1989 (4) TMI 295 - HC - VAT and Sales Tax

Summary

Issues: Determination of applicable tax rate for goods sold by the assessee under specific entries in notifications dated July 1, 1975, and March 8, 1969.

Analysis:
The revision pertains to an order by the Board of Revenue regarding the tax rate applicable to goods sold by the assessee, with conflicting contentions from both the assessee and the department. The Board held that the goods are taxable under the residuary entry at serial No. 79 in the notification dated March 8, 1969, at a rate of 7 per cent. The assessee argued for a 4 per cent tax rate under the entry at serial No. 4 of the notification dated July 1, 1975, while the department contended for a 10 per cent tax rate under the entry at serial No. 45 of the notification dated March 8, 1969.

The key issue revolves around determining the correct tax rate for the goods sold by the assessee. The Board of Revenue found that the assessee, a manufacturer of iron and steel, produces flat bars from ingots and billets, selling them at a 4 per cent tax rate under the notification dated July 1, 1975. The question is whether the goods fall under the entry at serial No. 4 of the 1975 notification or the entry at serial No. 45 of the 1969 notification. Both sides agreed that the residuary entry at serial No. 79 of the 1969 notification does not apply, focusing the dispute on the specific entries.

The Tribunal's findings confirm that the flat bars sold by the assessee, derived from ingots and billets, cannot be directly used as spare parts or accessories of motor vehicles. The entry at serial No. 45 of the 1969 notification encompasses goods that can be immediately utilized as motor vehicle parts without further manufacturing steps, which does not align with the nature of the flat bars sold by the assessee. In contrast, the entry at serial No. 4 of the 1975 notification includes iron and steel products broadly, covering the flat bars manufactured by the assessee.

The judgment concludes that the flat iron and steel bars produced by the assessee fall within the definition of "iron and steel" as per the Central Sales Tax Act. Consequently, the goods sold by the assessee do not fit under the entries at serial No. 45 or serial No. 79 of the 1969 notification, as argued by the department and upheld by the Board of Revenue. The revision is allowed, determining that the goods are taxable at a rate of 4 per cent under the entry at serial No. 4 of the 1975 notification.

In conclusion, the court allowed the revision, ruling that the goods sold by the assessee are taxable at a rate of 4 per cent under the specific entry in the 1975 notification, resolving the dispute over the applicable tax rate for the manufactured flat bars.