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TMI Blog1988 (6) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... ay 11, 1979, on the ground that the Deputy Commissioner had allowed exemption in respect of sales turnover of mild steel rounds, tor-steel manufactured out of taxsuffered iron scrap without verifying the same placing reliance on explanation 11 to Schedule IV of the Act. The petitioner has filed the above petitions challenging, inter alia, the constitutional validity of section 5(4) of the Act in so far as it pertains to item 2 of the Fourth Schedule to the Act read with explanation 11 to the Fourth Schedule for the period prior to April 1, 1978, as violative of article 304(a) of the Constitution. 2.. It is relevant to state that for the period subsequent to April 1, 1978, the said provisions with explanation 11 to the Fourth Schedule of the Act which is worded differently have been upheld by this Court in Mangalore Metal House v. State of Karnataka [1986] 63 STC 482. The view taken therein was approved* by the Supreme Court while dismissing the special leave petitions filed against that decision. As one of us (Rajendra Babu, J.) had appeared for the Revenue in that case we expressed a doubt as to the propriety of hearing these matters. However, the learned counsel for the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... traight lengths and in coil form, as rolled and in riveted condition; ---------------------------------------------------------------------- 1 2 3 4 ---------------------------------------------------------------------- (vii) plates both plain and chequered 3 per cent in all qualities; (viii) discs, rings, forgings and steel castings; (ix) tool, alloy and special steels of any of the above categories; (x) steel melting scrap in all forms including steel skull, turnings and borings; (xi) steel tubes, both welded and seamless of all diameters and lengths, including tube fittings; (xii) tin-plates, both hot dipped and electrolytic and tinfree plates; (xiii) fish plate bars, bearing plate bars, crossing sleeper bars, fish plates, bearing plates, crossing sleepers and pressed steel sleepers, rails-heavy and light crane rails; (xiv) wheels, tyres, axles and wheel sets; (xv) wire rods and wires rolled, drawn galvanised, aluminised, tinned or coated such as by copper; (xvi) defectives, rejects, cuttings or 3 per cent end pieces of any of the above categories. ---------------------------------------------------------------------- Act 13 of 1982 (1-10-1957 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws: (1) Explanation II to the Fourth Schedule of the Act is not in the nature of exemption clause, but is a proviso to charging section 5(4) in so far as item 2 in the Fourth Schedule is concerned. There is no charge on the finished product of tax if tax had been paid on the raw materials. Such a provision is violative of article 304(a) of the Constitution, as such levy will result in discrimination between the manufactured goods (sub-items in item 2 of the Fourth Schedule) out of raw material (also sub-items in item 2 of the Fourth Schedule) imported from outside the State and those goods manufactured out of raw materials locally purchased. The sale of the finished products of iron and steel is not subjected to tax if raw material out of which the finished products are manufactured had been subjected to tax. In case of imported raw materials iron and steel used in the manufacture of finished product of iron and steel, no tax would have been levied under the Act. (2) A dealer who brings items of iron and steel from outside the State and manufactures other items locally was taxed on the amount of sale for such finished goods whereas the locally purchased iron and steel items use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions cited will be considered later. 7.. We will now take up the second point. On this aspect of the matter, the question is no longer res integra but fully covered by the decision of the Supreme Court in Associated Tanners v. Commercial Tax Officer [1986] 62 STC 1. Their Lordships had to deal with a similar point arising under the Andhra Pradesh General Sales Tax Act. Item 9(b) of the Third Schedule read as follows: "THIRD SCHEDULE (Declared goods in respect of which a single point tax only is leviable under section 6.) ---------------------------------------------------------------------- Description of goods Point of levy Rate of tax ---------------------------------------------------------------------- 1 2 3 ---------------------------------------------------------------------- 9. (b) Tanned hides When purchased by a manufacturer 2 paise and skins (which in the State at the point of purchase in the were not subby the manufacturer and in all other rupee." jected to tax as cases at the point of purchase by the untanned hides last dealer who brings them into the and skins). State. 8.. It was therein contended that the taxation scheme was that dealer who br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured out of imported goods. Therefore, there is no discrimination in rate at all. The variation in the quantum of tax as already stated is on account of the scheme of taxation working differently on different dealers those who import raw material and manufacture and those who locally purchase and manufacture and hence, such an effect is only an indirect result and not having direct or immediate impact. 10.. Now we shall deal with the two decisions cited at the bar. The true effect of both decisions in Firm Mehtab Majid's case [1963] 14 STC 355 (SC) and Abdul Shukoor's case [1964] 15 STC 719 (SC), has been repeatedly considered by the Supreme Court starting with State of Madras v. Nataraja Mudaliar [1968] 22 STC 376, right up to Associated Tanners v. Commercial Tax Officer [1986] 62 STC 1. It was observed in the latest case that "as these two cases have been specifically dealt with in earlier cases, it is no longer necessary to discuss in detail the said two decisions". We cannot do any better. 11.. Thus, there is no substance in either of the contentions of Mr. Srinivasan and in the result, we dismiss the writ petitions. 12.. We have decided only the questions raised ..... X X X X Extracts X X X X X X X X Extracts X X X X
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