1988 (2) TMI 439 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to assessment orders based on interpretation of sales tax law and classification of manufactured products under relevant entry in the Schedule.

Analysis:
The case involved nine writ applications by registered dealers under the Orissa Sales Tax Act, challenging assessment orders related to the utilization of raw materials for manufacturing and selling iron and steel products. The assessing officer added the value of raw materials to the taxable turnover, alleging a violation of the declaration made by the dealers. The main contention was whether the manufacturing process changed the nature of the products into a different taxable item. The petitioners argued that the finished products remained within the category of iron and steel, as per entry No. 46 of the Schedule, and did not necessitate a separate tax treatment.

The court referred to previous decisions on similar matters, including cases where the bench ruled in favor of the dealers. The judges highlighted that the description of "iron and steel" under entry No. 46 was not exhaustive and that the manufactured items still fell under the notified commodity of iron and steel. The court rejected the argument that the goods changed identity after manufacture, emphasizing that even if a different commercial commodity was produced, it remained iron and steel under entry No. 46. The judges noted that the State Government typically amended the Schedule to tax manufactured items separately, which was not the case here.

In conclusion, the court allowed all the writ applications, quashing the additional demands raised by the assessing officer. The judges found no reason to deviate from the previous decisions on the matter, and each party was left to bear its own costs. Justice K.P. Mohapatra concurred with the Chief Justice's decision, and the writ applications were allowed.