1996 (6) TMI 335 - HC - VAT and Sales Tax

High Court affirms Tribunal decision on classification of stampings/laminations as general goods taxable at 4%

State of AP Versus Sahney Steel & Press Works Ltd.

State of AP Versus Sahney Steel & Press Works Ltd. - [1997] 104 STC 41 (AP) Issues:Classification of goods - 'stampings' and 'laminations' under the Andhra Pradesh General Sales Tax Act, 1957.Detailed Analysis:The judgment of the High Court of Andhra Pradesh dealt with the issue of classification of goods under the Andhra Pradesh General Sales Tax Act, 1957. The revision was filed by the State under section 22 of the Act, questioning whether 'stampings' and 'laminations' should be considered as electrical goods falling under a specific entry of the Act or classified as general goods taxable under a different section. The lower authorities had treated the goods as electrical goods and levied tax at 8%, but the Sales Tax Appellate Tribunal allowed the appeal of the assessee, categorizing the goods as general goods taxable at 4%. The Tribunal's findings highlighted that 'stampings' and 'laminations' were raw materials used in electrical motors and transformers, undergoing further processes before being used, and were not simply replaceable parts of finished goods like fans or transformers.The Tribunal emphasized that the properties and characteristics of 'stampings' and 'laminations' were distinct from the finished electrical goods listed in the Act, and they were not interchangeable parts but raw materials requiring additional processing. The Indian Manufacturers Association also classified these goods as raw materials, supporting the Tribunal's conclusion. The High Court analyzed the relevant clauses of the Act, specifically item 38, which covered various electrical goods, instruments, and appliances. After considering the Tribunal's findings, the Court determined that 'stampings' and 'laminations' did not fall under the specified categories in item 38, indicating that they should be classified as general goods taxable at a lower rate under section 5 of the Act.Based on the above analysis, the High Court upheld the Tribunal's decision, dismissing the State's revision and confirming the classification of 'stampings' and 'laminations' as general goods taxable at 4%. The judgment emphasized the distinct nature of these goods as raw materials rather than finished electrical products, aligning with the Tribunal's assessment and the provisions of the Andhra Pradesh General Sales Tax Act, 1957.