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1972 (9) TMI 137 - HC - VAT and Sales Tax
Issues:
1. Classification of galvanised iron wire in coils for tax purposes under U.P. Sales Tax Act. Analysis: The judgment of the court dealt with the classification of galvanised iron wire in coils for tax assessment under the U.P. Sales Tax Act. The primary issue revolved around whether the galvanised iron wire should be considered as 'hardware' or 'iron and steel' for tax purposes. The assessee argued for exemption under section 3-AA of the U.P. Sales Tax Act, claiming the wires were iron and steel. The Sales Tax Officer initially classified the wires as 'hardware' and taxed them accordingly. However, the appellate authority disagreed, supporting the assessee's claim that the wires fell under the category of 'iron and steel' and were exempt under section 3-AA. The court examined the definitions of 'hardware' and 'iron and steel' to determine the appropriate classification for galvanised iron wire. It was established that 'hardware' referred to small articles like nuts and bolts, which did not include wires. Therefore, the court concluded that the galvanised wires in question could not be classified as 'hardware.' Moving on to the second question, the court considered whether the galvanised iron wire should be treated as 'iron and steel' under section 3-AA of the U.P. Sales Tax Act. The court noted that the wire, even when galvanised and rolled into coils for transportation, retained its essential nature as iron and steel. Moreover, the court clarified that section 3-AA authorized the levy of tax on iron and steel only when sold to consumers, and since the assessee was not a consumer but a purchaser from the manufacturer, they were not liable to pay tax on the turnover of galvanised wire. Consequently, the court answered the first question in the negative, stating that the wires were not 'hardware,' and the second question in the affirmative, confirming that the wires fell under the category of 'iron and steel' exempt from tax under section 3-AA. As both questions were resolved in favor of the assessee, they were awarded costs for the reference.
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