Fabricated steel goods fall outside raw steel entry, while resale of condemned scrap remains outside tax liability.

Fabricated centering sheets were treated as finished fabricated goods, not raw steel items, so they did not fall within Entry 4 of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959 and remained liable to multi-point taxation. By contrast, the resale of discarded, obsolete and condemned cover sheets was held to be a resale of scrap in the course of trade, and the seller's charging of tax did not alter the character of the goods or create liability on that turnover. Tax was therefore sustained only on the fabricated centering sheets and excluded on the scrap resale.

---

---

Issues: (i) Whether M.S. fabricated centering sheets were covered by Entry 4 of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959 so as to be taxable only at single point. (ii) Whether the resale of scrap cover sheets purchased from Murray & Co. was liable to tax.

Issue (i): Whether M.S. fabricated centering sheets were covered by Entry 4 of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959 so as to be taxable only at single point.

Analysis: The goods were described as fabricated centering sheets and were treated as finished fabricated products rather than raw steel goods. Entry 4 and its sub-items were understood as referring to raw steel items such as sheets, hoops, strips and skelp, and not to fabricated articles. Since no sub-item in the entry covered fabricated goods, the goods could not be brought within the single-point category.

Conclusion: The fabricated centering sheets were not covered by Entry 4 and were liable to multi-point taxation, against the assessee.

Issue (ii): Whether the resale of scrap cover sheets purchased from Murray & Co. was liable to tax.

Analysis: The auction materials and bill showed that the goods were discarded, obsolete and condemned scrap, which fell within iron and steel scrap. The assessee had only resold the scrap, and the mere fact that the seller charged tax at a particular rate did not alter the character of the goods or convert the resale into a taxable multi-point sale. On the facts, the transaction was only a resale of scrap by a dealer in the chain of sale.

Conclusion: The resale of scrap was not liable to tax, in favour of the assessee.

Final Conclusion: Tax was sustained only on the turnover relating to the fabricated centering sheets, while the turnover relating to scrap resale was excluded from assessment.

Ratio Decidendi: Fabricated finished goods are not automatically covered by an entry for raw steel items, and a resale of scrap remains outside tax where the goods are shown to be second or third sale scrap in the course of trade.

---