Deepak Kumar Vs. Assistant Commissioner of Income-tax and ors. - Court Judgment

Excerpt:
- section 2(f): [dipak misra, k.k. lahoti & rajendra menon, jj] service tax - packaging and bottling of liquor whether amounts to manufacture within meaning of section 2(f) of central excise act 1944? finance act 932 of 1994), section 65 (76 b) (as amended on 16.6.2005) - held, the first limb of the inclusive definition of the manufacture under section 2(f) of central excise act has a very wide connotation. as the definition clause lays down an inclusive facet, the term manufacture has to be construed in a natural and plain manner and would include any process incidental or ancillary to the completion of a manufactured product. keeping in view the context in which the term manufacture has been used, it would take in its fold incidental and ancillary process in the manufacture or finishing of any manufactured product. it does not leave any room for doubt that an allied process should be integral and inextricable part of manufacture of completeness and presentability of the manufactured product. section 65(76b) of finance act used the words but it does not include. thus it is a definition which has the inclusive as well as exclusive facet. by virtue of the same it may include certain things and exclude others. it is well settled principle of law that a definition is not to be read in isolation and has to read in context of phrase which it defines, releasing that function of a definition is to give precision and certainty to the word or phrase which would otherwise be vague and uncertain. regard being had to the exclusionary fact in the finance act, though a limited one it would exclude the manufacturing process as defined under section 2(f) of the 1944 act. keeping in view the aforesaid dictionary clauses and circulars issued by the c.b.e.c. it is quite luminescent that would manufacture has to be understood in a broader sense and not to be confined or restricted to the excisable product in the act. it would include all processes which amount to manufacture whether or not the final product is an excisable product. in the process of manufacturing of country spirit, the over proof spirit which is not potable is reduced to issuable strength, which is potable. colouring and flavouring agents are added at the time of maturation. thereafter the liquor is supplied in sealed bottles to the retail contractors. this is the process of treatment given to over proof spirit in order to render it fit for human consumption in the form of country liquor. if the process is analysed there cannot be any scintilla of doubt that the process involves the manufacturing one under the provisions of section 2(f) of central excise act, 1944. as per the m.p. country spirits rules as well as clause 6 of the tender conditions it is mandatory for a distiller to supply country liquor in sealed bottles and not otherwise. therefore, packaging and bottling of liquor come within the ambit and sweep of manufacture within the meaning of clause (f) of section 2 central excise act, 1944 in view of the definition contained in section 65(76b) of the finance act especially keeping in view the exclusionary facet and further regard being had to the circular issued by central board of excise and customs.a.m. sapre, j.1. in this petition, challenge is only to the action of the respondents in retaining the books of account of the petitioner (assessee) under the provisions of the income-tax act. according to the assessee, i.e., the petitioner, the books of account seized as contemplated under section 131(3) read with section 133a of the act on march 12, 1999, should be returned to the petitioner. it is contended that the retention of books of account by the taxing authorities is in contravention of section 131(3) and hence, mandamus be issued against the respondents directing them to return the books of account to the petitioner as specified in annexure p-1 (page 11 of file).2. in reply, reliance is placed on the proviso to section 131(3) of the act and the approval granted by the specified authority for retention of the documents. the copies of the approval obtained by the assessing officer are filed along with the return--the last being (annexure r-4) dated june 16, 2004, granting approval to retain the books of account up to june 30, 2005. it is stated in all these approvals that assessment proceedings for the years 1994-95, 1995-96 and 1999-2000 are pending and hence, the books of accounts are needed. this in substance is the reply.3. heard shri g.m. chafekar, learned senior counsel with shri sarda, learned counsel for the petitioner, and shri a. p. patankar, learned counsel for the respondents.4. having heard learned counsel for the parties and having perused the record of the case, i find no merit in the writ.5. although learned counsel for the petitioner with vehemence, criticized the manner in which the approval was granted by the authorities to the assessing officer as also its contents, and contended that either they are manufactured at a later date or do not satisfy the requirement of section 131(3) ibid, i am unable to accept this submission. in other words, it is difficult to hold that these approvals relied on by the department are not genuine, and/or manufactured and/or do not contain the requirements of section 131(3) ibid. in my opinion, once it becomes an admitted fact that cases for some years are pending then retention is justified. it then satisfies the requirement of section 131(3) once the approval is obtained from the competent authority. one may seek direction for early disposal of the cases but it is too much to say that retention becomes illegal or uncalled for.6. i, therefore, do not find any merit in the writ and it is liable to be dismissed. however, at the same this court is inclined to observe that no more extension than the last one which is in force till june, 2005 (annexure r-4) be sought from the authorities and that the assessing officer must ensure that pending cases for which the books of account in question are retained be released no sooner the cases are over and assessment orders are passed. indeed, in all fairness, the efforts of the assessing officer must always be to ensure expeditious disposal of pending cases rather than to keep them pending and then go on seeking extension. this only shows slackness and/or casualness on the part of the assessing officer in not disposing of the cases promptly thereby resulting in harassment to the assessee and at the same time render him liable for disciplinary action for dereliction of his duties in discharge of his duties. it is the duty of the commissioner of income-tax to monitor such cases for their expeditious disposal rather than to encourage the assessing officer to go on obtaining the extension. it should never be in routine course. some kind of explanation from the concerned assessing officer as regards delay on his part is called for by his higher ups.7. it is with these observations the petition fails and is dismissed. no costs.