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TMI Blog1994 (3) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... de, Senior Advocate (M.L. Lahoty, Ms. Shipra Khazanchi, Anip Sachthey, Mrs. Ruby Singh Ahuja, P.K. Mullick and Mrs. M. Karanjawala, Advocates with him), for the appellants. [Judgment per : Hansaria, J.]. - Leave granted. Law has some bright patches as well as some grey areas. Some areas remain grey despite best efforts to illuminate them by enlightened judgments, as they get engulfed in darkness or become part of twilight zone either because of typical climatic condition or changes in conceptual firmament. 2.In the present cases, we are concerned with one of the grey areas of the legal world. The same is as to when a new commercial commodity comes into existence following processing or manufacturing undergone by the parent object, which in most cases serves as a raw material for the end-product. This aspect of the matter assumes importance when a law taxes sale of goods. To find out whether a particular goods is exigible to sales tax or not despite the raw material used in the production having been taxed earlier, the test evolved is whether a new commercial commodity has come into existence. 3.As to when it can be said as aforesaid has been a subject matter of catena of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle; whether there has been addition of external agents thereby making it different; and whether there has been a process of transformation of such a nature and extent as to have resulted in the production of a new article as commonly understood in the market where it is dealt with. So long it does not result in a new article, the nature, duration and transformation of the original commodity would not be material. In the other line of decisions involving articles which are not as such edible, we find that it is the concept of the consumption of the original commodity in the course of production of a new commodity as understood commonly by the people who use it would be material. The nature and extent of the process, whether the labour is manual or mechanical, whether the duration is short or long, whether the production requires expertise or not would no doubt be relevant but would not alone be decisive." 5.The above adequately shows how a valiant effort was made to read a common thread running through different judgments noted in the decision. A Bench of this Court as well had gone through this exercise recently in Rajasthan Roller Flour Mills Assn. v. State of Rajasthan, JT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suffered sales tax, tax could not be realised once again from the sale of plates, flats, rounds etc. This Court did not accept the contention but the reason given for rejecting the contention is what is pressed into service by Shri Tarkunde, according to whom, the reason given therein establishes his contention conclusively. 9.As we are concerned with the products of iron and steel, as was Pyarelal's case let the relevant part of Section 14 of the Act dealing with it be noted :- 14. "Certain goods to be of special importance in inter-State trade or commerce :- It is hereby declared that the following goods are of special importance in inter-state trade or commerce :- **** iron and steel, that is to say, -(iv) ***** Wire rods and wires - rolled, drawn, galvanised,(xv) aluminised, tinned or coated such as by copper; ***** 10.In Pyarelal's case the contention on behalf of the assessee was that steel rounds, flats, plates etc. were not different commercial commodities because they were products of iron and steel, and so, were not taxable once again, as all the products of iron and steel mentioned in various sub-items of clause (iv) have to be taken as one c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in clause (a) of Section 15 of the Act. According to us, the purpose behind this provision is to minimise the tax burden on declared goods because of the special importance of these goods in inter-state trade and commerce. 14.When the attention of the Sales Tax Appellate Tribunal, against whose orders present appeals have been filed was drawn to Pyarelal's case and the argument noted above was advanced, it observed that the two goods being distinct, the argument was "really a camouflaged attempt to by-pass the judgment". According to us, the Tribunal did not properly understand the decision in Pyarelal, which indeed supports the appellants' case. This is for the reason that Pyarelal's case ought to be taken to have accepted that goods of one sub-item should be taken as one taxable commodity. Rajasthan case does not lay down any different proposition. 15.Despite the aforesaid being the position, Shri Chari contends that wires being known as a different commercial commodity from rods, as were flour, maida and suji accepted as different from wheat in Rajasthan case, wires would be exigible to tax on the ratio of that case. The position here being different, as both rods and wires ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of wire from rods, to which our attention has been invited by Shri Chari. We only wish to put on record that in meeting what was mentioned in this regard in the counter-affidavit. Shri Lahoty, who assisted Shri Tarkunde, drew our attention to what has been stated by the Indian Standard Institution on this subject, reference of which is to be found at page 19 of Volume II of the Paper Book of D.A. No. 68/86 under the Heading "2.4 wire". We have refrained from going through the exercise of deciding whether wire is a different commercial commodity from rod, because our approach has been different, as we wanted to base our decision not on the touchstone of iron rod and wire being one or separate commercial commodity, having found that these two goods have been clubbed together in sub-item (xv) (supra) which, according to us made material difference and clinched the issue. 18.We, therefore, conclude by stating that iron wires cannot be taken as a separate taxable commodity and, if wire rods which were purchased by the appellants had suffered sales tax, the same could not be realised from the sale of wires. Shri Lahoty indeed brought to our notice Notifications No. 1 and II issued b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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