TMI Blog1986 (1) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... r the KST Act and CST Act and on their sales to the assessee, it had paid sales tax due to the State of Karnataka under the KST Act. 3.. For the assessment period from 1st July, 1977, to 30th June, 1978, or for the year 1977-78, the assessee filed its return before the ACCT inter alia disclosing sales turnover of GI pipes of Rs. 8,28,139.60 with which only we are concerned claiming total exemption from payment of sales tax on the same, on the ground that they were "declared goods" which had suffered tax at the hands of GST Ltd. and as a second dealer it was not liable to pay sales tax on the said sales turnover under the KST Act. On 26th November, 1980, the ACCT completed the assessment for the said period and allowed the said exemption claimed by the assessee. 4.. On July 14/19, 1983, the Commissioner in exercise of the suo motu power of revision conferred on him by section 22-A of the KST Act, issued a show cause notice to the assessee proposing to modify the aforesaid order of the ACCT and bring the exempted sales turnover of "GI pipes" to tax which was naturally opposed by the assessee in writing as also at the oral hearing afforded thereto under the Act. On 16th January, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has urged that GI pipes which were not deliberately included in section 14(iv)(xi) of the CST Act reproduced as entry 2(a)(xi) of the Fourth Schedule to the KST Act, was commercially a different product and was not "declared goods" exhaustively enumerated in section 14 of the CST Act and, therefore, the same attracts multipoint levy as unclassifiable goods under section 5(1) of the KST Act. 9.. In allowing the claim made by the assessee for exemption as second dealer of GI pipes the ACCT expressed thus: "The assessee-firm have claimed exemption on a turnover of Rs. 8,28,139.60 on account of sales of second dealer in respect of tax-suffered machinery, gun powder, oil and electrical goods, etc. In support of their claim for exemption on this account, the assessee-firm have filed list of purchases from the registered dealers. These transactions of purchases are verified with reference to the invoices and form 32 declarations are found to have been stamped on the purchase invoices. The assessee-firm has also filed dealerwise purchases list. The invoices are examined with the list filed and found the same in order. In view of the fact that the assessee has become second dealer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court reported in State of Tamil Nadu v. Pyare Lal Malhotra [1976] 37 STC 319 (SC) had not been rendered. 6.. For the reasons stated above, the contentions of the assessee-respondent are not tenable. In view of the above discussion and also for the reasons already furnished in the notice, it is considered that GI pipes are not goods falling under entry 2(a)(xi) of the Fourth Schedule and that they are unclassified goods taxable under section 5(1) of the Karnataka Sales Tax Act, 1957....." On this conclusion, the Commissioner directed the ACCT as hereunder: "The assessment order dated 26th November, 1980, passed by the Assistant Commissioner of Commercial Taxes (Assessments), Belgaum, read (1) above is set aside only to the extent that it allows exemption on the sales turnover of GI pipes. The assessing authority is directed to pass fresh orders after determining the sales turnover of GI pipes and subjecting the same to tax under section 5(1) of the Karnataka Sales Tax Act, 1957." As an appellate authority under the Act, we are first required to examine the correctness of the reasons given by the Commissioner and then set out our own reasons either to accept them or to dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re does not suppose our merchants to be naturalists, or geologists, or botanists'. 33.. The above Planters Nut case 1951 CLR 122 was referred to with approval by this Court in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer [1961] 12 STC 286 (SC); [1962] 1 SCR 279; AIR 1961 SC 1325. In Ramavatar's case [1961] 12 STC 286 (SC), this court was concerned with the meaning of the word 'vegetables' occurring in C.P. and Berar Sales Tax Act, 1947. This court held as follows: 'But this word must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. It has not been defined in the Act and being a word of every day use it must be construed in its popular sense meaning "that sense which people conversant with the subjectmatter with which the statute is dealing would attribute to it". It is to be construed as understood in common language.' 34.. Again in Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant Singh Charan Singh [1967] 19 STC 469 (SC); AIR 1967 SC 1454 this court had to deal with the word 'charcoal' used in the Madhya Pradesh General Sales Tax Act. It was contended in that case that 'charcoal' would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... object is to show that V.P. latex is resin which is 'an omnibus term for a variety of hard brittle, solid or semi-solid organic substances'. It is, however, seen from an extract from the Dictionary of Rubber Technology, 1969 edition, by Alexander S. Craig, produced by Mr. Sanghi that 'vinyl pyridine is one component of terpolymer of butadiene styrene and vinyl pyridine used in latex form to promote good adhesion between rubber and textiles, particularly rayon and nylon'. We find the same description reiterated in a book 'Latex Natural and Synthetic' by Cook (a Reinhold Pilot Book) where at page 145 it is stated that 'there is one type of speciality rubber latex that deserves special notice. This is terpolymer of butadiene, styrene, and 2-vinyl pyridine. Under the trade names of "Gentac" and "Pyratex" it is extensively used in nylon tire cord saturation because it gives better adhesion between the cord and the rubber in which the cord is imbedded than do other latices'. Mr. Sanghi, however, emphasises that V.P. latex is merely an adhesive and so is akin to resin and not to rubber. 