9911796707
TMI Blog2007 (7) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... activity of drawing 'iron wires' from 'wire rods'. Learned counsel for the petitioners submits that Hon'ble the Supreme Court in the case of Telangana Steel Industries v. State of Andhra Pradesh reported in (1994) 93 STC 187(S.C.) has held that the intention of legislature is to treat 'iron wires' and 'wire rods' together as a single commercial commodity for the purposes of the Central Act and no separation of the two is permissible. He further submits that the interpretation of Section 14(iv)(xv) of the Central Act in Telangana Steel Industries v. State of Andhra Pradesh (Supra) is final and binding on respondents 1 and 2 and the impugned Circular dated 31.8.1998 is wholly illegal and violative of Article 19(1)(g) of the Constitution of India. He further submits that the Commissioner, Trade Tax U.P. has wrongly interpreted the law declared by Hon'ble the Supre Court in the case of TVL K.A.K. Anwar and Company v. State of Tamil Nadu reported in (1998) 1 SCC 437 while issuing the impugned Circular dated 31.08.1998. He further submits that relying upon the judgment of the Hon'ble Supreme Court in the the case of Telangana Steel Industries v. State of Andhra Pradesh (Supra), an interi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner, Trade Tax, U.P. is arbitrary and illegal and in violation of the law declared by Hon'ble the Supreme Court. We have considered the submissions made by the learned counsel for the parties and gone through the record. The petitioner no.1 is an association of the Small Scale Industries who are engaged in various products including iron wires and petitioners 2 to 5 are dealers registered under the Central Sales Tax Act and U.P.Sales Tax Act and are engaged in the activity of drawing iron wires from wire rods. The provisions of Sections 14 and 15 of the Central Sales Tax Act are relevant in order to decide the validity of the impugned Circular dated 31.08.1998 issued by the Commissioner, Trade Tax, U.P. Lucknow. Iron and steel have been defined under Section 14(iv) of the Central Sales Tax Act. Section 14(iv) of the Central Sales Tax Act is as follows: " S.14 Certain goods to be of special importance in inter State trade or commerce -- It is hereby declare that the following goods are of Special importance in inter State trade or commerce - (i) ....... (ii) ........ (iii) ........ (iv) iron and steel, that is to say -- (i) pig iron and cast iron including ingo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax could not again be realised on the sale of iron wires drawn from wire rods. Paragraphs 15 and 18 of the report in Telangana Steel Industries v. State of Andhra Pradesh (Supra) reads as under : "15. Despite the aforesaid being the position, Shri Chari contends that wires being known as a different commercial commodity from rods, as were flour, maida and suji accepted as different from wheat in Rajasthan case (1993) 91 STC 408 (SC); JT 1993 (5) SC 128,wires would be exigible to tax on the ratio of that case. The position here being different, as both rods and wires form part of one sub items, Rajasthan case (1993) 91 STC 408 (SC) JT 1993 (5) SC 128 cannot assist the Revenue. In view of rather persistent submission made by Shri Chari on this point. We have applied our mind afresh as to whether despite rods and wires having been mentioned together in sub-item (sub-clause) (xv) they have to be taken different commercial commodities for the purpose of imposition of sales tax. Had it been that the sub-item stopped after the word "wires", we would have perhaps examined the submission of Shri Chari further, but the sub-item being what it is, we state that wires were thought of as inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Madhya Pradesh High Court in the case of Commissioner of Sales Tax v. Vora Wires (Supra) decided on 18.11.1998. A perusal of the said judgment reveals that identical question was considered by the Indore Bench of the Madhya Pradesh High Court in M.C.C. No.218 of 1994 Vora Wires v. Commissioner of Sales Tax, M.P. reported in (1997) 106 STC 286 wherein it was held that the process of drawing wires from steel wire rods is not manufacture. A different commercial product is not yielded from the aforesaid activity. Wires are considered an integral part of rods and not distinct from rods. Once wire rods have suffered sales tax, sales tax cannot again be realised on wires produced from the wire rods. Against the judgment of the Madhya Pradesh High Court rendered in M.C.C.No.218 of 1994, a Special Leave Petition No.CC 466 of 1997 was filed by the Revenue, which was dismissed by Hon'ble the Supreme Court by the Judgment and Order dated 08.07.1997. The effect of the judgment in Telangana Steel Industries v. State of Andhra Pradesh (Supra) was considered by Andhra Pradesh High Court in the case of Hyderabad Wire & Allied Products v. Commissioner of Commercial Taxes reported in (1999) 115 STC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in Telangana Steel Industries v. State of Andhra Pradesh (Supra) is per incurium cannot be accepted. Paragraph 14 of the judgment in the case of TVL K.A.K. Anwar and Company v. State of Tamil Nadu(Supra) reads as under : " 14. In Telangana Steel Industries and Other v. State of A.P. And others, 1994 U.P.T.C. 847(S.C.) : 1994 Supp (2) S.C.C. 259, the question was whether iron wires were separate commercial goods from wire rods from which they were produced. Without deciding whether both the goods was one commercial commodities or not and after referring to the decision of State of Tamil Nadu v. Pyare Lal Malhotra Etc., (1976) 3 S.C.R. 168. 1976 U.P.T.C. 282 (S.C.): and Rajasthan Roller Flour Mills Association and Anr. v. State of Rajasthan and Ors.,1993 U.P.T.C. 1247 (S.C.): 1994 Supp (1) S.C.C. 413, this Court held that as both the rods and wires form part of one sub item viz., (iv) (xv), they could not be taken as separate taxable commodity and wire rod which had been purchased by the dealers had already been subjected to sales tax, then wires which were drawn from the said rods could not be taxed again. In arriving at this conclusion, it was observed that when the sub-item sp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
