reflects the legislative intent that mens rea is an essential ingredient of the offence, observed in Jayshree Chemicals Limited vs. Additional Commissioner of Sales Tax, Orissa2. Mens rea appears to be a necessary ingredient to be established for prosecution and imposing of punishment under Section 10 of CST Act, for imposing penalty under Section 10(a) of CST Act also. In the instant case, penalty came to be imposed invoking the provision under Section 10(a)(1) of the CST Act. The Registration Certificate issued in Form- B, under CST Act, refers to certain commodities and also include “machinery for own use”. There is no reference in the said certificate to Refrigeration Machinery and Equipment and its spare parts, Electrical Motors and Pumps and goods lift etc. 20. The contention of the dealer appears to be that refrigeration plants and other goods intended for Cold Storage came to be purchased by issuance of ‘C’ Forms and the same are intended for processing of goods as reflected 2 1992 SCC OnLine Ori 369 : (1992) 87 STC 359 CPK, J & AVRB,J W.P.No.12058 of 2002 16 in Section 8(3)(1)(b) of CST Act. In other words, the argument of learned counsel for the petitioner appears to be that since there is an element of processing of items stored in Cold Storage, imposing penalty under Section 10(a) is bad in law. Learned Senior Counsel relies upon the judgment of Allahabad High Court in Farrukhabad case [cited 1 supra] and Chowgule & Company Private Limited and another vs. Union of India and others3 in support of his plea that any items stored in the Cold Storage undergo a process before it is sold again. Before dealing with the judgment of Allahabad High Court, it would be appropriate to refer to the judgment of Hon’ble Supreme Court in Chowgule & Company [cited 3rd supra], wherein it was observed as under:- “xxxx The assessee dealer was carrying on the business of mining iron-ore and selling it in the export market after dressing, washing, screening and blending it. The entire activity of the assessee was broadly divisible into seven different operations, one following upon the other, namely, (i) extraction of ore from the mine; (ii) conveying the ore to the dressing plan; (iii) washing screening and dressing the ore; (iv) conveying of the ore from the mine site to the riverside; (v) transport of the ore from the riverside to the harbour by means of barges; (vi) stacking of the ore at the harbour in different stock piles according to its physical 3 AIR 1981 SC 1014 CPK, J & AVRB,J W.P.No.12058 of 2002 17 and chemical composition; and (vii) blending of the ore from different stock piles with a view to producing or of the required specifications and loading it into the ship by means of the mechanized ore handling plant. The questions that arose for consideration were (1) Whether the blending of ore whilst loading it in the ship by means of the mechanical ore handling plant constituted manufacture or processing of ore for sale within the meaning of section 8(3)(b) and rule 13; and (2) Whether the process of mining, conveying the mined ore from the mining site to the riverside, carrying it by barges to the harbour and then blending and loading it into the ship through the mechanical processing of ore for sale, so that the items of goods purchased for use in every phase of this integrated operation could be said to be goods purchased for use in mining and manufacturing or processing of ore for sale falling within the scope and ambit of section 8(3)(b) and rule 13 so as to attract the lower rate of sales tax under Section 8 (1)(b).” In Paragraph 6 of the above said judgment, the Hon’ble Supreme Court, while framing an issue as to whether the Ore blended in the course of loading through the Mechanical Ore Handling Plant can be said to have undergone processing, held as under:- “6.xxxx The answer to this question depends upon what is the true meaning and connotation of the word “Processing” in Section 8(3) (b) and Rule 13. This word has not been defined in the Act and it must therefore be interpreted according to its plain natural meaning. Webster’s Dictionary gives the following meaning of the word “process”; “to subject to some special process or CPK, J & AVRB,J W.P.No.12058 of 2002 18 treatment, to subject (especially raw material) to a process of manufacture, development or preparation for the market etc., to convert into marketable form as livestock by slaughtering, grain by milling, cotton by spinning, milk by pasteurizing fruits and vegetables by sorting and repacking.” Where therefore any commodity is subjected to a process or treatment with a view to its “development or preparation for the market”, as, for example, by sorting and repacking fruits and vegetables, it would amount to processing of the commodity within the meaning of Section 8(3) (b) and