TaxTMI 
TaxTMI 
1976 (1) TMI 151
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....spect of certain iron and steel goods for the assessment year 1965-66 in Writ Petition No. 437 of 1967 and for the assessment year 1966-67 in Writ Petition No. 520 of 1968. The High Court of Madras had certified the cases as fit for appeal to this Court under articles 132 and 133(1)(a) and (c) of the Constitution. Although, the writ petitions had been dismissed on the ground that they involve an investigation into the question of fact whether the iron and steel scrap, out of which the manufactured goods sought to be subjected to sales tax, had been made, were already taxed or not, yet, the State of Tamil Nadu was aggrieved by the decision of the Madras High Court, holding that the manufactured goods, said to consist of "steel rounds, flats, angles, plates, bars" or similar goods in other forms and shapes, could not be taxed again if the material out of which they were made had already been subjected to sales tax once as iron and steel scrap as both were "iron and steel". It was possible to leave the assessing authorities free to decide all the questions which they had jurisdiction to consider. But, it appears that the Madras High Court thought it proper to decide the quest....
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....rafted. It now reads as follows: "(iv) iron and steel, that is to say,- (i) pig iron and cast iron including ingot moulds, bottom plates, iron scrap, cast iron scrap, runner scrap and iron skull scrap; (ii) steel semis (ingots, slabs, blooms and billets of all qualities, shapes and sizes); (iii) skelp bars, tin bars, sheet bars, hoe-bars and sleeper bars (iv) steel bars (rounds, rods, squares, flats, octagons and hexagons, plain and ribbed or twisted, in coil form as well as straight lenghts); (v) steel structurals (angles, joists, channels, tees, sheet piling sections, Z sections or any other rolled sections); (vi) sheets, hoops, strips and skelp, both black and galvanised, hot and cold rolled, plain and corrugated, in all qualities, in straight lengths and in coil form, as rolled and in rivetted condition; (vii) plates both plain and chequered in all qualities (viii) discs, rings, forgings and steel castings; (ix) tool, alloy and special steels of any of the above categories (x) steel melting scrap in all forms including steel skull, turnings and borings; (xi) steel tubes, both welded and seamless, of all diameters and lengths, including tube fittings; (xii) tin-plat....
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....riginal intention, because subsequent history of legislation is not irrelevant, yet, we think that, even if we confine our attention to section 14, as it originally stood at the relevant time, with which we are concerned in the cases before us, the object was not to lay down that all the categories or sub-items of goods, as specified separately ever before the amendment of 1972, were to be viewed as a single salable commodity called "iron and steel" for purposes of determining a starting point for a series of sales. On the other hand, the note against the brackets in front of the five smaller sub-divisions of (d) makes it clear that even each sub-category of a sub-item retains its identity as a commercially separate item for purposes of sales tax so long as it retains the sub-division. The more natural and normal meaning of such a mode of listing special or declared kinds of goods seems to us to be that the object of specification was to enumerate only those categories of items, each of which was to serve as a new starting point for a series of sales, which were to be classed as "declared" goods. If one were to state the meaning in different words, it would seem to us to be: "iron....
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....would constitute a separate class for a series of sales. Otherwise, the listing itself loses all meaning and would be without any purpose behind it. Learned counsel appearing for an intervener argued that the chemical composition of iron and steel a clue to the meaning of "iron and steel" as used in section 14 of the Central Act. We are unable to agree that this could be what Parliament or any legislature would be thinking of when enumerating items to be taxed as commercial goods. The ordinary meaning to be assigned to a taxable item in a list of specified items is that each item so specified is considered as a separately taxable item for purposes of single point taxation in a series of sales unless the contrary is shown. Some confusion has arisen because the separate items are all listed under one heading: "iron and steel". In the object was to make iron and steel taxable as a substance, the entry could have been: "Goods of iron and steel". Perhaps even this would not have been clear enough. The entry, to clearly have that meaning, would have to be: "Iron and steel irrespective of change of form or shape or character of goods made out of them". This is the very unusual meaning w....
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....ny metal other than gold or silver". In other words, the question was whether exemption was given to the substance out of which goods were made. In that context, it had become necessary to examine whether the exemption from sales tax was meant for all goods made out of a particular substance, or for goods as separate commercial commodities. This court held that the raw material from which the goods were made was decisive for the purposes of the exemption given. This court said: "A comparison of the said two notifications brings out the distinction between raw materials of iron and steel and the goods prepared from iron and steel: while the former is exempted from tax, the latter is taxed. Therefore, iron and steel used as raw material for manufacturing other goods are exempted from taxation. So long as iron and steel continue to be raw materials, they enjoy the exemption. Scrap iron purchased by the respondent was merely re-rolled into bars, flats and plates. They were processed for convenience of sale. The raw materials were only re-rolled to give them attractive and acceptable forms. They did not in the process lose their character as iron and steel. The dealer sold 'iron and st....
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....ocess, which has altered the identity of the commercial commodity, has taken place. The law of sales tax is also concerned with "goods" of various descriptions. It, therefore, becomes necessary to determine when they ceased to be goods of one taxable description and become those of a commercially different category and description. It appears to us that the position has been simplified by the amendment of the law, as indicated above, so that each of the categories falling under "iron and steel" constitutes a new species of commercial commodity more clearly now. It follows that when one commercial commodity is transformed into another, it becomes a separate commodity for purposes of sales tax. We think that the Madras High Court had committed an error in applying Hiralal's case [1966] 17 S.T.C. 313 (S.C.)., to the decision of cases now before us, which turns really on a correct interpretation of section 14 of the Central Act. On the question now before us, we approve of the reasoning adopted by a Division Bench of the Punjab High Court in Deygun Iron & Steel Rolling Mills v. State of Punjab [1961] 12 S.T.C. 590. Section 15 of the Central Act places certain restrictions and conditi....