1963 (10) TMI 20 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Classification of rivetted baling hoops under the Bombay Sales Tax Act, 1953.
2. Applicability of entry 4(d)(iv) in Schedule AA versus residuary entry 80 in Schedule B.
3. Interpretation of "sold in the same form in which they are directly produced by the rolling mills."
4. Legislative intent and purpose behind Section 7A and entry 4 in Schedule AA.

Detailed Analysis:

1. Classification of rivetted baling hoops under the Bombay Sales Tax Act, 1953:
The primary issue was whether rivetted baling hoops sold by the applicants were covered under any specific entry in the Schedules to the Bombay Sales Tax Act, 1953. The Deputy Commissioner of Sales Tax determined that they were not and thus fell within the residuary entry 80 in Schedule B. The applicants contended that these hoops were rolled steel sections sold in the same form as produced by rolling mills, hence should be covered under entry 4(d)(iv) in Schedule AA.

2. Applicability of entry 4(d)(iv) in Schedule AA versus residuary entry 80 in Schedule B:
The applicants argued that rivetted baling hoops were rolled steel sections and should be taxed under entry 4(d)(iv) in Schedule AA. The Deputy Commissioner, however, held that they were not sold in the same form as produced by rolling mills and thus fell under the residuary entry 80. The Tribunal upheld this view, agreeing that the rivetting altered their form, making them ineligible for entry 4(d)(iv).

3. Interpretation of "sold in the same form in which they are directly produced by the rolling mills":
The court examined whether rivetted baling hoops, which are pieces of rolled steel sections joined together, retained the same form as when produced by rolling mills. The Tribunal had held that rivetting changed their form, but the court disagreed. The court reasoned that the form of rolled steel sections is not altered by cutting or joining pieces together; only the length changes, not the form. Therefore, rivetted baling hoops should be considered as sold in the same form as produced by rolling mills.

4. Legislative intent and purpose behind Section 7A and entry 4 in Schedule AA:
The court considered the legislative intent behind sections 14 and 15 of the Central Sales Tax Act, 1956, which influenced the introduction of Section 7A and entry 4 in Schedule AA. The intent was to provide tax relief for goods deemed important in inter-State trade, including rolled steel sections in their original form. The court concluded that this relief should extend to rivetted baling hoops, as they are essentially rolled steel sections joined together without changing their form.

Conclusion:
The court concluded that rivetted baling hoops fall within entry 4 in Schedule AA, as they are rolled steel sections sold in the same form as produced by rolling mills. The decision of the Tribunal was deemed erroneous, and the applicants were entitled to the tax relief provided under entry 4 in Schedule AA. The reference was answered in the affirmative, and the respondent was ordered to pay the costs of the reference to the applicants.