2010 (4) TMI 347 - SC - VAT and Sales Tax

Classification- (i) whether the aluminium properzi redraw rods can be classified as metal under Entry 24 of the aforementioned Notification dated 30th September 1983 and (ii) when admittedly the foundation for reopening Dealer s assessment in respect of assessment year 1988-89 was the assessment in the case of HINDALCO in which case after the remand by the High Court assessment for that year has attained finality can the Revenue be permitted to take a different view in the case of the Dealer from that taken in the case of HINDALCO in respect of the same assessment year? Held that- authorities cannot be permitted to take different stand in case of dealer in respect of similar item for same assessment year.

Summary

Issues:
Classification of 'properzi' redraw rods under Entry 24 of U.P. Trade Tax Act, 1948.
Consistency in tax treatment between different dealers for the same assessment year.

Analysis:

*Classification of 'properzi' redraw rods under Entry 24:*
The case involved a dispute regarding the classification of 'properzi' redraw rods for tax assessment purposes under Entry 24 of the U.P. Trade Tax Act, 1948. The Dealer contended that the rods should be considered as primary metal and taxed at a lower rate, while the Revenue argued that they were a commercially different commodity and should be taxed as an unclassified item. The High Court, relying on a previous decision, classified the rods as unclassified items. However, the Supreme Court analyzed the previous decision and concluded that a distinction had been made between 'properzi' redraw rods and other aluminium products. The Assessing Officer's decision to classify the rods as primary metal was upheld and had attained finality as it was not challenged further. The Court refrained from expressing an opinion on the issue due to a pending reassessment of a similar case involving HINDALCO for different assessment years.

*Consistency in tax treatment between different dealers:*
The second issue addressed the consistency in tax treatment between different dealers for the same assessment year. The basis for reopening the Dealer's assessment was the view taken in HINDALCO's case, where the rods were initially classified differently but later reclassified as primary metal. The Court held that different interpretations of the same entry by the same authority on the same facts could violate the equality clause under Article 14 of the Constitution. As the foundation for reopening the assessment vanished after HINDALCO's reassessment, the Revenue was not permitted to take a different stand in the Dealer's case for the same assessment year. The Court concluded that the High Court's decision to distinguish between HINDALCO and the Dealer was unsustainable, and the appeal was allowed in favor of the Dealer, restoring the Tribunal's order.

In summary, the Supreme Court clarified the classification of 'properzi' redraw rods under Entry 24 and emphasized the importance of consistent tax treatment between dealers for the same assessment year to uphold the principles of equality under the Constitution.