1997 INSC 0167
                                             State of Bihar and Others

                                                           Vs

                                              Jhunjhunwala Industries

                                          Civil Appeal No. 807 of 1997

                                                 (S. P. Bharucha, J )

                                                      12.02.1997

                                                     JUDGMENT

S. P. BHARUCHA J

1. Leave granted.

2. The State of Bihar is in appeal against the judgment and order of the Division Bench of the High
Court at Patna. Two questions arise in the appeal and they must be dealt with separately.

3. The respondents make and sell Khalli which is a cattle feed. The question is whether sales tax is
payable on the Khalli for the period 26-12-1977 till June 1985.

4. On 26-12-1977, the State Government issued a Notification (No. 14545) in exercise of the powers
conferred by Section 11(2) of the Bihar Sales Tax Fifth Ordinance, 1977 fixing the rate of sales tax
on various commodities including oil-cakes. On the same date, the State Government issued a
Notification (No. 14547) in exercise of the powers conferred by Section 6(3) (a) of the said
Ordinance exempting from the levy of sales tax various commodities including, at Sl. No. 35. cattle
feed and poultry feed. On 9-3-1978, the State Government issued a Notification (No. 3322) in
exercise of the powers conferred by Section 6(3) (a) of the said Ordinance thereby it amended SI.
No. 35 in Notification No. 14547 so that it read thus :

"Cattle feed and poultry feed

                  Explanation. - (1) Pellets and mash concentrates for cattle;

                  (2) Pig mash and pellet;

                  (3) Poultry mash and pellets for layers, growers, chicks and broilers; (4) Poultry feed
                  concentrate."

This amendment was to have retrospective effect from 26-12-1977. 5. It is contended on behalf of
the appellant State that by reason of the said amendment exemption under Notification No. 14547 is
available only to such cattle feed and poultry feed as meets the description contained in the
Explanation quoted above; that, therefore, the respondents are not entitled to the said exemption and
must pay tax on the sale of Khalli with effect from 26-12-1977.

6. It would appear that a point that goes to the root of the matter has been overlooked and that is that
it has first to be found as a matter of fact that Khalli falls outside the limited description of cattle
feed that is to be found in the said Explanation and this is something that has not been done. We find
it too late in the day to remand the matter for such a finding and, therefore, must reject the appeal
insofar as it relates to this point without referring to any of the other contentions that have been
raised on behalf of the respondents.

7. The second question relates to a notification issued by the State Government on 31-12-1980 in
exercise of the powers conferred by Section 20-A of the Bihar Sales Tax Third Ordinance, 1980 as
amended. It permits "every registered dealer, who is a manufacturer and is running an industrial unit
of the category and description mentioned respectively in columns 2 and 3 of the Table below to
adjust the amount of tax paid on the purchase of raw materials used in the manufacture of goods for
sale within Bihar against the tax payable on sale of finished products in Bihar in the manner
indicated in paragraph 2 of this order".

8. The High Court took the view that the said notification in clear terms provided that a dealer was
entitled to adjust the amount of tax paid on the purchase of raw materials used in the manufacture of
goods for sale within Bihar against the tax payable on sale of finished products in Bihar in the
manner indicated therein. Whereas the notification clarified that the goods manufactured must be
for sale within Bihar, there was no such geographical limitation with regard to purchase or payment
of tax on purchase of raw materials. It, therefore, held that if the dealer was able to establish that he
had paid tax on the purchase of raw materials, wherever it be, he would be entitled to claim set-off
under the said notification if the goods that were manufactured were for sale in Bihar.

9. Having regard to the terms in which the notification has been worded, we are inclined to agree.
The notification does not permit the dealer only "to adjust the amount of tax paid within Bihar on
the purchase of raw materials". It permits him "to adjust the amount of tax paid on the purchase of
raw materials". There is no limitation which calls for adjustment only if tax has been paid in Bihar
on the purchase of raw materials.

10. The appeal, therefore, fails and is dismissed, but with no order as to a costs.