1979 (10) TMI 198 - HC - VAT and Sales Tax

Summary

Issues:
1. Determination of taxable turnover for assessment years 1967-68 and 1969-70.
2. Whether sales of cuttings and scrap fall under item 4(c) of the Second Schedule to the Tamil Nadu General Sales Tax Act.
3. Application of Supreme Court judgments in similar cases to the present scenario.
4. Interpretation of the law regarding single point taxation and identity of goods in trade.

Analysis:
1. The appeals arose from the Board of Revenue's order concerning the taxable turnover for the assessment years 1967-68 and 1969-70. The assessing officer included sums related to sales of cuttings and scrap in the turnover. The Appellate Assistant Commissioner allowed exemptions, but the Board revised the assessments, leading to the appeals.

2. The main issue was whether the sales of cuttings and scrap would fall under item 4(c) of the Second Schedule to the Tamil Nadu General Sales Tax Act. The Commissioner held that the cuttings constituted steel scrap and were not covered under the said item, as they were considered separate commercial commodities incidental to the assessee's business.

3. The judgment referred to a Supreme Court decision in State of Tamil Nadu v. Pyare Lal Malhotra, emphasizing that different commercial commodities, even if derived from the same material, could be taxed separately. The application of this precedent was crucial in determining the taxability of the goods sold by the assessee.

4. The interpretation of the law regarding single point taxation and the identity of goods in trade was significant. The judgment highlighted that for the benefit of single point taxation, goods must retain their identity as a commercial commodity. The interchangeability of specifications within item 4(c) was also discussed, emphasizing that steel scrap and other steel products were distinct taxable entities.

5. The judgment rejected the assessee's claim for exemption, stating that the sales of scrap were commercially different from steel rods and thus subject to taxation. The decision also referenced previous case law and emphasized that the sales of empty tins and jars were also taxable. The principle of incidental sales in the course of business was applied, leading to the dismissal of the appeals.