Declared goods classification for rough cast iron castings upheld; departmental exclusion and notices were quashed.

Rough unmachined cast iron castings were treated as falling within "cast iron" in commercial parlance and therefore remained declared goods under the sales tax enactments, attracting the statutory single-point treatment and tax ceiling. The Court distinguished such primary castings from finished products made out of them, which could be taxed in accordance with law. A departmental circular and the consequential show cause notices were unsustainable to the extent they excluded rough unmachined cast iron castings from the declared goods category, and were quashed as inconsistent with the correct legal position.

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Issues: Whether rough unmachined cast iron castings are included within "cast iron" as declared goods under the relevant sales tax enactments, and whether the departmental circular and notices issued on that basis could be sustained.

Analysis: The controlling statutory scheme under the Central Sales Tax Act and the Tamil Nadu General Sales Tax Act treated specified iron and steel goods as declared goods, subject to a single point levy and the statutory ceiling on tax. Applying the earlier Supreme Court interpretation of the expression "cast iron" in commercial parlance, the Court distinguished between rough unmachined cast iron castings and finished products made out of such castings. It held that rough cast iron castings in their primary form remain within the description of cast iron and therefore continue to answer the statutory category of declared goods. The Court further held that the circular issued by the department merely reflected the legal position as declared by the Supreme Court, but the impugned revision of classification, insofar as it excluded rough unmachined cast iron castings from declared goods, was inconsistent with the correct legal position.

Conclusion: The circular and consequential show cause notices were quashed, and rough unmachined cast iron castings were held to continue as declared goods; however, products made out of such castings could be taxed in accordance with law.

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