9911796707
TMI Blog1997 (9) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... he State Act , for short). Thus, the raw materials consumed by the appellant in the manufacture of steel tubes were tax-paid goods. 2.. During the assessment years in question, the appellant had sold the steel tubes manufactured by it, both within the State as also in the course of interState trade and commerce. While assessing the inter-State sales of steel tubes, the assessing officer rejected the dealer s contention that the benefit of set-off envisaged by Explanation II under the Fourth Schedule to the Act was also available to the appellant in the assessment of its inter-State sales under the Central Sales Tax Act, 1956 ( the Central Act , for short). According to the assessing officer, sub-section (2A) of section 8 of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive items of goods of iron and steel used in its manufacture. 5.. Under the Fourth Schedule to the State Act, the rate of tax at 4 per cent was provided for all the goods of iron and steel referred to under Sl. No. 2, including the raw materials and finished products in question, which was uniform for all the dealers. But the Explanation II, as quoted above, provided for reduction in the amount of tax payable on the sales of manufactured items by the amount of tax already paid on the raw materials consumed therein. This reduction was made applicable only in respect of tax already paid under the State Act. But the contention of Sri Indra Kumar, learned counsel for the appellant, is that in view of sub-section (2A) of section 8 of the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s tax law of the appropriate State, if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods. 7.. From the above provisions it is clear that under sub-section (1) of section 8 of the Central Act the appellant was liable to pay tax at the rate of 4 per cent of his turnover of inter-State sales effected to the registered dealers. But according to the appellant, in view of the Explanation II of the Fourth Schedule to the State Act read with sub-section (2A) of section 8 of the Central Act, there was a general reduction in the rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the State Act in respect of the manufactured goods of iron and steel. 10.. The said aspect of the matter has been considered by a Division Bench of this Court in the case of Mangalore Metal House v. State of Karnataka [1986] 63 STC 482. In para 8 of the judgment it has been held that: .............The relevant part of the IV Schedule, extracted earlier, levies tax only at single point, namely, sale by the first or earliest of successive dealers in the State and that the rate of tax fixed is 4 per cent. No discrimination is made in the rate of tax in respect of iron and steel manufactured within the State or outside the State. The levy is uniformly 4 per cent. But the contention of the petitioner is that Explanation II in so far it re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e clear effect of the explanation is that if the sale of iron angles, rods and sheets have already been subject to 4 per cent tax and out of such tax suffered items, windows or doors, as the case may be, one manufactured, while the levy on sale turnover of windows or doors would be 4 per cent, the amount of tax paid on the sale turnover of iron angles, rods and sheets should be deducted. The resultant position is that in respect of the latest manufactured goods of iron and steel, the levy is 4 per cent on its sale turnover and nothing short. The fact that deduction is given in respect of tax already paid on items of iron and steel, out of which the latter goods were manufactured, is no basis to hold that the rate of tax on the latter goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries 21 and 22 of the Third Schedule to the Act. We have carefully perused the said decision. There is nothing in the decision which supports the submission of the learned counsel for the petitioner. 13.. For the foregoing reasons, it is held that the reduction in quantum of tax liability under the State Act by operation of the provisions contained in Explanation II of the Fourth Schedule to the said Act, will not amount to general reduction in the rate of tax under the State Act for the purposes of section 8(2A) of the Central Act. 14.. Accordingly, the appellant is not entitled to any relief as claimed. The appeal thus stands dismissed but of course without any costs. Appeal dismissed - - TaxTMI - TMITax - CST, VAT & Sales T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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