Declared-goods entry for tools includes finished hand tools; additional ground on tax liability was properly allowed in second appeal.

The expression "tool" in Entry 6(ix) of Schedule B to the Bombay Sales Tax Act, 1959 was read as an independent item, not as part of the composite phrases "tool steel", "alloy steel" or "special steel"; on that construction, finished hand tools such as open jaw spanners fall within the declared-goods entry and attract tax at the declared-goods rate of 4 per cent rather than the residuary entry. The court also treated a coordinate Bench ruling on the same point as binding, absent any showing that it was per incuriam. On procedure, the Tribunal was justified in allowing an additional ground in second appeal challenging tax liability, because the taxability issue went to the root of the matter and had been fully argued without demonstrated prejudice.

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Issues: (i) Whether the expression "tool" in Entry 6(ix) of Schedule B appended to the Bombay Sales Tax Act, 1959 and the corresponding entry in the Central Sales Tax Act, 1956 covers finished hand tools such as open jaw spanners so as to attract tax at the declared-goods rate of 4 per cent rather than the residuary entry. (ii) Whether the assessee could be permitted to raise an additional ground in second appeal challenging the tax liability when the first appeal was confined to penalty and interest.

Issue (i): Whether the expression "tool" in Entry 6(ix) of Schedule B appended to the Bombay Sales Tax Act, 1959 and the corresponding entry in the Central Sales Tax Act, 1956 covers finished hand tools such as open jaw spanners so as to attract tax at the declared-goods rate of 4 per cent rather than the residuary entry.

Analysis: The entry under the iron and steel declaration was read as using "tool" independently, and not as a composite phrase limited to "tool steel", "alloy steel" or "special steel". The punctuation and structure of the entry supported a separate meaning for "tool". A prior coordinate-Bench decision had already taken the same view, and no basis was shown to treat it as per incuriam. The judgment also accepted the reasoning that commercial tools made of iron or steel do not cease to be tools merely because they are finished products.

Conclusion: The issue was decided in favour of the assessee. Open jaw spanners and similar hand tools fall within the declared-goods entry and are taxable at 4 per cent.

Issue (ii): Whether the assessee could be permitted to raise an additional ground in second appeal challenging the tax liability when the first appeal was confined to penalty and interest.

Analysis: The Tribunal had allowed the additional ground because the assessment and penalty orders were composite in some of the matters, and the taxability question went to the root of the dispute. The court found no legal perversity or prejudice in allowing the ground to be raised, particularly where the issue had been fully argued and related to the same assessee and connected periods.

Conclusion: The issue was decided in favour of the assessee. The Tribunal was justified in permitting the additional ground.

Final Conclusion: The reference was answered against the Revenue, and the Tribunal's view in favour of the assessee was sustained.

Ratio Decidendi: Where a taxing entry expressly uses the word "tool" as an independent item in the declared-goods schedule, finished tools made of iron or steel are covered by that entry, and a coordinate Bench decision on the same point binds unless shown to be per incuriam.

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