Declared goods classification: wires from tax-paid wire rods may qualify for deduction, while wires from steel rods remain taxable.

Wires manufactured from tax-paid wire rods falling within the same sub-clause of section 14(iv) of the Central Sales Tax Act are treated as the same commodity for deduction under section 5(2)(a)(va) of the Bengal Finance (Sales Tax) Act, because the declared-goods scheme gives special treatment where input and output remain within the same statutory item. By contrast, wires made from steel rods, rather than wire rods, are treated as a different commercial commodity and remain taxable, subject to the restriction in section 15(a) of the Central Sales Tax Act. The assessment was therefore required to distinguish between the two sources of manufacture.

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Issues: (i) Whether wires manufactured out of tax-paid wire rods falling within the same sub-clause of section 14 of the Central Sales Tax Act, 1956 are the same commodity for the purpose of deduction under section 5(2)(a)(va) of the Bengal Finance (Sales Tax) Act, 1941. (ii) Whether wires manufactured out of steel rods, as distinct from wire rods, are a different commercial commodity and liable to sales tax subject to section 15(a) of the Central Sales Tax Act, 1956.

Issue (i): Whether wires manufactured out of tax-paid wire rods falling within the same sub-clause of section 14 of the Central Sales Tax Act, 1956 are the same commodity for the purpose of deduction under section 5(2)(a)(va) of the Bengal Finance (Sales Tax) Act, 1941.

Analysis: The relevant enquiry was whether the raw material and the finished product, both enumerated in sub-clause (xv) of section 14(iv), retained the same commercial identity for sales tax purposes. The scheme of sections 14 and 15 of the Central Sales Tax Act, 1956 was treated as restricting the State's taxing power in respect of declared goods, and the Court accepted that where both the input and the output fall within the same statutory sub-item, the ordinary market-based approach to distinct commercial commodities gives way to the specific statutory treatment of declared goods. Contemporaneous administrative clarification also supported the view that M.S. wires drawn out of M.S. wire rods on which tax had already been paid should not suffer tax again.

Conclusion: Yes. Wires manufactured out of tax-paid wire rods falling within sub-clause (xv) of section 14(iv) are to be treated as the same commodity for the limited purpose of section 5(2)(a)(va), and the deduction is allowable.

Issue (ii): Whether wires manufactured out of steel rods, as distinct from wire rods, are a different commercial commodity and liable to sales tax subject to section 15(a) of the Central Sales Tax Act, 1956.

Analysis: Where the raw material falls under one sub-clause of section 14(iv) and the manufactured product falls under another, the two are treated as different commercial commodities notwithstanding that both are declared goods. Steel rods fall under a different sub-clause from wires, so the finished wires emerging from steel rods do not enjoy the same identity for the purpose of section 5(2)(a)(va). Taxability remains controlled by the ceiling and single-stage limitation in section 15(a). The deduction can therefore be denied to the extent the wires were manufactured from steel rods rather than wire rods.

Conclusion: Yes. Wires manufactured out of steel rods are a different commercial commodity and remain taxable, subject to the restriction in section 15(a).

Final Conclusion: The assessment and appellate orders could not stand in their entirety. The matter was sent back for fresh assessment so that deduction would be granted for wires manufactured from tax-paid wire rods and denied only to the extent the wires were manufactured from rods other than wire rods.

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