Declared goods classification for steel rings turns on their character as sold, not their end use or processing

Steel rings sold in circular form were held to fall within entry 4(viii) of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959, which reproduces the declared goods category in section 14 of the Central Sales Tax Act. Their essential character was not altered by the fact that the ends were not joined, or by polishing and grinding, and the buyer's use as piston rings or oil-engine rings was irrelevant. Classification had to be made on the basis of the goods as sold, not on ultimate end use. The higher rate applicable to automobile components was therefore inapplicable.

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Issues: Whether steel rings manufactured and sold by the assessee fell within entry 4 of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959 as declared goods, or were liable to be treated as automobile components taxable at the higher rate.

Analysis: Entry 4(viii) of the Second Schedule reproduces section 14(iv)(viii) of the Central Sales Tax Act, 1956, which specifically includes discs, rings, forgings and steel castings as declared goods. The samples produced showed that the goods were steel rings in circular form, and the mere fact that the ends were not joined did not alter their basic character. The Court held that polishing, grinding, or the buyer's use of the rings as piston rings or oil-engine rings did not change the essential identity of the commodity. Classification had to be made on the basis of the goods as sold, and not on their ultimate end use. The authorities were therefore wrong in applying a higher rate on the footing that the goods were automobile components.

Conclusion: The goods manufactured by the assessee fell within entry 4 of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959 and were exigible only at the rate applicable to declared goods.

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