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TMI Blog1988 (6) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... artmental Member. Both the Members answered questions Nos. 1 and 2 in favour of the Revenue and against the dealers; but, on question No. 3 they differed. The Chairman held that "ferro manganese" sold by the assessees/ dealers to the Minerals and Metals Trading Corporation is "manganese" within the meaning of entry 1 of the Second Schedule to the Andhra Pradesh General Sales Tax Act, exigible to tax at the last point of purchase, and hence only the Minerals and Metals Trading Corporation is liable to pay the said tax, but not the dealers. The Departmental Member was, however, of the opinion that "ferro manganese" is not "manganese" and is, therefore, taxable as "general goods" under section 5 of the Act. On this reasoning he held that the dealers are liable to pay tax under section 5(1) of the Act. The matter was then referred to a Full Bench of three Members, comprising the original two Members and Sri P.A. Chowdary, Accountant Member. The Accountant Member agreed with the Chairman that ferro manganese is "manganese" within the meaning of entry 1 in the Second Schedule. In view of the majority opinion, all the appeals (filed by the dealers/assessees) were allowed. The two assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he quantum of the turnover, and (b) in the case of goods mentioned in the Second Schedule, at the rates and only at the point of purchase specified, on the turnover of purchase in each year relating to such goods, irrespective of the quantum of turnover. Thus, in case of goods falling in the First Schedule or the Second Schedule, tax is levied only at one point of sale or purchase, as the case may be, while in the case of goods not falling within the First, Second, Fifth and Sixth Schedules, tax will be levied at each point of sale, at the rate specified in section 5(1). Now in this case it is found by the Tribunal, agreeing with the Revenue, that ferro manganese was sold by the dealers/assessees to the Minerals and Metals Trading Corporation which in turn exported the same. The question is, whether the assessees, who sold the commodity to the Minerals and Metals Trading Corporation, are liable to pay the tax under section 5(1) of the Act? In other words, the question is whether ferro manganese sold by the assessees to the Minerals and Metals Trading Corporation is "manganese" within the meaning of entry 1 of the Second Schedule, which would make the Minerals and Metals Trading C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n other words, a manufacturing process is employed to obtain ferro manganese which is different from pure manganese. Hence it is not correct to say that ferro manganese is "manganese". It is a different commodity; the assessees/dealers themselves have made a distinction between "manganese ore", "ferro manganese", and "ferro silicon", as would be evident from their books and particulars of turnover submitted by them. They have shown the turnover of each of these items separately. The intention of the legislature was to tax only "manganese" and "manganese ore" at a single point, but not the other products obtained from manganese. In commercial parlance, ferro manganese is understood as different from "manganese". Ferro manganese is, therefore, taxable as "general goods" under section 5(1) of the Act. A perusal of the Act and its Schedules would show that the object of the legislature in enacting the Andhra Pradesh General Sales Tax Act was not merely to raise the maximum revenue for the State. Raising revenue is, undoubtedly, an important objective; but not the only objective. The interests of the consumer, of commerce in particular goods, of economy, and of the dealers, all have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uding manganese ore" were brought in, probably because of the decision of this Court in State of Andhra Pradesh v. S. Kaithan [1967] 20 STC 409, where it was held that the expression "manganese" does not take within its fold "manganese ore"-no doubt, that was a decision dealing with an entry in the Madras General Sales Tax Act. Now it is clear from the memo filed before the Tribunal by the department itself that pure manganese is not generally sold or purchased and, that there has been no instance where the sale or purchase of pure manganese has been brought to tax. Manganese is purchased and sold in the market only in three forms, viz., "manganese ore", "ferro manganese", and "silico manganese". The entry expressly takes in only "manganese ore", but does not take in "ferro manganese" and "silico manganese". Could it be that the legislature intended to exclude ferro manganese and silico manganese, the turnover whereof is far more or at any rate, no less than the turnover relating to manganese ore, from the Second Schedule? Since a large proportion of ferro manganese produced in this country is exported, the idea of the legislature evidently was to tax it only at one point, viz., th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislature could not have intended to include only such a commodity as entry 1 in the Second Schedule. In this connection, it is equally relevant to notice that one of the rules of interpretation adopted by courts in interpreting such entries is to understand them in commercial parlance. In State of Andhra Pradesh v. Sri Durga Hardware Stores [1973] 32 STC 322, this Court said: "In interpreting items contained in those entries, resort should be had not to the scientific, geological or botanical sense, but to their popular meaning, or the meaning that is attributed to them by those who are dealing in those commodities, and the meaning in which their consumers or buyers understand them......." It is unnecessary to multiply decisions on this score. It would be sufficient to refer to the decision of the Supreme Court in Indo International Industries v. Commissioner of Sales Tax, U.P. [1981] 47 STC 359, where it was observed: "It is well-settled that in interpreting items in statutes like the Excise Tax Acts or Sales Tax Acts, whose primary object is to raise revenue and for which purpose they classify diverse products, articles and substances, resort should be had not to the sci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ferro manganese during the steel making stage........." At page 684 it is stated: "Manganese ore is an important raw material in the iron and steel metallurgy wherein it is used both in the form of ore as such and as ferro manganese. About 90-95 per cent of the world production of manganese ore is used in the metallurgy of iron and steel........." At page 685 it is stated: "For the manganese ore used in ferro manganese industry, besides the manganese content, the other important considerations are the high Mn to Fe ratio and very low content of deleterious phosphorus. The specifications of manganese ore for ferro manganese according to the Indian Standards Specifications No. IS: 4793 = 1968 are as below: -------------------------------------------------------------------------- Grade-1 Grade-2 Grade-3 Grade-4 (i) 48% and 46-48% Mn 44-46% Mn 40-44% Mn above Mn (ii) 7% Fe (max.) 7.5% Fe (max.) 9% Fe 12% Fe (iii) 8% S10(2) (max.) 9% S10(2) (max.) 10% S10(2) 12% S10(2) (iv) 0.12% P. 0.15% P. 0.15% P. 0.15% P. .......... --------------------------------------------------------------------------- Note.-In addition, the ratio of manganese and iron should be at lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g, "manganese ore" would also come within the expression "manganese", which is inconsistent with the Bench decision of this Court in State of Andhra Pradesh v. S. Kaithan [1967] 20 STC 409. It is, however, unnecessary for us to deal with the reasoning of the said decision, inasmuch as the legislature has made its intention clear by amending the entry and expressly including "iron ore" within the meaning of "manganese". "Manganese ore" and "ferro manganese" are merely different forms in which manganese is used in the iron and steel making industry. That is how it is understood in the commercial world, as would be evident from the material referred to above. Mr. T. Anantha Babu contended that ferro manganese is merely a purer form of manganese ore, wherein the content of manganese is enhanced, and the content of other unnecessary elements is reduced. For the above reasons, we hold that ferro manganese is taxable at the last point of purchase as provided in entry 1 of the Second Schedule to the Andhra Pradesh General Sales Tax Act and, therefore, the assessees/dealers herein cannot be made liable under section 5(1) of the Act. In view of the above opinion of ours, no other questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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