TMI Blog2003 (9) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... 1941 which was initially valid for a period of one year ending on October 29, 1994 and was thereafter renewed up to October 29, 1995 and, therefore, the company was eligible for remission of tax to the prescribed extent. 3.. Upon expiry of the eligibility period, the company no more was entitled to exemption from tax on the purchase of hot rolled strips in West Bengal. By a notice dated December 13, 1999 the company was asked to show cause why the amount specified in the notice should not be demanded from it. An order dated December 6, 1999 was also served on the company, whereby it was stated that tax was leviable on the sale of cold rolled strips manufactured out of hot rolled strips purchased locally and the claim of the company that no tax was payable on the cold rolled strips by virtue of section 15(a) of the Central Sales Tax Act, 1956 was held to be not correct. 4.. The company thereafter filed an application under section 8 of the West Bengal Taxation Tribunal Act, 1987 challenging the legality and validity of the said notice as also the said order and by order dated March 16, 2000, the Tribunal quashed the said notice and the order and the respondent-Assistant Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving the expression "in the same form" which was deleted by amendment and therefore, the consequence is any two items mentioned in same sub-clause are to be treated as one and not different commodity. It is also contended that the said amendment was introduced in the State Act with effect from May 1, 1995 for making the provision in conformity with the law as decided by the apex Court in the case of State of Tamil Nadu v. Pyare Lal Malhotra reported in [1976] 37 STC 319 and Telangana Steel Industries v. State of Andhra Pradesh reported in [1994] 93 STC 187. It is further contended that the law in the aforesaid two cases were decided in the facts involving wire rods, wires which are governed by the same clause (iv) of the relevant section and therefore, decision on such facts remains binding on subsequent cases particularly when the State Government being the assessing authorities even amended the law earlier prevailing to make it in confirmity with the law so decided by the apex Court. 10.. In this connection it is pointed out that the expression "in the same form" has not been deleted from the Rules as would appear from the rule 83 of the said Rules framed under the said Act in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Physical Lab India Ltd. v. State of Karnataka reported in [2000] 119 STC 6 (SC) and Shree Cement Ltd. v. State of Rajasthan reported in [2000] 119 STC 10 (SC) have been relied upon. 14.. Mr. Gupta, learned counsel appearing for the respondents, has advanced his argument contenting that assessment for the present case is admittedly under the State Act and therefore, the provision of the Central Act does not solely decide the issue. Relying on the provision contained in sub-clause (vi) in section 17, it has been contended that section itself provides that the purpose must be of resale and therefore, when admittedly the petitioners manufactured cold rolled strips from hot rolled strips, such hot rolled strips were not for resale of the same commodity and in such circumstances, the petitioners are not entitled to the deduction available under clause (vi) of section 17. 15.. In respect of the provision of the Central Sales Tax Act relied on by the learned counsel for the petitioners, it is stated by Mr. Gupta for the respondents that section 14 has clubbed various materials in various sub-clauses, but items therein have been described separately. As and by way of example it was men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en argued that law of precedents has been decided holding that a decision by a larger bench of the apex Court has to prevail and judgment by smaller Benches contrary thereto cannot be held to be good law. Reliance was placed on the judgment in the case of State of U.P. v. Ram Chandra Trivedi reported in AIR 1976 SC 2547, Union of India v. K.S. Subramanian reported in AIR 1976 SC 2433 and N. Meera Rani v. Government of Tamil Nadu reported in AIR 1989 SC 2027. 19.. With regard to the letter issued by the Finance Department relied on by the petitioners, it is contended that the said letter is purely administrative letter and cannot bind the authorities far less the Tribunal and the court in case the question of following the law is required to be decided. 20.. Considering the aforesaid contentions, it appears that main consideration is of the law as to whether different items specified in different sub-clauses under any clause in section 14 of the Central Sales Tax Act, 1956 are different commodities and therefore, sales tax whether can be charged for sale of a commodity though it emerges from another commodity mentioned in same sub-clause. Out of the cases cited the first one t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth statutory provisions and the case laws referred to thereunder, following findings were recorded in the said judgment: "As we all know, sales tax law is intended to tax sales of different commercial commodities and not to tax the production or 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. Where commercial goods, without change of their identity as such goods, are merely subjected to some processing or finishing or are merely joined together, they may remain commercially the goods which cannot be taxed again, in a series of sales, so long as they retain their identity as goods of a particular type. ............... It appears to us that the position has been simplified by the amendment of the law, as indicated above, so that each of the categories falling under 'iron and steel' constitutes a new species of commercial commodity more clearly now. It follows that when one commercial commodity is transformed into another, it becomes a separate commodity for purposes of sales tax." 23.. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same heading is also of no material consequence. After referring to Raghbir Chand Som Chand v. Excise and Taxation Officer [1960] 11 STC 149 (Punj) wherein it was held that ginned and unginned cotton constituted one commodity, inter alia, for the reason that ginned and unginned cotton were under the same head and thereby indicating that the Legislature looked upon ginned and unginned cotton as one and the same thing, it was held in Hajee Abdul Shukoor's case [1964] 15 STC 719 (SC) at page 728; (1964) 8 SCR 217 at page 229 that 'the fact that certain articles are mentioned under the same heading in a statute or the Constitution does not mean that they all constitute one commodity. The inclusion of several articles under the same heading may be for a reason other than that the articles constitute one and the same thing'. This means that merely being put under one head would not make two different commodities a single item for purposes of taxation. 16.. When dressed hides and skins are different goods from raw hides and skins, we do not find anything in the language of section 14 of the Central Sales Tax Act which can lead us to the conclusion that these two different commodities we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and skins and such levy will not fall foul of section 15 as the two goods are different taxable commodities. 27.. Mr. Bajoria, learned counsel for the petitioner, contended that the apex Court followed one line in case of various items in iron and steel but followed another line in the cases involving hides and skins and therefore, in the present case involving sub-items of goods in iron and steel, the judgments in the cases of Pyare Lal Malhotra [1976] 37 STC 319 (SC) and Telangana Steel Industries [1994] 93 STC 187 (SC) are to be followed and not the law in respect of hides and skins as decided in the cases of Hajee Abdul Shukoor and Co. [1964] 15 STC 719 (SC) and K.A.K. Anwar Co. [1998] 108 STC 258 (SC). In support of such contention, Mr. Bajoria referred to special Bench judgment of the Andhra Pradesh High Court decided in the case of Hyderabad Wire Allied Products v. Commissioner of Commercial Tax reported in [1999] 115 STC 286, holding that the judgment of the Supreme Court directly dealing with the entries in question when doubted in later judgment dealing with different entry, cannot be treated as overruled the proposition and is binding. 28. In my opinion the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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