Review notice on sales tax deduction invalid where wire rods and wires were treated as the same commodity.

A notice proposing review of an appellate sales tax order was held invalid because the deduction for sales of wires had been allowed on the settled footing that wire rods and wires were the same commodity for the relevant entry and that tax had already been borne at the purchase stage. The review attempt sought to reopen that allowance by re-characterising the goods and taxing turnover earlier exempted, but the deduction issue had not been decided in appeal and that part of the assessment had not merged in the appellate order. The proposed review also ignored binding Supreme Court authority on wire rods and wires, making it contrary to settled law and liable to be quashed.

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Issues: Whether the notice proposing review of the appellate order under rule 79 was valid in law, and whether the appellate order could be reopened on the footing that wire rods and wires were different commodities so as to deny the deduction earlier allowed.

Analysis: The deduction claimed on sales of wires had been allowed on the basis of the settled view that wire rods and wires were treated as the same commodity for the relevant sales tax entry and that the goods had already suffered tax at the purchase stage. The proposed review sought to disturb that allowance by re-characterising the goods and by levying tax on the very turnover that had been exempted. The earlier appellate order had not dealt with the exemption issue at all, and the part of the assessment allowing deduction had not been carried in appeal. In such circumstances, that part of the assessment could not be treated as having merged in the appellate order. The notice also ignored the binding effect of the Supreme Court decision governing wires and wire rods under the relevant entry, and the proposed review was therefore contrary to settled law.

Conclusion: The notice proposing review was invalid and liable to be quashed. The challenge succeeded in favour of the petitioner.

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