1978 (11) TMI 144 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Interpretation of the word "rods" in entry 27 of Schedule II-Part A of the Gujarat Sales Tax Act, 1969.
2. Determination of whether the articles sold by the assessee fall under entry 13 of Schedule III or entry 27 of Schedule II-Part A.
3. Determination of the rate of tax applicable to the goods sold by the assessee.

Issue-Wise Detailed Analysis:

1. Interpretation of the word "rods" in entry 27 of Schedule II-Part A of the Gujarat Sales Tax Act, 1969:
The primary issue in this case revolves around the interpretation of the term "rods" as mentioned in entry 27 of Schedule II-Part A of the Gujarat Sales Tax Act, 1969. The assessee contended that the goods sold, described as nine-gauge copper bars or pieces of copper bars, should be classified as "rods" under entry 27. The Deputy Commissioner and the Tribunal both rejected this contention, stating that entry 27 specifically mentions bars and rods separately, and if the legislative intent was to include wire rods, they would have been explicitly mentioned. However, the court noted that entry 27 is cast in very wide terms, covering various articles manufactured out of non-ferrous metals and alloys, including sheets, rods, bars, slabs, blocks, ingots, circles, and even scrap. The court emphasized that the word "rods" is used in a generic sense and should include all varieties of rods, including wire rods.

2. Determination of whether the articles sold by the assessee fall under entry 13 of Schedule III or entry 27 of Schedule II-Part A:
The Tribunal had held that the articles sold by the assessee fell under entry 13 of Schedule III, which is a residuary entry covering all goods not specified in Schedules I and II. The court, however, found that if the goods sold by the assessee are indeed wire rods, they should be classified under entry 27 of Schedule II-Part A. The court rejected the revenue's contention that wire rods are distinct commercial commodities and should be classified under the residuary entry 13. The court concluded that the term "rods" in entry 27 must be taken to include all varieties of rods, including wire rods.

3. Determination of the rate of tax applicable to the goods sold by the assessee:
The court noted that neither the Deputy Commissioner nor the Tribunal had recorded a clear finding on whether the articles sold by the assessee were wire rods. Consequently, the court was unable to answer the questions posed by the Tribunal regarding the applicable tax rate. The court decided to decline to answer the questions and left it to the Tribunal to determine whether the articles sold by the assessee were wire rods. If the Tribunal finds that the articles are wire rods, they should be classified under entry 27, and the corresponding tax rate should apply. If not, the assessee's appeal would fail.

Conclusion:
The court concluded that the term "rods" in entry 27 of Schedule II-Part A includes all varieties of rods, including wire rods. The court declined to answer the specific questions posed by the Tribunal due to the lack of a clear finding on whether the articles sold by the assessee were wire rods. The Tribunal was directed to determine this factual issue and then dispose of the appeal accordingly. The reference was disposed of with no order as to costs.