2016 (7) TMI 1425 - HC - VAT and Sales Tax

Classification of goods - Brass Wire - Whether on the facts and in the circumstances of the case the appellant s product brass wire would be included in entry no.27 of Schedule IIA of the Act? - Held that - the learned Tribunal has committed an error in interpreting the meaning of wire because entry No.27 includes sheets rods brass slabs blocks ingots circle and scrap of nonferrous metals and alloys and said entry No.27 schedule IIA shows that the articles include in this entry is inclusive and therefore the goods brass wire sold by the appellant would be classified in entry No. 27 - appeal allowed - decided in favor of assessee.

Summary

Issues:
Classification of brass wires under entry No.27 of Schedule IIA of the Act challenged in appeal.

Analysis:
The appellant, engaged in trading brass wires, classified them under entry No.27 of Schedule IIA for the year 1989-90. The Sales Tax Officer accepted this classification initially. However, objections during an audit led to a reclassification by the Assistant Commissioner under entry No.13 of Schedule III. The Gujarat Sales Tax Tribunal upheld this reclassification in two orders dated 18/08/2006 and 24/11/2006, which the appellant challenged in the present appeal.

The main contention by the appellant was that the Tribunal erred in its interpretation of the word "wire" and failed to apply relevant legal precedents, specifically citing the decision of the Hon'ble Supreme Court in Telangana Steel Industries case. The appellant argued that brass wires should be classified under entry No.27, emphasizing that wires are integral to rods and should not be considered a separate taxable commodity.

In contrast, the Assistant Government Pleader supported the Tribunal's decision, asserting no error on their part. However, the High Court, after considering the arguments and the Telangana Steel Industries case, found that the Tribunal misinterpreted the meaning of "wire." Entry No.27's inclusive nature encompassed brass wires, leading to the conclusion that the appellant's product should indeed be classified under entry No.27 of Schedule IIA. The Court held in favor of the appellant, quashing the impugned orders and answering the posed question in favor of the appellant, thereby allowing the appeal.

In conclusion, the High Court's judgment overturned the Tribunal's decision and clarified the correct classification of brass wires under entry No.27 of Schedule IIA, providing a detailed analysis based on legal interpretations and precedents cited during the proceedings.