TMI Blog2010 (5) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 insofar as it relates to the imposition of tax on wires made wholly or principally of stainless steel in excess of four per cent, as illegal, invalid and void and further seeking a direction in the nature of writ of certiorari quashing the notice dated March 27, 2006, passed by the Deputy Commissioner (Assessment), Trade Tax, Ghaziabad, under section 21 of the U. P. Trade Tax Act, 1948 (called, the Act , for short) and order dated March 27, 2006, passed by the Additional Commissioner, Grade I, Trade Tax, Ghaziabad Zone, Ghaziabad, under section 21(2) of the Act for 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncipally of stainless steel M or I 12% (c) Wares and surgical instruments made wholly or principally of stainless steel M or I 8% Notification No. T. I. F.-2-2375/XI-9(251)/97-U. P. Act-15-48- Order-98, dated November 23, 1998: S.No. Description of goods Point of tax Rate of tax percentage 8(i) Sheets and circles made wholly or principally of stainless steel M or I 15% (ii) All remain articles (excluding wares and surgical instruments') made wholly or principally of stainless steel M or I 15% (iii) (a) Surgical instruments made wholly or principally of stainless steel excluding utensils made of stainless 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire is mentioned in clause (xv), therefore, it is not covered under special steel mentioned in sub-clause (ix). He further submitted that this honourable court in the case of Commissioner of Sales Tax v. Industrial Mill Stores reported in [1980] 5 STI 273 (All) has held that stainless steel is not covered under iron and steel as defined under section 14(iv) of the Central Sales Tax Act. Having heard learned counsel for the parties, we have considered the rival submissions and the various documents filed by both the parties. The fundamental question for consideration by us is whether the stainless steel wire falls under the category tool, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t common alloy in this group contains 13 per cent chromium and approximately 0.3 per cent carbon. Due to displacement of eutectoid point to the left, this steel is of approximately cutectoid composition. t is widely used in stainless steel knives. 5.. The stainless steels in this group are of the martensitic type, the structure being obtained by rapid cooling. If these steels are allowed to cool slowly carbides will be precipitated, with consequent loss in corrosion-resistance. This is due partly to chromium coming out of solution in the form of carbides, thus leaving the matrix law in chromium, and partly to subsequent electrotytic action between the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l (IS: 1956-1962-Amendment No. 1 May, 1965): 'Red (wire-rod)-Wire-rod is of any shape, generally round and between 5 to 14 mm. In diameter, and is intended for conversion into wire. A rod that has been sized would be classified as wire provided it is between 5 to 12.5 mm in diameter. It will be classified as a cold rolled bar if it is above 12.5 mm in diameter. The term wire bar is the usual term which has later on come to be designated as wire-rod and hence wire bar and wire-rod are synonyms.' We will now refer to Wire Encyclopaedia (from Wire Industry Year Book 1968): 'Stainless steel: High chromium steel, often including nickel, which is resistant to corrosive 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: Produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vanadium with a combined content by weight of seven per cent or more of carbon and three to six per cent of chromium. Liquid steel obtained by the abovementioned processes, with or without further refining, is generally run into a receiving ladle. At this stage alloying elements or de-oxidising agents, in solid or liquid form, may be added. This may be done in a vacuum to ensure freedom from gaseous impurities. Steels obtained by all these processes are divided, according to their content of alloying elements, into non-alloy steels and alloy steels (stainless or other). They are further divided in accordance with their special properties into free-cutting steel, silicon-electrical steel, high 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ron and steel in section 14 of the Central Act came up for consideration before the four-judge Bench of the apex court in the case of State of Tamil Nadu v. Pyare Lal Malhotra reported in [1976] 37 STC 319; [1976] UPTC 282. The apex court held that list of the items mentioned under the heading iron and steel is exhaustive. Each sub-category or a sub-item retains its identity as a commercially separate item for purposes of sales tax so long as it retains the sub-division. For the purposes of the present case it would be relevant to refer the following paragraph of the aforesaid decision (at page 322 of STC): 5. It will be seen that 'iron and steel' is now divided into 16 categories which clearly embrace widely 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 inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned in sub-item (ix) will cover the stainless steel wire. The words alloy and special steel are qualified by the words of any of the above categories . The language is plain and unambiguous. Therefore, we are of the view that only those items which are mentioned in subitems (i) to (viii) are covered under alloy and special steel . It appears that by using the words of any of the above categories the intent of the Legislature is to cover only those alloys and special steel which are in the nature of raw material and in primary form and not which are derivatives of the stainless steel manufactured out of the primary form of the stainless steel. It is a settled principle of law that the words used in the section, rule or notification 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 use ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
