1. This rule is directed against an order of assessment dated 15th December, 1967, under the Bengal Finance (Sales Tax) Act, 1941. As a registered dealer, the petitioner is entitled to the benefits allowable under Section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941, and it is alleged that the petitioner is entitled to get exemption from payment of any tax on the petitioner's sales of tube-wells, pumps, accessories and parts thereof to all manufacturing dealers on production of declaration in form XXIV of the Bengal Sales Tax Rules, 1941. In respect of the assessment made on the petitioner for the 4 quarters ending 31st December, 1955, the Board of Revenue decided that the tube-wells and pumps are 'plant' and 'machinery' intended for use in the actual process of manufacture of paper and pulp and the petitioner's claim for exemption under Section 5(2)(a)(ii) was allowed. For the assessment for four quarters ending 31st December, 1963, the petitioner submitted return showing Rs. 29,66,666.86 as the gross turnover and claimed Rs. 3,76,510.29 as the turnover exempted from tax under Section 5(2)(a)(ii) of the Act. Out of the said amount of Rs. 3,76,510.29, a sum of Rs. 59,193.18 was claimed as also exempt as labour charges. The petitioner claimed exemption under Section 5(2)(a)(ii) of the Act but the claim was disallowed. Being aggrieved by the said order, the petitioner moved this court and obtained the present rule. The relevant portion of the impugned order, which is challenged, is as follows :
The dealer has claimed exemption under Section 5(2)(a)(ii) of the Act for Rs. 3,76,510.29 only and produces 47 declarations in forms XXIV and XIX. On scrutiny it appears that some declarations have been issued for purchases of tube-wells and pumps required for manufacturing purposes. As water is not considered to be an essential ingredient for manufacture of goods other than paper the relevant declarations issued to cover the said purchases of tube-wells and pumps, on the strength of their registration certificate cannot be accepted. The judicial decisions referred to by the learned Advocate for the dealer, it seems, materially differ in the facts and circumstances with the instant case. The claim of the dealer's representatives for allowing labour charges separately shown and included in the bills claimed to be exempt under Section 5(2)(a)(ii) appears reasonable and the claim is disallowed for Rs. 2,16,303.43 only representing the value of materials transferred and the claim admitted for Rs. 1,60,206.86 only.
2. Mr. Chowdhury, on behalf of the petitioner, contended that the tube-wells and pumps were supplied to the manufacturing registered dealers who used them for the purpose of manufacturing the goods and, therefore, the petitioner is entitled to exemption. Mr. Chowdhury contended that water is also essential ingredient for manufacture of goods other than paper and pulp. Water is certainly an essential ingredient for the purpose of manufacturing plastic machinery, tyres, tubes, etc., and if the tube-wells and pumps are required and used for the purpose of manufacturing the goods, the petitioner is entitled to the exemption.
3. Mr. Sen Gupta, on behalf of the respondents, however, contended that water is not an essential ingredient for the said manufacture and tube-well is not a machinery within the meaning of the Act. For the purpose of exemption under Section 5(2)(a)(ii), Mr. Chowdhury relied upon the cases reported in The Mining and Chemical Industries v. Commissioner of Sales Tax, Uttar Pradesh  14 S.T.C. 391, State of Mysore v. M. N. V. Rao  15 S.T.C. 540, Cotmac Private Ltd. v. Commercial Tax Officer, 1st Circle, Hubli and Anr.  20 S.T.C. 20 and Member, Board of Revenue, West Bengal v. Phelps and Co. (P.) Ltd.  29 S.T.C. 101 (S.C.). In my opinion, however, the decision of the Supreme Court in Member, Board of Revenue, West Bengal v. Phelps and Co. (P.) Ltd.  29 S.T.C. 101 (S.C.) is conclusive on the point raised. If it is found that the tube-wells and pumps are sold to the registered dealer for the use by him in the manufacture of goods for sale, then the assessee is entitled to exemption under Section 5(2)(a)(ii). The reasoning on which the respondent-Commercial Tax Officer stated that water is not an essential ingredient either of plastic machinery or manufacture of any machinery apart from papers, cannot be upheld. If it is found that, the tube-wells and pumps are used by the registered dealer for the manufacture of goods for sale, then the petitioner-assessee will be entitled to the exemption, on the principles laid down in the case reported in Member, Board of Revenue, West Bengal v. Phelps and Co. (P.) Ltd.  29 S.T.C. 101 (S.C.). The case reported in Member, Board of Revenue, West Bengal v. Phelps and Co. (P.) Ltd.  29 S.T.C. 101 (S.C.) is a case where Phelps and Co. (P.) Ltd., the assessee, was carrying on the business of tailors, drapers, out-fitters and industrial gloves manufacturers and sold some gloves to different companies, namely, Indian Iron and Steel Co. Ltd., Indian Standard Wagon Co. Ltd. and Hooghly Docking and Engineering Co. Ltd., and wanted exemption under Section 5(2)(a)(ii) of the Act, which having been disallowed by the Commercial Tax Officer, challenged the order, which ultimately went up to the Supreme Court. The Supreme Court held as follows :
We have now to find out what exactly is the meaning of the expression 'for use by him in the manufacture of goods for sale'. Identical words are used in Section 8(b) of the Central Sales Tax Act, 1956. This court was called upon to find out the scope of that expression in J. K. Cotton Spinning & Weaving Mills Co, Ltd. v. Sales Tax Officer, Kanpur  1 S.C.R. 900. Dealing with that expression, this court observed :
The expression 'in the manufacture of goods' should normally encompass the entire process carried on by the dealer of converting raw materials into finished goods. Where any particular process is so integrally connected with the ultimate production of goods that but for that process, manufacture or processing of goods would be commercially inexpedient, goods required in that process would, in our Judgment, fall within the expression 'in the manufacture of goods.
4. In the present case the assessee-company has sold the goods in question to certain manufacturers who were manufacturing iron and steel materials. It is also clear from question No. (i) that those gloves were to be used by workmen who were engaged in hot jobs or in handling corrosive substances in the course of manufacture. That being so, it cannot be denied that those gloves had to be used in the course of manufacture.'
5. In my opinion, on the same reasoning, the tube-wells and pumps supplied to the manufacturer will be allowed to be exempted if it is found that these tube-wells and pumps are used for the purpose of manufacture of goods.
6. In the result, this rule must be made absolute. The order of the Commercial Tax Officer must be quashed and the matter must be remitted to the Commercial Tax Officer for decision of the case in accordance with law.
7. There will be no order as to costs.
8. It is stated before me that the security deposited by the petitioner is lying with the Registrar, Appellate Side. The security may be allowed to be withdrawn by the petitioner.
9. The Judgment and order as made in Civil Revision Case No. 4000(W) of 1968 shall govern the other Rule, i. e., C. R. No. 4001 (W) of 1968.