Exemption for end-products covers residual scrap from taxed raw material; second levy on leftover manufacturing scrap is not permitted.

Residual scrap generated while manufacturing shaped steel products from scrap already purchased and taxed was treated as part of the exempt end-products under the Tamil Nadu General Sales Tax exemption notification. Reading the notification with the Schedule entry treating iron and steel to include defectives, rejects, cuttings and end-pieces, the Court reasoned that the same raw material could not suffer a second levy merely because some residue remained after processing. The narrower contention that only the shaped products, and not the leftover scrap, fell within the exemption was rejected, and the garnishee notice was held invalid.

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Issues: Whether the scraps left over in the course of manufacturing shaped and finished products out of scrap purchased as raw materials fall within the expression "end-products" in the exemption notification issued under the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The exemption covered end-products manufactured by steel re-rolling mills, provided the raw materials out of which such end-products were manufactured had already suffered tax under the Act. The Court read the notification with item 4 of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959, which treats iron and steel to include defectives, rejects, cuttings and end-pieces. Since the petitioner had purchased scrap as raw material, paid tax on it, and the remaining scrap arose in the manufacturing process, the Court held that such residual scrap could not be subjected to a second levy. The contention that only the shaped products and not the residual scrap were covered by the exemption was rejected.

Conclusion: The residual scraps formed part of the end-products for purposes of the notification, and the garnishee notice was invalid.

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