1973 (4) TMI 88 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the term 'iron and steel' under section 14(iv) of the Central Sales Tax Act.

Analysis:
The judgment pertains to a reference under section 11 of the U.P. Sales Tax Act regarding the classification of iron bailing hoops under the term 'iron and steel' as defined in section 14(iv) of the Central Sales Tax Act. The assessee contended that bailing hoops should be taxed at 2% as declared commodities under section 14, contrary to the 10% rate imposed by the Sales Tax Officer. The Assistant Commissioner ruled in favor of the assessee based on a Gujarat High Court decision, considering hoops as declared goods under section 14(iv). However, the revising authority upheld the original decision, leading to the Commissioner seeking a reference on the matter.

The controversy surrounding the classification of bailing hoops as iron and steel was previously addressed by the Gujarat and Madhya Pradesh High Courts. The Gujarat High Court deemed rivetted bailing hoops as rolled steel sections, while the Madhya Pradesh High Court excluded them from the definition of iron and steel under section 14(iv). The key issue revolves around whether bailing hoops qualify as rolled steel sections, a category specified in section 14(iv) of the Central Sales Tax Act.

The court analyzed the definition of 'rolled steel sections' within section 14(iv) and the arguments presented by the department's counsel. While the Gujarat High Court's decision was considered, it did not directly apply to the current case as the classification of bailing hoops as rolled steel sections was not disputed. The Madhya Pradesh High Court's interpretation, limiting rolled steel sections to structural construction parts, was not accepted by the court. The court emphasized that the section does not specify the intended use of the items listed, focusing solely on their categorization as rolled steel sections.

Due to the lack of evidence regarding the manufacturing process of iron hoops in the present case, the court found it impossible to determine whether they fall under the category of rolled steel sections. Without relevant material, the court returned the question unanswered, emphasizing the necessity of factual evidence to make a conclusive determination. The judgment concluded by returning the reference unanswered, with no costs imposed and a nominal counsel fee assessed.