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TMI Blog2013 (6) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. Pyare Lal Malhrotra [1976 (1) TMI 151 - SUPREME COURT OF INDIA] that sales tax law is intended to tax sales of different commercial commodities and not to tax the production or the manufacture of particular substances out of which these commodities may have been made. As soon as separate commercial commodities emerge or come into existence, they become separately taxable goods or entities for purposes of sales tax. With regard to the second point, the learned standing counsel submits that, as a matter of fact, the assessing authority while framing the assessment order failed to examine the relevant issue and preferred to follow the judgment of the Apex Court in the case of Telangana Steel Industries (1994 (3) TMI 108 - SUPREME COURT OF INDIA). The said approach of the assessing authority is clearly erroneous in view of two authoritative pronouncements of the Apex Court of the larger bench referred to above. - We are leaving this question open to be considered if so raised by the authority concerned in the reassessment proceedings. - Decided against the assessee. - Writ Tax No.-358 of 2007, Writ Tax No. - 361 of 2007, Writ Tax No. - 360 of 2007, Writ Tax No. - 359 of 2007 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notification dated 13th of September, 1990 and Section 14 (iv) (xv) of the Central Sales Tax Act, steel wire made from the steel rod are one and the same commodity. Elaborating the argument, it was submitted that admittedly, the petitioner purchases the steel rods within the State of U.P. and therefrom the petitioner manufactures the wire. Since the steel rod was tax paid goods, no Central Sales Tax shall be payable on the interstate sales on wire, thus, manufactured from the steel rod. 2. Secondly, the question with regard to the taxability of steel wire manufactured by the petitioner was examined by the Assessing Authority while framing the assessment order. The said issue cannot be re-examined in the proceeding under Section 21 of the Act even if the view taken by the Assessing Authority is legally erroneous. Although the submission is that the view taken by the Assessing Authority in the assessment order in view of the decisions referred by him which will be noticed at appropriate place is perfectly justified. In reply, Sri S.P. Kesarwani, learned Additional Chief Standing Counsel, submits that firstly, in various pronouncements the Apex Court has held that the steel wir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Reliance was placed on a decision of Apex Court in Telangana Steel Industries (supra) as also on interim order dated 27.11.1998 passed by this Court whereby the operation of circular/letter dated 31.7.1998 was stayed. A bare perusal of the assessment order would show that the Assessing Authority did not apply his mind with regard to the taxability of interstate sale on wire in view of the above and has granted exemption to the petitioner on the turnover of the wire. This being so, it is not correct to say that the Assessing Authority had applied its mind to the point in issue with regard to the taxability of such manufactured wire. The controversy was very much there during the course of assessment proceedings but it was not addressed in view of the pronouncement of the Apex Court in Telangana Steel Industries (supra). At this stage, the argument of the learned Additional Chief Standing Counsel for the Department that the attention of the Assessing Officer was not drawn towards the other binding precedents of the Apex Court holding that Telangana Steel Industries (supra) was not correctly decided, requires consideration. In short, the controversy up for consideration is wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pers, rails-heavy and light crane rails ; (xiv) wheels, tyres, axles and wheels sets ; (xv) wire rods and wires-rolled, drawn, galvanised, aluminised, tinned or coated such as by copper ; (xvi) defective, rejects, cuttings or end pieces of any of the above categories ;" In Telangana Steel Industries (supra) the Apex Court took the view that iron rods and iron wires cannot be taken as two separate taxable commodity and if the wire rods which were purchased by the dealer has suffered Sales Tax, the sale of wire will be exempt from sales tax. The aforesaid judgment proceeds on the footing that the Legislature did not want wires, even if same was a separate commercial commodity to be taken as a commodity different from the rods from the purposes of permitting the imposition of Sales Tax once again on wires despite the rods having been subjected to Sales Tax. The two goods rods and wires are so closely knit in the sub item that any separation of these does not seem permissible. This is a decision rendered by the two Hon'ble Judges of the Apex Court. The Apex Court in TVL K.A.K. Anwar and Company Vs. State of Tamil Nadu, 1998 U.P.T.C. 447, was faced with the aforesaid pronounce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as one. Reliance was placed upon its earlier judgment in the case of State of Tamil Nadu Vs. Pyare Lal Malhrotra, 1976 UPTC 282 = 1976 (3) SCR 168 that sales tax law is intended to tax sales of different commercial commodities and not to tax the production or the manufacture of particular substances out of which these commodities may have been made. As soon as separate commercial commodities emerge or come into existence, they become separately taxable goods or entities for purposes of sales tax. This appears to be crux of the decision of the Apex Court referred to above. A reading of the subsequent judgment of the Apex Court in the case of TVL K.A.K. Anwar and Company (supra) would show that the judgment delivered by it in the case of Telangana Steel Industries (supra) was not approved. At this stage, strong reliance was placed by the learned counsel for the petitioner on a Division Bench decision of this Court given in the writ petition No.3732 of 1998, Engineering Association of Northern India and others Vs. State of U.P. and another. In this case, the Division Bench has preferred to follow the judgment of the Apex Court in the case of Telangana Steel Industries (su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Tax Act regards them as the single commodity, appear to have been decided differently by a Constitution Bench of this Court in Hajee Abdul Shakoor and Company v. State of Madras, 1964 (8) S.C.R. 217. The further submission is that the case of Engineering Association of Northern India and others Vs. State of U.P. and another (supra) cannot be treated as a binding precedent. We are leaving the aforesaid question open to be considered by the authority concerned. With regard to the second point, the learned standing counsel submits that, as a matter of fact, the assessing authority while framing the assessment order failed to examine the relevant issue and preferred to follow the judgment of the Apex Court in the case of Telangana Steel Industries (supra). The said approach of the assessing authority is clearly erroneous in view of two authoritative pronouncements of the Apex Court of the larger bench referred to above. We are leaving this question open to be considered if so raised by the authority concerned in the reassessment proceedings. In view of the above discussion, we do not find any merit in the petition. All the petitions are hereby dismissed. - - TaxTMI - TM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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