Rule 13. The nature and extent of processing may vary from case to case; in one case the processing may be slight and in another it may be extensive; but with each process suffered, the commodity would experience a change. Wherever a commodity undergoes a change as a result of some operation performed on it or in regard to it, such operation would amount to processing of the commodity. The nature and extent of the change is not material. It may be that camphor powder may just be compressed into camphor cubes by application of mechanical force or pressure without addition or admixture of any other material and yet the operation would amount to processing of camphor powder as held by the Calcutta High Court in Om Prakash Gupta vs. Commr. Of Commercial Taxes, (1965) 16 STC 935. What is necessary in order to characterize an operation as “processing” is that the commodity must, as a result of the operation, experience some change.” Judging the case on the basis of tests laid down above, it was observed as under:- “Here, in the present case, diverse quantities of ore possessing different chemical and physical compositions are blended together to produce ore of the requisite CPK, J & AVRB,J W.P.No.12058 of 2002 19 chemical and physical composition demanded by the foreign purchaser and obviously as a result of this blending, the quantities of ore mixed together in the course of loading through the Mechanical Ore Handling Plant experience change in their respective chemical and physical compositions, because what is produced by such blending is ore of a different chemical and physical composition. When the chemical and physical composition of each kind of ore which goes into the blending is changed, there can be no doubt that the operation of blending would amount to ‘processing’ of ore within the meaning of Section 8(3)(b) and Rule 13. It is no doubt true that the blending of ore of diverse physical and chemical compositions is carried out by the simple act of physically mixing different quantities of such ore on the conveyor belt of the Mechanical Ore Handling Plant. But to our mind it is immaterial as to how the blending is done and what process is utilised for the purpose of blending. What is material to consider is whether the different quantities of ore which are blended together in the course of loading through the Mechanical Ore Handling Plant undergo any change in their physical and chemical composition as a result of blending and so far as this aspect of the question is concerned, it is impossible to argue that they do not suffer any change in their respective chemical and physical compositions.” 21. Keeping in view the law laid down by the Hon’ble Apex Court in Chowgule case, which is much after the judgment of Allahabad High Court in Farrukhabad Cold Storage case, we shall proceed further. It is to be noted CPK, J & AVRB,J W.P.No.12058 of 2002 20 that in Farrukhabad Cold Storage case, a Division Bench of Allahabad High Court observed as under:- “The question then arises as to whether in the act of subjecting the goods to a particular temperature for a long period of time, as is done in cold storages, amounts to processing of goods.” 22. Further, after referring to meaning of the word ‘process’ and ‘processing’ and referring to the books published by the Indian Council for Agricultural Research, New Delhi, the Court held as under: “Review of all these authorities clearly indicates that when articles like potatoes, as in the present case, are kept under refrigeration their decay is prevented. The temperature in the cold storages, admittedly, is regulated by use of machinery. Thus, the mere fact that the potatoes themselves, which are kept in the cold storage, do not undergo any transformation and remain static, does not by itself mean that they are not subjected to any process at all during the period of storage. We have already held that the processing of goods need not lead to manufacture of new article. Preservation by refrigeration is a well-known method for keeping edible things in good condition for temporary periods. But for refrigeration it would not be possible to keep things in edible state for a long period of time. During the period when they are kept in the cold storage they are subjected to the process of refrigeration. This being so, the assessee-company would be an industrial company as defined in section 2(7)(d) of the Finance Acts of CPK, J & AVRB,J W.P.No.12058 of 2002 21 1966 and 1967, and, therefore, entitled to the concessional rate of tax.” 23. The judgment of Allahabad High Court in Farrukhabad Cold Storage was followed by the Calcutta High Court in Commissioner of Income Tax vs. Radha Nagar Cold Storage (P) Limited4, and the Allahabad High Court in other cases initiated against Farrukhabad Cold Storage. But, the Delhi High Court took a different view. In Delhi Cold Storage Private Limited vs. Commissioner of Income Tax-B, Delhi-1, New Delhi5, the Court held as under: “xxx It is obvious that the keeping of goods in a cold storage does not bring about any change, whatsoever, in the goods stored therein. To the contrary, they are kept intact; in the same nature and form in which they are originally stored. In this view of the matter, running of a cold storage cannot be said to be involving process of goods stored therein.” 