1988 (6) TMI 327 - HC - VAT and Sales Tax

Summary

Issues: Taxability of ferro-manganese turnover under Andhra Pradesh General Sales Tax Act; Exemption under Central Sales Tax Act for export sales; Classification of ferro-manganese as "manganese" for tax purposes; Taxability of turnover related to ferro-manganese slag.

Analysis:
The case involved tax revisions arising from a Sales Tax Appellate Tribunal order, where the assessee, a ferro-manganese manufacturer, challenged the tax liability on various grounds. The assessing authority sought to levy tax on the turnover of ferro-manganese, claiming it as general goods under the Andhra Pradesh General Sales Tax Act. The petitioner argued that the sales were export sales under the Central Sales Tax Act, contended ferro-manganese falls under "manganese" exempted from tax, and disputed turnover related to ferro-manganese slag.

The Tribunal held that the sales were not export sales under the Central Sales Tax Act. It also determined that ferro-manganese qualifies as "manganese" under the A.P. General Sales Tax Act, exempting the petitioner from tax liability. The Tribunal did not delve into the third question due to its ruling on the second question. Regarding the fourth question, the Tribunal differentiated "manganese slag" from manganese ore, concluding it as a distinct commodity.

In a related judgment, the High Court affirmed the Tribunal's classification of ferro-manganese as "manganese," absolving the petitioner from tax liability under the A.P. General Sales Tax Act. The Court held that only the final purchaser, MMTC, was liable to pay tax. It also determined that the sales did not fall under the Central Sales Tax Act's provisions, as per the Supreme Court's decision in Serajuddin v. State of Orissa.

Regarding the fourth question on the taxability of ferro-manganese slag, the Court agreed with the Tribunal's finding that "manganese slag" is a separate product from manganese ore and ferro-manganese. The commercial treatment and separate turnover of manganese slag supported this distinction, leading the Court to uphold the Tribunal's decision.

Conclusively, based on the Court's findings, the tax revision cases were dismissed, with no costs imposed, and the petitions were consequently dismissed.