Declared goods treatment for bailing hoops turned on whether processing changed their identity as rolled metal products.

Bailing hoops sold from rolled metal products were treated as declared goods because the decisive question was whether they retained the identity of the original iron plates or became a new commercial commodity through processing. Applying the Full Bench view that joining and painting do not cause a substantial change in identity, the goods were regarded as remaining in the same form for sales tax purposes. On that basis, bailing hoops fell within the declared goods entry under the Madhya Pradesh General Sales Tax Act, 1958, and the reference was answered in favour of the assessee.

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Issues: Whether bailing hoops sold by the assessee were iron plates sold in the same form in which they were directly produced by the rolling mill and therefore constituted declared goods liable to tax at the rate applicable to such goods.

Analysis: The reference turned on the character of bailing hoops for the purpose of the Madhya Pradesh General Sales Tax Act, 1958. The decisive consideration was whether the goods retained their identity as iron plates or whether the process involved brought about such a change as to create a new commercial commodity. The binding Full Bench view treated iron hoops, being steel strips, as falling within the description of rolled steel sections and held that joining and painting did not effect a substantial change in identity. On that reasoning, the goods did not cease to be in the same form merely because they were converted into hoops.

Conclusion: Bailing hoops were held to be declared goods under section 2(e) and entry 5 of Part I of Schedule II of the M.P. General Sales Tax Act, 1958, and the reference was answered in favour of the assessee.

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