TMI Blog1995 (11) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... stances of the case, the Tribunal was justified in law in imposing tax on the pieces of cast iron, steel angles again when the tax has already been paid on the said commodity while purchasing the same in U.P. by the applicant. (b) Whether, the Tribunal was justified in law in imposing tax on bagasse? (c) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in rejecting the account books in respect of petrol unit? It has been contended by Mr. Bharatji Agarwal, learned counsel for the revisionist, in respect of the first ground that the learned Tribunal has committed an illegality by treating the cast iron, steel angles as a different commodity attracting sales tax liability. He has further submitted that these items are declared goods under section 14(iv) of the Central Sales Tax Act for which tax was paid at the point of purchase and no tax on sale of these goods could be levied in view of the special provisions of section 15 of the Central Sales Tax Act. The learned Standing counsel has replied that the iron scraps and steel angles were new commodities entirely different from the declared commodities and were exigible to sales tax und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions, namely: (a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed four per cent of the sale or purchase price thereof, and such tax shall not be levied at more than one stage; (b) where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter-State trade or commerce, and tax has been paid under this Act in respect of the sale of such goods in the course of inter-State trade or commerce, the tax levied under such law shall be reimbursed to the person making such sale in the course of inter-State trade or commerce in such manner and subject to such conditions as may be provided in any law in force in that State; (c) where a tax has been levied under that law in respect of the sale or purchase inside the State of any paddy referred to in sub-clause (i) of clause (i) of section 14, the tax leviable on rice procured out of such paddy shall be reduced by the amount of tax levied on s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les Tax Act and even after the process of galvanising, it remains a steel tube and the view of the Kerala High Court was set aside. In the case of Telangana Steel Industries v. State of Andhra Pradesh [1994] 93 STC 187; 1994 UPTC 847, the honourable Supreme Court considered the nature of iron wires with reference to section 14(iv)(xv) of the Central Act and held that iron wires cannot be taken as a separate taxable commodity and if wire rods which were purchased by the appellant had suffered sales tax, the same should not be realised from the sale of wires by virtue of special treatment to such declared goods under section 15 of the Central Act. In the case of State of Tamil Nadu v. Pyare Lal Malhotra [1976] 37 STC 319; 1976 UPTC 282, the honourable Supreme Court considered the question of single point tax on iron and steel goods and on interpretation of section 14 of the Central Act held that each of the categories falling under "iron and steel" in clause (iv) of the Central Sales Tax Act (even prior to its amendment by Act No. 61 of 1972) constitutes a new species of commercial commodity. The provisions of the Tamil Nadu General Sales Tax Act were not violative of section 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ria for determining whether a commodity is consumed in the manufacture of another. The generally prevalent test is whether the article produced is regarded in the trade, by those who deal in it, as distinct in identity from the commodity involved in its manufacture. Commonly, manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and there may be several stages of processing and a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place. Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of another. Although it has undergone a degree of processing, it must be regarded as still retaining its original identi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the residue left after going through the process of the acids and chemicals, continued and remains to be the groundnut oil and is taxable at 1 per cent. He has further cited a decision of a division Bench of this Court in the case of Kisan Sahkari Chini Mills Limited, Gadarpur, Nainital v. State of Uttar Pradesh STI 1989 All. 294. In this case the specific question regarding nature of bagasse was considered and this Court has held that so far as bagasse is concerned, it is the residue from the milling process of the sugarcane. It consists of body, fibre, some unextracted juice and 40-50 per cent of the water. The learned Tribunal while holding that bagasse is a different commodity attracting liability of sales tax on its sale, has not correctly followed the decision in the case of Deputy Commissioner of Sales Tax v. Pio Food Packers [1980] 46 STC 63. In my opinion, the finding recorded by the learned Tribunal that bagasse is a different commodity is not correct. The bagasse is a residue of the sugarcane left after its processing and continues to be the residue of the sugarcane and does not become a different commodity, if its juice, sucrose and water contents are squ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount books prescribed by law. There is no doubt that section 12 of the Act prescribes maintenance of true and correct account showing the value of goods sold and bought by the dealer in the ordinary course of business and also to maintain the stock books in respect of the raw material as well as the products obtained at every stage of production, in the case of manufacturer. Rules 72 and 73 of the U.P. Sales Tax Rules prescribe as to how accounts will be maintained and the period for which accounts will be retained and preserved. I do not find any provision whereby the dealers are enjoined to prepare the bills at the same time at which the credit memos are issued and the goods are sold in credit. The accounts are maintained as and when the purchases and sales are made. When the sale is made on credit, a credit memo is issued and that by itself is sufficient to show the true and correct account of the sales on credit. The bill for payment in respect of the credit sales can be prepared according to the agreement between the seller and the purchaser, but it must finally be prepared and maintained and disclosed in the turnover of the sales for the particular month. It does not matter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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