Component parts test denied concessional sales tax for unfinished castings sold for further processing.

Unfinished rough castings sold for further machining did not qualify as component parts for concessional sales tax under section 3(3), because the amended requirement demanded an identifiable constituent of the finished product at the time of sale, visually or by mechanical process and not by chemical process. The castings acquired the character of tappets only after substantial processing by the buyer, so the concessional rate was unavailable. Revision of assessment under section 16 was also unjustified on the existing record, since the original assessment had already considered the claim and no fresh factual basis supported reopening. The revisional interference was therefore unsustainable.

---

---

Issues: (i) whether rough castings sold for further processing could be treated as component parts entitled to the concessional rate under section 3(3); (ii) whether the revision of assessment under section 16 was justified on the materials available.

Issue (i): whether rough castings sold for further processing could be treated as component parts entitled to the concessional rate under section 3(3).

Analysis: The concessional rate was available only where the goods satisfied the statutory requirement of being an identifiable constituent of the finished product. After the retrospective amendment, the component had to be identifiable visually or by mechanical process and not by chemical process. The rough castings sold by the assessee were unfinished goods which acquired the character of tappets only after substantial machining, grinding, drilling, inspection, and precision finishing by the purchaser. They were therefore not components in the form required by the amended explanation when sold by the assessee.

Conclusion: The claim for concessional treatment under section 3(3) was not available on the facts as sold, and the rough castings did not answer the statutory description of component parts at that stage.

Issue (ii): whether the revision of assessment under section 16 was justified on the materials available.

Analysis: Section 16 could be invoked where turnover had escaped assessment or had been assessed at a lower rate than assessable. Here, the original assessment had already considered the assessee's claim and the revisional action rested only on the existing governmental clarification and audit note, without any fresh factual foundation. The administrative clarifications on rough castings also indicated that only goods already finished as usable components could get the concessional rate, while rough castings undergoing substantial processing by the buyer remained liable at the higher multi-point rate. On the materials before it, the Tribunal found no independent basis for reopening the concluded assessment.

Conclusion: The revision under section 16 was not warranted on the record and could not be sustained.

Final Conclusion: The disputed turnover was not entitled to concessional treatment as component parts at the stage of sale, and the revisional interference with the concluded assessment lacked sufficient basis.

Ratio Decidendi: A good sold as an unfinished casting that acquires the character of a component only after substantial processing by the buyer cannot be treated as a component part for concessional sales tax, and revisional assessment requires a legally sustainable basis on the existing record.

---