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TMI Blog1987 (7) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... nd manufactures iron and steel materials of the nature indicated above and thereafter sells them in regular course of business. The petitioner had purchased scrap and rejected iron and steel materials, such as, rail and plate cuttings, commercially known as "scrap iron" from different registered dealers including M/s. Hindustan Steel Limited during the assessment year 1976-77, on furnishing a declaration in form No. XXXIV and after utilising the scrap in its mill and converting the same into M.S. rounds, plates, etc., had sold the product. The sales thus effected by the petitioner were also included in its taxable turnover. The assessing officer, however, issued notice to the petitioner under section 12(4) of the Act and by the impugned order dated 30th January, 1979 (annexure 1) raised a further demand of sales tax to the tune of Rs. 98,740.81 on the ground that "the petitioner had violated the undertaking given in the declaration form in question". In O.J.C. No. 519 of 1979, the period of assessment is 1975-76 and the further demand of tax is Rs. 63,117.66. In O.J.C. No. 973 of 1979, the period of assessment is 1976-77 and the further demand of tax is Rs. 262.96. 4.. This bri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declaration under the preceding proviso but are utilised by him for any other purpose, the price of the goods so purchased shall be allowed to be deducted from the gross turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer. * * * This is how the assessing authority has proceeded and raised further demands of sales tax under the three assessment orders which are under challenge. 7.. The contention raised by Mr. Agarwal appearing for the petitioner was that the changes effected by the manufacturing process by the petitioners did not render the materials purchased by them so different as to take them out of the relevant declared entry No. 46 of the notification issued under section 5(1) of the Act prescribing different rates of sales tax payable by a dealer on account of sale of goods as specified in column No. (2) of the Schedule in question. Entry No. 46 reads as follows: "46.-Iron and steel, that is to say Four per cent * * * (iv) steel bars (rounds, rods, squares, flats, octagons and hexagons, plain and ribbed or twisted, in coil form as well as straight lengths); * * * (xvi) defectives, rejects, cuttings or end pie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te distinguishable as the list of declared goods given there at No. (iv) at the relevant time was: "(iv) iron and steel, that is to say * * * (d) (i) steel plates, sold in the same (ii) steel sheets, form in which (iii) sheet bars and tin bars, they are directly (iv) rolled steel sections, and produced by the (v) tool alloy steel; J rolling mill." It is, therefore, obvious that conversion to a different category or form was not permissible under the Tamil Nadu Act. The following observations of the Supreme Court is relevant to be quoted. "...........the object was not to lay down that all the categories or subitems of goods, as specified separately even before the amendment of 1972, were to be viewed as a single salable commodity called 'iron and steel' for purposes of determining a starting point for a series of sales." "If the object was to make iron and steel taxable as a substance, the entry could have been: 'Goods of iron and steel'. Perhaps even this would not have been clear enough. The entry, to clearly have that meaning, would have to be: 'Iron and steel irrespective of change of form or shape or character of goods made out of them'. This is the very u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice these decisions. Commissioner of Sales Tax, Lucknow v. D.S. Bist [1979] 44 STC 392 (SC) is a case where the assessee owned some tea gardens in the State of U.P. and sold the tea leaves grown in his garden after processing and packing. A question arose as to whether on that account the tea leaves ceased to be an "agricultural produce" and liable to sales tax. It was held that the tea leaves continued to be an agricultural produce even after subjecting them to processing and therefore they were not exigible to sales tax. In the case of Alladi Venkateswarlu v. Government of Andhra Pradesh [1978] 41 STC 394 (SC), a question arose as to whether "atukulu" (parched rice) and "muramaralu" (puffed rice) were "rice" within the meaning of entry 66(b) of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957. On a consideration of the entire scheme of the Act, it was held that the term "rice" as ordinarily understood in English language would include both parched and puffed rice. Similarly, this Court in the case of State of Orissa v. Satyabadi Sahu Sons [1982] 51 STC 75 held that "misri", i.e., sugar-candy, would come within the meaning of "sugar", and therefore, i ..... 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