1995 (1) TMI 314 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the sale turnover of remnants from manufacturing scraps is subject to tax.
2. Determination of the taxability of remnants sold by the assessee after manufacturing washers.

Detailed Analysis:
1. The case involved the assessee purchasing M.S. scraps to manufacture washers and selling the remnants. The assessing officer argued that the remnants sold were a new marketable commodity, not eligible for exemption. However, the Appellate Assistant Commissioner considered the scraps sold were not a new product, granting exemption on the sale value of the scrap. The Joint Commissioner disagreed, taxing the sale turnover of remnants under section 34 of the Act. The High Court examined whether the remnants constituted a new taxable commodity and analyzed relevant precedents to determine tax liability.

2. The assessee contended that the remnants sold were not a new product but merely scrap with holes made for manufacturing washers, which had already been taxed at the time of purchase. The High Court referenced a previous decision where scraps used in manufacturing were not subject to additional taxation. In contrast, the Joint Commissioner relied on a case involving perforated iron sheets, arguing that a different commercial commodity was created. However, the High Court distinguished the present case, emphasizing that the assessee had purchased only M.S. scrap, and the remnants were not a separate end-product. Consequently, the High Court held that the sale turnover of remnants was not taxable, overturning the Joint Commissioner's decision and allowing the appeal without costs.