1990 (3) TMI 326 - AT - VAT and Sales Tax

Summary

Issues:
- Claim for exemption under section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941 for sales of alloy steel castings
- Dispute regarding the classification of goods as steel castings under section 14(iv) of the Central Sales Tax Act, 1956
- Evaluation of evidence presented through declaration forms in support of the claim for exemption

Analysis:
The case involved an application under section 8 of the West Bengal Taxation Tribunal Act, 1987, where the applicant, a manufacturer of iron and steel goods, claimed exemption for sales of alloy steel castings under section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941. The applicant contended that the goods sold were steel castings falling under section 14(iv)(viii) of the Central Sales Tax Act, 1956, and therefore eligible for exemption. The Commercial Tax Officer disallowed the claim, which was upheld in subsequent appeals and revisions. The main issue revolved around whether the goods in question were correctly classified as steel castings for the purpose of exemption.

The applicant argued that by furnishing declaration forms as required by the law, it had discharged its initial onus of proving that the sales were made to registered dealers and were in respect of goods covered by section 14 of the Central Sales Tax Act. However, the Tribunal held that the mere production of declaration forms was not sufficient to establish that the goods were understood as steel castings in commercial parlance. The Tribunal emphasized that the applicant failed to provide evidence of how the purchasing dealers described the goods while placing orders, which was crucial in determining the commercial understanding of the goods.

The Tribunal referred to precedents and legal principles to establish that the classification of goods should align with their commercial understanding and treatment. It was emphasized that the absence of a definition in the law required interpreting the goods based on how they were perceived in commercial circles. Despite the applicant's arguments and references to case law, the Tribunal concluded that the applicant had not proven that the goods in question were commonly recognized as steel castings in commercial parlance. Consequently, the Tribunal upheld the decision of the authorities below to disallow the claim for exemption under section 5(2)(a)(ii) of the 1941 Act.

In conclusion, the Tribunal dismissed the application, stating that the authorities below had correctly rejected the claim for exemption. The decision was based on the applicant's failure to demonstrate that the goods were perceived and treated as steel castings in commercial circles, despite the submission of declaration forms. The application was dismissed without costs, with all members concurring with the decision.