TMI Blog1972 (6) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... e exemption that was granted by the Commercial Tax Officer as, in his opinion, the view taken by the Commercial Tax Officer that the corrugated and B.P. sheets and wirenails fell under the entry "iron and steel", was erroneous in law. On appeals filed by the dealers, the Sales Tax Appellate Tribunal held that galvanised plain or corrugated sheets and B.P. sheets fell within "iron and steel", entry No. 2 in the Third Schedule to the Act, and as the sales effected by the dealers were not the first sales, those sales were exempted from payment of sales tax. The Tribunal, however, upheld the view of the Deputy Commissioner of Sales Tax that the commodity of wire-nails did not fall within the entry "iron and steel". In other words, the Sales Tax Appellate Tribunal disagreed with the Deputy Commissioner's view in respect of the sales of the first two commodities and exempted the sales of those commodities from tax, but, with regard to the sales of wire-nails, the Sales Tax Appellate Tribunal upheld the view of the Deputy Commissioner of Sales Tax that they were exigible to sales tax. Aggrieved by the orders of the Sales Tax Appellate Tribunal, the State of Andhra Pradesh has filed thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate that the Sales Tax Appellate Tribunal erred in holding that the galvanised plain and corrugated sheets and B.P. sheets fall within the entry "iron and steel". In support of this argument, the learned counsel relied upon the decisions in State of Gujarat v. Shah Veljibhai Motichand[1969] 23 S.T.C. 288., Ramavatar Budhaiprasad v. The Assistant Sales Tax Officer, Akola, and Another [1961] 12 S.T.C. 286 (S.C.). and the State of Andhra Pradesh v. Satyanarayana Kaithan (P.) Ltd[1967] 20 S.T.C. 409. The learned counsel Sri Venkatarama Reddy, appearing for the dealers, on the other hand, submitted that iron and steel are not sold as such, but are sold in acceptable forms and shapes, and merely because iron and steel are put to some process for bringing them into acceptable forms and shapes for their sales, i.e., into galvanised or B.P. sheets, they do not cease to be iron and steel. In support of his argument, the learned counsel relied upon the following decisions: (i) The State of Gujarat v. Sakarwala Brothers[1967] 19 S.T.C. 24 (S.C.)., in which the Supreme Court held that Patasa, harda and alchidana fall within the definition of "sugar"; (ii) The State of Madhya Bharat v. Hir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges, the learned Chief justice of the Gujarat High Court in The State of Gujarat v. Shah Veljibhai Motichand, Lunawada[1969] 23 S.T.C. 288., agreed with the view expressed by one of the differing Judges, Mr. Mehta, that galvanised plain or corrugated sheets fall within the entry "iron and steel" under the Bombay Sales Tax Act. The definition of "iron and steel" given by the Bombay Sales Tax Act is exactly identical with its definition given in the Andhra Pradesh General Sales Tax Act. The test of substitution of the one for the other, applied by Divan, J., was not accepted by the learned Chief justice. The learned Chief Justice observed that: "........It is no doubt true that iron sheets when corrugated cease to be raw materials for manufacture or fabrication of goods and they can be used only as corrugated iron sheets for roofing and walling but on that account they do not cease to be iron sheets having the essential character of iron. It may be that by reason of alteration of shape, iron sheets may cease to be usable for any purpose other than roofing or walling but they still remain iron sheets and do not lose the essential character of iron which they possessed as flat iron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject-matter with which the statute is dealing would attribute to it'.........." A Division Bench of this Court in the State of Andhra Pradesh v. Satyanarayana Kaithan (P.) Ltd. [1967] 20 S.T.C. 409. held that: ".........'manganese' does not include 'manganese ore' in the popular sense of the term, though from the scientist's point of view manganese ore may contain manganese........" The learned judges observed that: "........in interpreting items in statutes like the Sales Tax Act, resort should be had not to the scientific or technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their ordinary sense." In Tungabhadra Industries Ltd., Kurnool v. Commercial Tax Officer, Kurnool[1960] 11 S.T.C. 827 (S.C.)., the Supreme Court had to consider whether the hydrogenated groundnut oil (commonly called "vanaspati") was "groundnut oil" within the meaning of the rule 18(2) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. Before the High Court, the decision of which was the subjectmatter of the appeal before the Supreme Court, the dealer had claimed deduction of the purchase pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oundnut oil but still it would be groundnut oil and if so it does not seem to accord with logic that when the quality of the oil is improved in that its resistance to the natural processes of deterioration through oxidation is increased, it should be held not to be oil....." "........There is no use to which the groundnut oil can be put for which the hydrogenated oil could not be used, nor is there any use to which the hydrogenated oil could be put for which the raw oil could not be used......" In the end, the learned judge held that the hydrogenated oil will continue to be groundnut oil notwithstanding the processing which was merely for the purpose of rendering the oil more stable thus improving its keeping qualities for those who desire to consume groundnut oil. In State of Gujarat v. Saharwala Brothers[1967] 19 S.T.C. 24 (S.C.)., the question that arose for the decision of the Supreme Court was whether patasa, harda and alchidana could be regarded as "sugar", which was defined as meaning "any form of sugar containing more than 90 per cent of sucrose". A small portion of hydrogen sulphide is passed through the sugar solution for bleaching purposes, after which Patasas are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hant dealing in coal and a consumer wanting to purchase it would regard coal not in its geological sense but in the sense as ordinarily understood and would include 'charcoal' in the term 'coal'......" The Supreme Court also observed that: "....... While interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense......." In State of Madhya Bharat v. Hiralal[1966] 17 S.T.C. 313 (S.C.); A.I.R. 1966 S.C. 1546., Subba Rao, J. (as he then was), speaking for the Supreme Court, observed that: "........So long as iron and steel continued to be raw materials, they enjoyed the exemption. Scrap iron purchased was merely re-rolled into bars, flats and plates. They were processed for convenience of sale. The raw materials were only re-rolled to give them attractive and acceptable forms. They did not in the process lose their character as iron and steel. The dealer sold 'iron and steel' in the shape of bars, flats and plates and the customer purchased 'iron and steel' in that shape......." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess, although called by a different trade name in the commercial world, does not lose its essential character of the raw material. The different uses to which the raw material and the article resulting from it by reason of some process or the other, are put to, would not be decisive of the fact that the resulting article is different from the raw material that was processed. It is in this background of decided cases and by applying the tests laid down by those cases, that we will now have to decide whether or not galvanised plain or corrugated sheets and B. P. sheets are different from "iron and steel" specified in entry No. 2 in the Third Schedule to the Andhra Pradesh General Sales Tax Act. Galvanisation is nothing but coating the iron sheet with zinc by an electrical process, or some other processes, to prevent it from oxidation. The galvanisation improves the utility of the raw material of iron. Corrugation is merely wrinkling of the sheets in one direction for the purpose of making the sheets more rigid and for giving increased stiffness so as to be more suitable for roofing and walling. Corrugation results merely in the alteration of the shape of the raw material, "iro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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