1979 (11) TMI 236 - HC - VAT and Sales Tax

Summary

Issues:
1. Revision of sales tax assessment on galvanised plain sheets.
2. Classification of galvanised plain sheets under iron and steel category.
3. Interpretation of relevant entry in the Second Schedule to the Tamil Nadu General Sales Tax Act.
4. Comparison of different court decisions regarding the classification of galvanised sheets.
5. Impact of the process of galvanisation on the commercial quality of plain iron sheets.

Analysis:
The case involved the revision of a sales tax assessment on galvanised plain sheets, where the Deputy Commissioner of Commercial Taxes sought to challenge the order of the Sales Tax Appellate Tribunal. The initial assessment was revised to tax a higher turnover based on the classification of galvanised plain sheets as multi-point goods. The issue revolved around whether these sheets fell within the category of iron and steel as per the Second Schedule to the Tamil Nadu General Sales Tax Act.

The Court referred to a Supreme Court decision regarding the interpretation of the relevant entry in the Second Schedule, emphasizing that the expression "that is to say" was exhaustive, requiring the goods to fall within specific entries. The contention was whether galvanised plain sheets could be considered steel plates under the said entry. The Court delved into the process of galvanisation, highlighting how it transformed plain iron sheets into galvanised sheets with a new commercial quality due to the zinc coating becoming an integral part of the sheet.

In analyzing previous court decisions, the Court disagreed with the Andhra Pradesh High Court's interpretation that galvanised sheets retained their essential character as iron and steel goods despite the galvanisation process. The Court distinguished between zinc sheets and steel plates, emphasizing the different commercial characteristics and uses of galvanised plain sheets. Ultimately, the Court concluded that the relevant turnover should be taxed at the multi-point rate, overturning the Tribunal's decision based on the updated entry in the statute.

In conclusion, the Court allowed the revision petition, highlighting the change in the entry and the necessity to classify galvanised plain sheets correctly for tax purposes. The judgment emphasized the distinct commercial nature of galvanised sheets post-galvanisation and the need for accurate classification under the applicable sales tax laws.