TMI Blog1976 (1) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... act and law as still survive for determination after the decision given above of the question considered by us. - C.A.58, 59, 880, 881, 882, 883 of 1971, Writ Petition No. 437 of 1967, & 520 of 1968, - - - Dated:- 19-1-1976 - RAY A.N., BEG M.H., SARKARIA R.S. AND SHINGHAL P.N. JJ. Gobind Das, Senior Advocate, (P.H. Parekh and Miss Manju Jetley, Advocates, with him), for the intervener (Durga Steel). P. Ram Reddy, Senior Advocate (A.V. Rangam and Miss A. Subhacate, Advocates, with him), for the appellants in C.A. Nos. 58-59 of 1971. Sachindra Chaudhury, Senior Advocate (Mrs. S. Gopalakrishnan, Advocate, with him), for the respondent. -------------------------------------------------- The judgment of the Court was delivered by BEG, J. -The two Civil Appeals Nos. 58-59 of 1971 arise out of a judgment of a Division Bench of the Madras High Court dismissing two writ petitions filed against notices issued by a Commercial Tax Officer showing institution of sales tax assessment proceedings in respect of certain iron and steel goods for the assessment year 1965-66 in Writ Petition No. 437 of 1967 and for the assessment year 1966-67 in Writ Petition No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 of the Central Sales Tax Act (hereinafter referred to as "the Central Act"). It was claimed, on behalf of the dealers, sought to be assessed in each case, that by reason of the restrictions imposed by section 15 of the Central Act, the levy of tax under the Tamil Nadu Act was not permissible. Section 14 of the Central Act declares certain goods enumerated there to be "of special importance in inter-State trade or commerce". The list of goods given there at No. (iv), as it stood in 1968, was: "(iv) iron and steel, that is to say,- (a) pig iron and iron scrap; (b) iron plates sold in the same form in which they are directly produced by the rolling mill; (c) steel scrap, steel ingots, steel billets, steel bars and rods; (d) (i) steel plates, } sold in the same form (ii) steel sheets, } in which they are (iii) sheet bars and tin bars, } directly produced by (iv) rolled steel sections, } the rolling mill." (v) tool alloy steel; By the Central Sales Tax (Amendment) Act 61 of 1972, clause (iv) was redrafted. It now reads as follows: "(iv) iron and steel, that is to say,- (i) pig iron and cast iron including ingot moulds, bottom plates, iron scrap, cast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... teel, was that the "definition" had led to varying interpretations by assessing authorities and the courts so that a comprehensive list of specified declared iron and steel goods would remove ambiguity. The Select Committee, which recommended the amendment, called each specified category "a sub-item" falling under "iron and steel". Apparently, the intention was to consider each "sub-item" as a separate taxable commodity for purpose of sales tax. Perhaps some items could overlap, but no difficulty arises in cases before us due to this feature. As we have pointed out, the statement of reasons for amendment spoke of section 14(iv) as a "definition" of "iron and steel". A definition is expected to be exhaustive. Its very terms may, however, show that it is not meant to be exhaustive. For example, a purported definition may say that the term sought to be defined "includes" what it specifies, but, in that case, the definition itself is not complete. Although, we have looked at the subsequent amendment of 1972 in order to find an indication of the original intention, because subsequent history of legislation is not irrelevant, yet, we think that, even if we confine our attention to se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " were held to introduce, "the most general concept" when followed, inter alia, by the words "right in or over land". We think that the precise meaning of the words "that is to say" must vary with the context. Where, as in Megh Raj's case A.I.R. 1947 P.C. 72., the amplitude of legislative power to enact provisions with regard to "land" and rights over it was meant to be indicated, the expression was given a wide scope because it came after the word "land" and then followed "rights over land" as an explanation of "land". Both were wide classes. The object of using them for subject-matter of legislation, was obviously to lay down a wide power to legislate. But, in the context of single point sales tax, subject to special conditions when imposed on separate categories of specified goods, the expression was apparently meant to exhaustively enumerate the kinds of goods on a given list. The purpose of an enumeration in a statute dealing with sales tax at a single point in a series of sales would, very naturally, be to indicate the types of goods each of which would constitute a separate class for a series of sales. Otherwise, the listing itself loses all meaning and would be without an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. In State of Madhya Bharat v. Hiralal [1966] 17 S.T.C. 313 at 315 (S.C.)., this court held that a dealer, who bought some scrap iron locally and imported some iron plates from outside and then converted the material into bars, flats and plates, by rolling them in his mills, and then sold them, was still entitled to exemption given to iron and steel from sales tax. But, in that case, the language of the provision giving the exemption justified this interpretation. The exemption was given to a sale by either an importer or a purchaser of "goods prepared from any metal other than gold or silver". In other words, the question was whether exemption was given to the substance out of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the said conversion does not involve any process of manufacture, but the scrap is made into a better marketable commodity. Before the High Court this contention was not pressed. That apart, it is clear that scrap iron ingots undergo a vital change in the process of manufacture and are converted into a different commodity, viz., rolled steel sections. During the process the scrap iron loses its identity and becomes a new marketable commodity. The process is certainly one of manufacture." It is true that the question whether goods to be taxed have been subjected to a manufacturing process so as to produce a new marketable commodity, is the decisive test in determining whether an excise duty is leviable or not on certain goods. No doubt, in the law dealing with the sales tax, the taxable event is the sale and not the manufacture of goods. Nevertheless, if the question is whether a new commercial commodity has come into existence or not, so that its sale is a new taxable event, in the sales tax law, it may also become necessary to consider whether a manufacturing process, which has altered the identity of the commercial commodity, has taken place. The law of sales tax is also conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 2(j) of the Act: "(j) 'goods' means all kinds of movable property (other than newspapers, actionable claims, stocks and shares and securities) and includes all materials, commodities, and articles (including those to be used in the fitting out, improvement or repair of movable property); and all growing crops, grass or things attached to, or forming part of, the land which are agreed to be severed before sale or under the contract of sale." Section 4 of the Tamil Nadu Act lays down: "4. Tax in respect of declared goods.-Notwithstanding anything contained in section 3, the tax under this Act shall be payable by a dealer on the sale or purchase inside the State of declared goods at the rate and only at the point specified against each in the Second Schedule on the turnover in such goods in each year, whatever be the quantum of turnover in that year." Item No. 4 of the Second Schedule specifies the rates of tax in accordance with the Central Act. It reproduces section 14(iv) of the Central Act. On an amendment of section 14(iv) of the Central Act, serial No. 4 of the Second Schedule of the Tamil Nadu Act was also correspondingly amended so as to reproduce the six ..... X X X X Extracts X X X X X X X X Extracts X X X X
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