Adhunik Metaliks LTD vs. Stae.
Held
The Court held that the Assessing Officer (AO) failed to consider the Finance Department Notification dated March 1, 2002, of the Government of Odisha, which clarifies that coal is a raw material for a coal-based sponge iron industry. Consequently, the Court set aside the impugned assessment order specifically on the issue of treating coal as a raw material in the manufacture of sponge iron. The Court remanded this particular issue back to the AO for a fresh assessment. The AO is directed to reconsider the matter in light of the aforesaid notification and relevant case law. The Court also directed that the matter be placed before the AO on December 1, 2021, for further directions. The writ petition was disposed of in these terms.
Facts
The Petitioner, Adhunik Metaliks Ltd., challenged an assessment order dated February 18, 2008, passed by the Assessing Officer (AO). A key issue before the AO was whether coal used in the manufacturing of sponge iron should be classified as a raw material. The AO rejected the Petitioner's contention, leading to a demand. The Petitioner argued that a notification dated March 1, 2002, from the Finance Department, Government of Odisha, clarified that for a coal-based sponge iron industry, coal is indeed a raw material directly incorporated into the finished product. The Petitioner contended that this notification was not considered by the AO.
Key Issues
1. Whether coal used for manufacturing sponge iron should be treated as a raw material, as per the Finance Department Notification dated March 1, 2002, of the Government of Odisha? Petitioner's Argument: The Petitioner argued that the aforementioned notification clearly classifies coal as a raw material for coal-based sponge iron industries, as it directly forms part of the finished product. They relied on this notification to support their claim. Revenue's Argument: The judgment does not record any specific arguments made by the State of Odisha (Opposite Party) on this issue. However, the AO's initial assessment order rejected the Petitioner's contention, implying the revenue's stance was against treating coal as a raw material.
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Cause title — parties, addresses and appearances
ORDER 10.11.2021
1. One of the issues before the Assessing Officer (AO) in the impugned assessment order was whether coal which is used for manufacturing of sponge iron should be treated as a raw material? The AO in the impugned assessment order dated 18th February, 2008 rejected the contention of the Assessee that it should be treated as a raw material and proceeded to finalise the assessment raising demand accordingly.
Mr. Millan Kanoongo, learned Senior Advocate appearing for the Petitioner relies on the Notification dated 1st March, 2002 of the Finance Department, Government of Odisha which clarifies that for a coal based sponge iron industry, ‘coal’ is a raw material which directly goes into this compositio
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