24. The Delhi High Court took a contrary view, relying upon the judgment of Hon’ble Supreme Court in Chowgule & Company case [cited 3rd supra]. The Court after referring to the provisions of law and the meaning of the word ‘processing’, observed that there is no element of any 4 (1980) 126 ITR 66 (Cal) 5 1985 156 ITR 97 (Delhi) CPK, J & AVRB,J W.P.No.12058 of 2002 22 change or that the product does not stands to any change, when the same is stored in the Cold Storage, and as such, no benefit can be extended to the dealer. Accordingly held the issue framed in favour of the State. It is also to be noted here that the judgment of the Delhi High Court came to be challenged before the Hon’ble Supreme Court in Delhi Cold Storage Private Limited vs. Commissioner of Income Tax, New Delhi6. 25. The issue before the Hon’ble Supreme Court was “whether the assesse company running a Cold Storage can be held to be an industrial company, for purposes of Section 2(7)(c) of the Finance Act, 1973 and the First Schedule thereto?” In the said case, the Hon’ble Supreme Court after referring to the judgment of Allahabad High Court in Farrukhabad Cold Storage case and also the judgment of the Calcutta High Court, referred to above, held that the word ‘processing’ and the tests laid down to find out whether the operation amounts to processing by the Three-Judge Bench of the Hon’ble Supreme Court in Chowgule & Company case, run contrary to the conclusions reached by the Allahabad and Calcutta High 6 AIR 1991 SC 2125 CPK, J & AVRB,J W.P.No.12058 of 2002 23 Courts. Dealing with the term ‘processing’, the Court in Para 12 and 13 held as under: “12. In common parlance ‘processing’ is understood as an action which brings forth some change or alteration of the goods or material which is subjected to the act of processing. The dictionary meaning of the term is not very different from this meaning in one sense while various other meanings of wider amplitude are also available. The view taken by Allahabad and Calcutta High Courts did not find favour with the three-Judge Bench of this Court and in clear terms the judgment indicates that processing involves bringing into existence a different substance from what the material was at the commencement of the process. 13. In a cold storage, vegetables, fruits and several other articles which require preservation by refrigeration are stored. While as a result of long storage, scientific examination might indicate loss of moisture content that is not sufficient for holding that the stored articles have undergone a process within the meaning of Section 2(7)(c) of the Finance Act, 1973. The three-Judge Bench decision must be taken to have overruled the view of the Allahabad High Court in Addl. Commissioner of Income- Tax, Kanpur vs. Farrukhabad Cold Storage (P) Ltd., (supra) and that of the Calcutta High Court in Commissioner of Income-Tax vs. Radha Nagar Cold Storage (P) Ltd., (supra).” 26. In view of the ratio laid down by the Hon’ble Supreme Court in Delhi Cold Storage case [cited 7th supra], the argument of learned counsel for the petitioner that the CPK, J & AVRB,J W.P.No.12058 of 2002 24 storage of an item in a Cold Storage undergoes processing and as such, the petitioner is entitled for exemption/ benefit cannot be accepted. Hence, the same shall not make the assessee eligible for utilization of ‘C’ forms. The said view of ours also gets support from the undertaking given by the dealer in his letter, dated 24.11.2000, which fact is not disputed by the learned counsel for the petitioner. 27. Having regard to the above, it can be said without any hesitation that ‘C’ forms were used knowing that there was no manufacturing process in Cold Storage Unit. Hence, the order impugned warrants no interference and the writ petition is accordingly dismissed. There shall be no order as to costs. Miscellaneous petitions pending, if any, shall stand closed. _______________________________ JUSTICE C.PRAVEEN KUMAR _________________________________ JUSTICE A.V. RAVINDRA BABU Date: 20.10.2022 Note: LR copy to be marked B/o.MS CPK, J & AVRB,J W.P.No.12058 of 2002 25 THE HON’BLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HON’BLE SRI JUSTICE A.V. RAVINDRA BABU Writ Petition No.12058 of 2002 (per the Hon’ble Sri Justice C. Praveen Kumar) Date: 20.10.2022 MS "