2022 (7) TMI 350 - HC - VAT and Sales Tax

Rate of tax - sale of iron window and frames etc. fabricated and sold by the assessee - rate of tax at the rate of 10% on enhanced turnover is justified or not - HELD THAT - By virtue of the words iron and steel goods not covered by any other item of this schedule or notification any commodity that may be broadly described as iron and steel goods, would stand covered and included under the notification. The fact though such iron and steel goods may have some specific name description or identity other than the generic identity of iron and steel goods would not itself be enough to exclude such commodity from the scope and sweep of the taxing entry - If there was any doubt as to that, the legislature has itself made its intent plain by using the words but excluding iron or steel wires . Thus, legislature first understood iron or steel wires also to be item that would be included in the generic description of goods given by it as iron or steel goods . However, since the legislature wanted to exclude the goods iron or steel wires from the scope of the taxing entry, it use the word excluding . That intent cannot be applied or extended to any other item or commodity. It is also not the case of the revenue that there is any other taxing entry to which the goods frames and windows made of iron and steel may describe more appropriately and more exactly. Therefore, the other rule of interpretation that residuary entry may apply only if the item or commodity in question does not describe to any of the specific entry, would come into play to the aid and rescue of the assessee - the commodities frames and grills made of iron and steel would be included in Entry 43 of Notification No. KA. NI. -2-100/XI-9(231)/94-U.P. Act-15- 48-Order-2000 dated 15 January, 2000 by virtue of generic entry of all iron and steel goods as were not specifically excluded. The question of law is answered in the negative i.e. in favour of the assessee and against the revenue - the present revision is allowed.

Summary

Issues:
Rate of tax on sale of iron window and frames

Analysis:
The revisionist filed a revision against the order of the Commercial Tax Tribunal, Agra, regarding the rate of tax on the sale of iron window and frames. The Tribunal had dismissed the appeal on the issue of tax rate, subjecting the commodities to tax at 10% as an unclassified commodity. The question of law raised was whether the Tribunal was legally justified in determining the tax rate at 10% on the enhanced turnover of windows grill etc. The assessing officer did not discuss the tax rate on the turnover of self-manufactured frames and grills, estimating it at Rs. 5,00,000. The assessee did not raise specific grounds on the tax rate before the appeal authority, but raised it during the oral hearing before the Tribunal.

The Tribunal allowed the ground to be raised as a pure legal ground but later rejected it. The Tribunal reasoned that iron frames and grills could not be covered by the notification entry for millstores, citing earlier decisions. However, the High Court observed that the language of the law or taxing entry may apply only if it remains the same. For the relevant assessment year, the taxing entry had been amended by a notification, including iron and steel goods not covered by any other item of the schedule or notification. The Court interpreted the notification to include all iron and steel goods, regardless of specific names or descriptions.

The Court emphasized that the legislature's intent was clear in including iron and steel goods under the notification, except for iron or steel wires explicitly excluded. Since there was no other specific taxing entry that described the goods more appropriately, the generic entry of all iron and steel goods applied. The Court distinguished the earlier decisions cited by the Tribunal, stating they were in different factual and legislative contexts. Ultimately, the Court allowed the revision, answering the question of law in favor of the assessee and against the revenue, with no costs imposed.