36.. We are, however, unable to accept the submission. It is clear that meanings given to articles in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pradesh General Sales Tax Act, 1958, included charcoal or not and this court observed thus: 'Now, there can be no dispute that while coal is technically understood as a mineral product, charcoal is manufactured by human agency from products like wood and other things. But, it is now well-settled that while interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or the 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.' Viewing the question from the above angle this Court further observed that both a merchant 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' and held that 'charcoal' fell within the concerned entry No. 1 of Part III of Schedule II of the Act. 5.. Having regard to the aforesaid well-settled test the question is whether clinical syringes could be regarded as 'glassware' falling within entry 39 of the First Schedule to the Act? It is true that the dictionary meaning of the expr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary, Volume IV, page 33) "'galvanize'-to put a covering of metal esp. zinc, over (a sheet of another metal, esp. iron), by using electricity: galvanized iron-compare Electroplate 2. to shock (someone) into action: The fear of losing his life galvanized him (into fighting back)." (vide: "Longman Dictionary of Contemporary English" by Chief Editor Paul Procter, page 467) The term is defined in the Condensed Chemical Dictionary as hereunder: "galvanizing: Coating of a ferrous metal by passing it through a bath of molten zinc or by electrodeposition of zinc. In the former process, the iron and zinc combine to form an inter-metallic compound at the interface the outer surface being relatively pure zinc, which crystallizes as it cools to form the characteristic spangle'. The electrodeposition method gives a uniform surface which may be either dull or bright. Duration of corrosion protection is directly related to the thickness of the zinc coating. See also sacrificial protection." The treatise "Nomenclature-Explanatory Notes", Second Edition (1966), published by Customs Co-operation Council considered to be authority on the subject explains the requirements of galvanization thus: " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the bottom of the groove equal to 8 times its outside diameter, shall not develop any crack in the coating." "The Indian Standard Specification for Mild Steel Tubes, Tubulars and other Wrought Steel Fittings" (Fourth Revision) published in 1979 describes black tubes and tubes thus: "2.1. Black tube-Tube as manufactured but without any subsequent surface treatment. 2.7. Tube (pipe)-A long, hollow, open-ended object of circular or other cross-section. The term 'tube' is synonymous with the term 'pipe'." On "Galvanizing" the same book expresses thus: "12.1. Where tubes are required to be galvanized, the zinc coating on the tubes shall be in accordance with IS: 4736-1968. 12.1.1. Tubes which are to be screwed shall be galvanized before screwing." What emerges from these meanings or elucidations that are apposite is, that galvanization with zinc is done on the very steel tubes or pipes only as a protective or as anti-corrosive or as anti-resistant only to enhance their lasting qualities and utility. 14.. With the phenomenal progress in basic sciences, metallurgy and technology, galvanization which has come to stay, is undertaken as an anti-corrosive or anti-resistant mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed the same view. We need hardly say that this accords with what we have earlier independently expressed. 20.. Sri Rajendra Babu is undoubtedly right in contending that section 14(iv)(xi) of the CST Act does not use "galvanized" tubes and that term had been employed in section 14(iv)(vi) and (xv) of that Act. Section 14(iv)(xi) of the CST Act for some inexplicable reason or by inadvertent omission does not employ the words "galvanised" and "black tubes" which had been used in the other parts of that section. We are of the view that this omission by itself cannot be decisive to hold that the legislature had deliberately excluded galvanized and black tubes from the purview of section 14(iv)(xi) which has been bodily lifted and enacted as entry No. 2(a)(xi) of the KST Act. On the application of the progressive rule of construction of statutes enunciated by the Supreme Court in K.P. Varghese v. Income-tax Officer, Ernakulam [1981] 131 ITR 597 (SC); AIR 1981 SC 1922 reiterated in Commissioner of Income-tax, Bangalore v. Gotla ILR (1985) Kar 3749 (SC) we are of the view that notwithstanding the omission of those terms, steel tubes include GI pipes and the latter cannot be excluded fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e one expressed by us on which basis they have completed the assessments against GST Ltd. 25.. On the foregoing discussion, we hold that "steel tubes" include galvanised and black tubes and they fall within section 14(iv)(xi) of the CST Act and entry No. 2(a)(xi) of the KST Act. From this it follows that the exemption granted by the ACCT on the ground that the turnover of GI pipes had suffered tax and was not exigible to tax at the hands of the appellant as second dealer was correct and legal and there were no grounds for the Commissioner to interfere with the same. 26.. On the view we have expressed on point No. 1 the appellant is entitled to succeed in its appeal without examining and deciding the other two points formulated by us. But, as both sides have addressed their full arguments on those points and they are likely to arise now and then before this Court, we consider it proper to record our findings on those points also. We, therefore, now proceed to examine the other two points in their order. Re: Point No. 2. 27.. Sri Srinivasan has urged that letter No. 24/3/73-S.T. (P.T.) dated 20th November, 1973, addressed by Government of India (GOI) to all the State Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er may be the source of power, with which aspect it is not necessary to dilate at this stage, it is difficult to hold that it is a direction of GOI to the State Governments and the authorities administering the KST Act. We have, therefore, no hesitation in holding that the said letter is not a direction to the authorities administering the KST Act. 30.. The CST Act in general and section 9 in particular of that Act does not empower GOI to issue directions to the authorities functioning under the local sales tax laws of the country. If that is so, then the same cannot be construed as a direction under the CST Act, much less a binding direction, thereunder. We are also of the view that the same cannot also be construed as an administrative direction issued by GOI under article 256 of the Constitution. If that is so, the question of implicit compliance with the same either by Government of Karnataka or the authorities under the KST Act does not arise. We have, therefore, no hesitation in rejecting this contention of Sri Srinivasan. Re: Point No. 3. 31.. Sri Gandhi has urged that the Commissioner, exercising the powers conferred by section 3-A of the KST Act, had issued directions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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