Declared goods protection prevents repeat taxation on M.S. wires drawn from tax suffered wire rods under the same statutory sub-item.

Declared goods under sections 14 and 15 of the Central Sales Tax Act remain protected from repeated State taxation when both the parent material and the processed product fall within the same sub-item. M.S. wire rods and M.S. wires were treated as one declared-goods category under the relevant sub-item, so processing the rods into wires did not remove the statutory protection. As a result, M.S. wires drawn from tax suffered M.S. wire rods could not be taxed again on sale, and notices proposing such levy were unsustainable.

---

---

Issues: Whether M.S. wires drawn out of M.S. wire rods that had already suffered tax in the State could again be taxed on sale under the Karnataka Sales Tax Act, 1957, having regard to sections 14 and 15 of the Central Sales Tax Act, 1956 and the corresponding entry in the State Schedule.

Analysis: The declared-goods scheme under sections 14 and 15 of the Central Sales Tax Act, 1956 limits State taxation on goods of special importance and prevents multiple taxation beyond the statutory limits. The relevant inquiry was whether wire rods and wires falling within sub-item (xv) of item (iv) of section 14 constitute one taxable commodity for this purpose. The Court held that each sub-item in section 14 is a separate category of declared goods, and where both the parent material and the resulting product remain within the same sub-item, the later product does not lose the protection of sections 14 and 15 merely because it is produced by processing. The Court distinguished authorities dealing with goods falling under different sub-items and relied on the statutory scheme, contemporaneous governmental clarification, and the earlier departmental construction that treated M.S. wires drawn from tax suffered M.S. rods as not separately taxable again.

Conclusion: M.S. wires drawn from tax suffered M.S. wire rods could not be taxed again on sale, and the notices proposing such levy were unsustainable.

Final Conclusion: The writ petitions succeeded, the legal position was declared in favour of the petitioners, and the respondents were directed to proceed only in accordance with that declaration.

Ratio Decidendi: Where declared goods are specified within the same sub-item of section 14 of the Central Sales Tax Act, 1956, a product emerging from tax suffered goods within that same sub-item retains the statutory protection against repeated taxation under section 15.

---