1982 (11) TMI 165 - HC - VAT and Sales Tax

Court rules cutting iron and steel plates doesn't alter form, exempt from multiple taxation

KAC Trading Corporation Versus State of Tamil Nadu

The High Court held that the cutting of iron and steel plates into smaller sizes did not change the form of the goods, as they retained their identity, ... - Issues:Single point taxation under entry 4(b) and (d) (ii) of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959.Analysis:The case involved a dispute regarding the taxation of sheet cuttings and plate cuttings under entry 4 of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959. The assessing authority initially held that the goods sold by the assessee were taxable at multi-point, as they argued that the cuttings were not produced in the rolling mills but made after the purchase of sheets. However, the Appellate Assistant Commissioner disagreed and granted exemption on the turnover of the cuttings as second sales under entry 4. The Board of Revenue then set aside the Appellate Assistant Commissioner's order, stating that once the plates were cut into smaller pieces, they no longer retained the original form. The High Court, in its judgment, analyzed the interpretation of 'sold in the same form' as per entry 4 of the Second Schedule. They emphasized that the process of cutting iron and steel plates into smaller sizes did not change the form of the goods, as they still retained their identity as goods of a particular type. The Court referred to a Supreme Court decision highlighting that as long as the goods retain their identity after processing, they should not be subject to multiple taxation.The Court also discussed a decision of the Orissa High Court and a previous case of the Madras High Court regarding similar issues. They disagreed with the Orissa High Court's interpretation of the term 'form' and instead relied on their own previous ruling that cutting goods may not necessarily change their identity. The Court further addressed the argument presented by the Government Pleader, referencing another case, but concluded that the essence of their decision aligned with both the Supreme Court's ruling and their own previous judgments. Ultimately, the High Court held that the Appellate Assistant Commissioner's order was correct, and the Board of Revenue was unjustified in reversing it. Consequently, the Court allowed the appeal, set aside the Board's order, and reinstated the Appellate Assistant Commissioner's decision, granting costs to the appellant.