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TMI Blog2010 (5) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessment year 1999-2000. Petitioner No. 1 (hereinafter referred to as, "the petitioner") is a public limited company incorporated under the Indian Companies Act, 1956 and is engaged in the business of manufacture and sales of stainless steel wires. The contention of the petitioner is that stainless steel wire is one of the species of iron and steel under section 14(iv) of the Central Sales Tax Act and, therefore, cannot be subjected to tax in excess of four per cent in view of section 15 of the Central Sales Tax Act (called "the Central Act" for brevity). Section 14(iv) of the Central Act, as it stands after its amendment from April 1, 1973, is reproduced below: "14. Certain goods to be of special importance in inter-State trade or commerce.-It is hereby declared that the following goods are of special importance in inter-State trade or commerce,- . . . (iv) iron and steel, that is to say,- (i) pig iron and caste iron including ingot moulds, bottom plates, iron scrap, caste iron scrap, runner scrap and iron skull scrap; (ii) steel semis (ingots, slabs, blooms and billets of all qualities, shapes and sizes); (iii) skull bars, tin bars, sheet bars, hoe-bars a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... steel M or I 10% (b) Utensils made of stainless steels. M or I 5%" Section 15 of the Central Sales Tax Act reads as follows: "15. Restrictions and conditions in regard to tax on sale or purchase of declared goods within a State.-Every sales tax law of a State shall, insofar as it imposes or authorizes 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;" Heard Sri Bharat Ji Agrawal, senior advocate, appearing for the petitioners and Sri S.P. Kesharwani, learned Additional Chief Standing Counsel. The learned counsel for the petitioner submitted that in the case of Raj Steel Rolling Mill, Moradabad reported in [1980] STJ 221 the Commissioner of Sales Tax, vide its order dated March 19, 1980 passed under section 35 of the U.P. Sales Tax Act, has held that the stainless steel is a kind of special steel and, therefore, stainless steel rods, sheets and strips fall under clause (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ol, alloy and special steels of any of the above categories" enumerated in item (ix) of clause (iv) of section 14 of the Central Sales Tax Act. If it falls under the aforesaid category, undisputedly the tax under the State law cannot be levied more than four per cent in view of section 15 of the Central Sales Tax Act. The following question emerges for consideration: "Whether stainless steel is an alloy and special steel and if it is so whether being qualified by the word of any of the above categories it includes stainless steel wire while wire is not enumerated in any of the sub-items No. (i) to (viii)?" The learned counsel for the petitioner placed reliance upon the decision of the Commissioner of Sales Tax in the case of Raj Steel Rolling Mill, Moradabad reported in [1980] STJ 221 wherein stainless steel is held as a kind of special steel. Reliance is also placed on the decision of the Madras High Court in the case of Hindustan Wires Limited v. State of Tamil Nadu [1992] 86 STC 1 wherein stainless steel has been held as alloy and special steel, enumerated under sub-item (ix) of section 14 of the Central Act. Reliance is also placed on the Government of India Reference No. F N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e carbide particles and the matrix in the presence of an electrolyte. 6.. It is, therefore, obvious that the stainless steel is a kind of special steel. Stainless steel rods, sheets and strips fall under clause (ix) of section 14. Since stainless steel comes under the category of iron and steel as defined in section 14 of the Central Sales Tax Act, it is taxable at the point of sale to the consumer at the rate of 4 per cent under Notification No. ST-II-8448/X. dated October 1, 1975. The question is, therefore, answered accordingly." While coming to the conclusion that stainless steel is an alloy and special steel, the Division Bench of the Madras High Court in the case of Hindustan Wires Limited v. State of Tamil Nadu [1992] 86 STC 1 has observed as follows (at page 7 of STC): "14. Our first endeavour will be to find out the meaning to be attached to the words 'iron and steel, that it to say'. We will refer to the meaning given by the Indian Standard (IS: 1956-1962) Glossary of Terms relating to iron and steel, which is relevant for our purpose: '2.10. Alloy-A metallic substance consisting of two or more elements, one of which at least is a metal. It is generally ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sive and oxidising influences. The best known form of stainless steel is 18.8, an austenitic steel containing about 18 per cent chromium, eight per cent nickel, the carbon content being kept low. See also entries for stainless steel under "annealing", "welding", and "lubricants". A suitable solution for cleaning 18.8 stainless and similar qualities is 35 per cent hydrochloric acid, five per cent nitric acid, five per cent restrainer and 55 per cent water. See also "chromium oxide scale". Wire-rod: Produced from a steel billet by passing, when hot, through a series of rolls by which it is reduced in cross-sectional area and consequently elongated to form a coil; it is the semi-finished product from which wire is made, and is generally about 5 S. W.G. (0.212 inch) to 9.16 inch diameter. The higher alloy and stainless qualities are rolled in semi-continuous mills, but qualities up to at least 0.50 per cent carbon are regularly rolled in continuous mills, the latest mills having four strands and weekly output of over 7,000 tons, at finishing speeds up to 8,500 ft. min. on 0.212 inch rod, producing coils of 1,000 lb.' We will then refer to Indian Standard-Classification of steel. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... speed steel or silico-manganese steel, for example. Alloy steel. All steels contain carbon and small amounts of silicon, sulphur, manganese and phosphorous. Steels which contain intentional additions of elements other than those or in which silicon and manganese are present in large amounts are termed alloy steels. The alloying elements are deliberately added to produce certain properties in the product. In Government statistics, alloy steel figures relate to steel, other than highspeed steel, containing any of the elements named below and in the quantities indicated: Chromium or nickel 0.4 per cent or more, Mo, W or V.C. one per cent or more, Mn 10 per cent or more. Stainless steel. A corrosion-resistant type of alloy steel which contains a minimum of 12 per cent chromium. The latter is the element which confers upon the steel its property of resisting attack by the atmosphere or by a number of chemical reagents. The effect is attributed to the ability of chromium to form a thin, but very tenacious, film of oxide at the surface of the alloy which resists attack by most oxidising agents. The resistance to corrosive attack is enhanced if nickel be added, and is further improved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly different commercial commodities, from mere scrap iron and leftovers of processes of manufacturing to 'wires' and 'wheels, tyres, axles, and wheel sets'. Some of the enumerated items like 'melting scrap' or 'tool alloys' and 'special steels' could serve as raw material out of which other goods are made and others are definitely varieties of manufactured goods. If the subsequent amendment only clarifies the original intentions of Parliament, it would appear that heading (iv) in section 14, as originally worded, was also meant to enumerate separately taxable goods and not just to illustrate what is just one taxable substance: 'iron and steel'. The reason given, in the Statement of Objects and Reasons of the 1972 Act, for an elucidation of the 'definition' of iron and steel, 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'. Appa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation should not be rendered redundant and should be given effect. Some meaning must be given to the words used in the section. Thus wires being mentioned in sub-clause (xv) are not covered under "alloy and special steel" of sub-clause (ix). In the case of Nathi Devi v. Radha Devi Gupta reported in [2005] 2 SCC 271 it has been held by the apex court that while interpreting a statute effort should be made to give effect to each and every word used by the Legislature. The courts always presume that the Legislature inserted every part of a statute for a purpose and the legislative intention is that every part of the statute should have effect. In the case of Dr. Ganga Prasad Verma v. State of Bihar reported in [1995] Supp 1 SCC 192 it has been held by the apex court that where the language of the Act is clear and explicit, the court must give effect to it, whatever may be the consequences, for in that case the words of the statute speak the intention of the Legislature. In the case of Union of India v. Hansoli Devi reported in [2002] 7 SCC 273 it has been held by the apex court that it is a cardinal principle of construction of a statute that when the language of the statut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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