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The Commissioner, Commercial Tax Versus S/S Laxmi Wires Industrial Area

2017 (5) TMI 129 - ALLAHABAD HIGH COURT

Levy of VAT - steel wires - Tribunal was of the view that when steel rod is used to manufacture steel wires, then the product so manufactured would not be liable to be taxed under the provisions of the U.P. Trade Tax Act, as tax has already been paid upon purchase of steel rod - Held that: - It is admitted that steel wire is a distinct commodity brought into existence pursuant to manufacturing process undertaken. Since a new commodity has come into existence pursuant to manufacturing activity, T .....

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er has remained pending since long, this Court is not inclined to adjourn the matter any further, and the revision is taken up for hearing. The Tribunal upon a circular issued by the Commissioner, Sales Tax, dated 4th March, 2002, has taken a view that when steel rod is used to manufacture steel wires, then the product so manufactured would not be liable to be taxed under the provisions of the U.P. Trade Tax Act, as tax has already been paid upon purchase of steel rod. Learned Standing Counsel h .....

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ufacture a new commodity comes into existence, the same shall be liable to be taxed under the provisions of U.P. Trade Tax Act, and would not be exempted. Paras 30, 33, 34 and 37 of report is reproduced:- "30. It is thus clear, that if the object of newly substituted clause (iv) of Section 14 of the Central Act was to make iron and steel taxable as one substance, the item could have been "Goods of iron and steel" or, to be more clear, "Iron and steel irrespective of change of .....

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is plain and unambiguous and that the items which are mentioned there are "tools, alloy and special steel". By using the words "of any of the above categories" in entry Nos. (ix) would refer to entries (i) to (viii) and it cannot and does not refer to entry no (xv). However, entry (xvi) of Clause (iv) would be included in entry (xvi) particularly within the expression now therein any of the aforesaid categories. Therefore, the specific entry "tool, alloy and special ste .....

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