1976 (9) TMI 85 - AT - VAT and Sales Tax

Summary

Issues:
1. Determination of whether stainless steel sheets are considered tool alloy and declared goods for taxation purposes.
2. Assessment of tax rates for the sale turnover of stainless steel sheets, stainless steel articles, and black grams.

Detailed Analysis:
Issue 1:
The High Court was tasked with determining whether stainless steel sheets are classified as tool alloy and declared goods for taxation under the Central Sales Tax Act. The Tribunal initially held that stainless steel sheets are tool alloy and should be taxed at a rate of 3%. However, the High Court declined to provide a definitive opinion, stating that further examination and hearing of both parties were necessary to make a conclusive determination.

Issue 2:
The case involved an assessee engaged in the business of stainless steel sheets and utensils, who purchased goods for resale inside Orissa but sold them outside the state through commission agents, leading to a tax assessment. The Asst. Commissioner upheld the assessment, prompting the assessee to appeal to the Tribunal. The Tribunal, after considering the provisions of the Central Sales Tax Act, concluded that stainless steel sheets are declared goods and should be taxed at 3%. Additionally, it determined that the sale turnover of black grams should also be taxed at 3%.

Further Analysis:
The Tribunal's decision was based on the interpretation of the Central Sales Tax Act and the categorization of stainless steel sheets as tool alloy steel. The Tribunal referred to a clarification by the Department of Economic Affairs, Government of India, which included stainless steel under the category of tool alloy steel. The Tribunal emphasized the significance of this clarification, indicating that even prior to the amendment of the relevant clause, stainless steel sheets were considered tool alloy steel.

The Tribunal highlighted that post-amendment, there was specific mention of 'tool alloy and special steels' in the Act, further solidifying the inclusion of stainless steel sheets under the category of declared goods. The Tribunal reasoned that the statutory recognition of tool alloy steel, which encompasses stainless steel sheets, mandated a tax rate of 3% for inter-State transactions. Consequently, the taxing authorities were deemed incorrect in assessing tax rates exceeding 3% for stainless steel sheets.

Conclusion:
The Tribunal concluded that the sale turnover of stainless steel sheets should be taxed at 3%, while the sale turnover of stainless steel articles like utensils should be taxed according to the prescribed rates in the schedule of taxable goods. The sale turnover of black grams was also determined to be taxable at 3%. The assessing officers were directed to recompute the tax liabilities based on the Tribunal's decision, with any excess tax collected to be refunded to the assessee.