Summary
Linde India supplied pure oxygen to Tata Steel for basic oxygen steelmaking and claimed the 2% concessional sales tax rate for raw materials under Section 13(1)(b) of the Bihar Finance Act. On remand, a six-member expert committee found that the oxygen acts only as a refining agent that reduces carbon content, not as a direct raw material. The assessing, appellate and revisional authorities levied 3%, but the Jharkhand High Court held oxygen to be a raw material. The Supreme Court restored the 3% assessment. A writ court does not sit in appeal over concurrent findings of fact, particularly technical findings resting on an expert report. On merits, applying Thomas Stephen, which Ballarpur Industries had not overruled, oxygen used as a refining agent is not a raw material in the manufacture of steel.
Issues
- Whether oxygen used to refine pig iron into steel by the basic oxygen process is a 'raw material' attracting the 2% concessional rate under Section 13(1)(b) of the Bihar Finance Act, 1981.
- Whether the High Court could upset concurrent findings based on an expert committee report under Article 226.
Provisions considered
- Section 13(1)(b) and notification dated 09.09.1983, Bihar Finance Act, 1981The 2% concessional rate applies to raw materials used in manufacture; oxygen functioning as a refining agent was held not to qualify, attracting 3%. (¶¶ 2.1, 5, 10)
- Article 226, Constitution of IndiaThe High Court cannot act as an appellate court over findings of fact, especially technical findings of an expert committee accepted by three authorities. (¶¶ 5.1, 7)
Held
- The High Court erred in upsetting, under Article 226, the concurrent findings of the assessing, appellate and revisional authorities that rested on a detailed expert committee report; it lacks expertise on such technical questions. (¶¶ 6, 7)
- Thomas Stephen, holding that goods used for ancillary purposes like fuel are not raw materials, remains good law, having been distinguished but not overruled in Ballarpur Industries. (¶ 9)
- Since the oxygen is used as a refining agent whose main function is to reduce the carbon content, it is not a raw material in the manufacture of steel, and the respondents must pay tax at 3%, as they had done before Bihar was bifurcated. (¶¶ 10, 11)
Result
Civil Appeal Nos. 8061-8064 of 2022 allowed; the Jharkhand High Court judgment dated 03.08.2015 in W.P. (T) Nos. 1929, 1939, 1940 and 1941 of 2015 set aside and the assessment order, as confirmed up to the revisional authority, restored; no costs.