1985 (11) TMI 220 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of pipe and pipe fittings under U.P. and Central Sales Tax Acts - Classification of goods as "iron and steel" - Tax rate applicability - Interpretation of circular on definition of "iron and steel" - Impact of galvanization on classification - Legal validity of circular in tax assessments.

Detailed Analysis:
The judgment involves six revisions filed by the Commissioner of Sales Tax against the Sales Tax Tribunal's decision regarding assessments for the years 1975-76, 1976-77, and 1977-78 under the U.P. and Central Sales Tax Acts. The original assessment orders classified the goods dealt with by the assessee as "iron and steel" under section 14(iv)(xi) of the Central Sales Tax Act, resulting in taxation accordingly. However, the assessments were reopened under section 21 of the U.P. Sales Tax Act, contending that the goods were unclassified items and should be taxed differently. The Tribunal dismissed the Revenue's appeals against the Assistant Commissioner's order, leading to the current revisions.

The main contention revolved around whether pipe and pipe fittings should be classified as "iron and steel" for taxation purposes. The standing counsel argued that these items were not covered under the entry "iron and steel" and should be taxed differently. Reference was made to a circular issued by the Government of India on the scope of the definition of "iron and steel" under the Central Sales Tax Act, emphasizing that galvanized pipe and fittings fell within the ambit of the relevant section. However, the counsel for the assessee relied on a Supreme Court decision stating that such circulars, though not binding, could be considered as good evidence in tax assessments.

Furthermore, the assessee's counsel argued that even after galvanization, pipe and pipe fittings should still be considered as "iron and steel." Citing a decision of the Andhra Pradesh High Court and a Division Bench of the same Court, it was contended that processes like galvanization and corrugation did not change the essential character of iron and steel. The High Court, after considering these arguments and precedents, concluded that the Tribunal's order was justified and required no interference.

In the absence of any contrary authority or material presented by the standing counsel for the department, the Court upheld the Tribunal's decision. The revisions were rejected, and no costs were awarded in the matter.