TaxTMI 
TaxTMI 
1993 (4) TMI 277
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....eclared goods liable to tax at the rate of 4 per cent only. The assessee's appeal preferred before the Appellate Deputy Commissioner is still pending. Evidently because no stay was granted pending the said appeal, a notice was issued to the appellant calling upon him to pay the tax assessed, against which notice he preferred a writ petition, being W.P. No. 9315 of 1992, in the High Court of Andhra Pradesh. His main contention in the writ petition was that by virtue of G.O. Ms. No. 383 Revenue(S) Department dated April 17, 1985, his products are "declared goods" and are, therefore, liable to tax only at 4 per cent. The Division Bench of the High Court dismissed the writ petition following its earlier decision in Deccan Engineers v. State of Andhra Pradesh reported in [1992] 84 STC 92. In Deccan Engineers [1992] 84 STC 92, it was held by the A.P. High Court that the expression "cast iron" in item 2(i) of the Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957, does not include cast iron pipes, man-hole covers and bends, etc. In this appeal, the correctness of the said view is questioned. The Third Schedule to the Andhra Pradesh General Sales Tax Act pertains to "de....
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....such as by copper; (xvi) detectives, rejects, cuttings or end pieces of any of the above categories. -------------------------------------------------------------------------- Item 2 of the Third Schedule to the A.P. Act is an exact replica of item (iv) of section 14 of the Central Sales Tax Act. According to section 15 of the Central Act, "declared goods" cannot be taxed at a rate exceeding 4 per cent or at more than one stage. The precise question that was considered in Deccan Engineers [1992] 84 STC 92 (AP) (followed in the judgment under appeal) was whether the "cast iron castings" manufactured by the petitioner in that case are "cast iron" within the meaning of item 2(i) of the Third Schedule to the A.P. Act/item (iv)(i) of section 14 of the CST Act. At this stage, it is necessary to ascertain precisely what does "cast iron " mean and how are the products of the appellant manufactured. "Cast iron" is defined in the Concise Oxford Dictionary as "a hard alloy of iron, carbon and silicon cast in a mould". According to New Lexicon Webster's Dictionary of English Language, the word "cast iron" means "an iron-carbon alloy produced in a blast furna....
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....ike man-hole covers, bends, cast iron pipes, etc. In other words "cast iron" used in item (iv) of section 14 of the Central Act is the material out of which the petitioner's products are manufactured. Position remains the same, even if the appellant purchases iron and mixes it with carbon and silicon thereby deriving "cast iron" and then pours it into different moulds. In sum, "cast iron" is different from the cast iron pipes, man-hole covers, bends, etc., manufactured and sold by the appellant. It cannot be denied, in such a situation that the products manufactured by the appellant are, in commercial parlance, different and distinct goods from the cast iron. Indeed this aspect is not seriously disputed by Shri Ganguli, the learned counsel for the appellant. His case is entirely based upon certain clarifications and circulars issued both by the Central and State Governments and in particular upon an order issued by the Andhra Pradesh Government under section 42(2) of the A.P. Act, namely, viz., G.O. Ms. No. 383 dated April 17, 1985. It is, therefore, necessary to refer to them. The earliest clarification is the one contained in the letter dated February 28, 1977, from the Depa....
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....Technical Development. It set out the opinion of the Ministry of Law as also the opinion of the Director-General of Technical Development. The latter's opinion reads: "Cast iron is an alloy iron of carbon, silicon and other alloying elements if required, i.e., cast iron castings are covered under the term 'cast iron'. It may also be clarified that 'cast iron' include gray iron, chilled malleable and nodular iron. Ingot moulds and bottom plates are nothing but cast iron castings." After setting out the said two opinions, the Government of India expressed its opinion in the following words: "In accordance with the above advice, cast iron castings are covered under the term 'cast iron'..........State Government may kindly bring this position to the notice of sales tax authorities of the State. If considered necessary this may be placed before the Committee of Commissioners of Sales Tax/Commercial Tax set up under this Ministry's letter No ........... Receipt of this lettet may please be acknowledged." Copies of this letter were communicated to all the State Governments and Administrations of Union Territories. On July 20, 1984, the Government of An....
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....ies Association, Vijayawada, requested the Government to clarify whether 'cast iron' and 'cast iron castings' are one and the same commercial commodity. 2.. This matter was examined at length by the Government of India in consultation with the Ministry of Law (Department of Legal Affairs) and Director- General of Technical Development. The Ministry of Finance, Department of Revenue, Government of India, clarified in their letter F. No. 24/10/80-CT dated January 31, 1984 to the effect that 'cast iron castings' are covered within the term 'cast iron'. 3.. Government have examined in detail the legal aspects of the issue and observe that the term 'cast iron including ingot moulds, bottom plates' as in sub- item (i) of item 2 in the Third Schedule to the Andhra Pradesh General Sales Tax Act, covers 'cast iron castings' and as such 'cast iron casting' is not a different commercial commodity from the commodity 'cast iron including ingot, moulds, bottom plates'. 4.. Under sub-section (2) of section 42 of the Andhra Pradesh General Sales Tax Act, 1957' the Government hereby clarify that the 'cast iron castings' ....
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....he Government issued thereunder was final. Inasmuch as the said words are not there in section 34 of the Contract Labour (Regulation and Abolition) Act, 1970, it was held, section 34 cannot be said to suffer from the vice of excessive delegation of legislative power. It is meant "for giving effect to the provisions of the Act," it was held. Sub-section (2) of section 42 of the A.P. Act does no doubt not contain the aforesaid offending words, and cannot therefore be characterised as invalid. Yet, it must be remembered that the said power can be exercised "for giving effect to the provisions of the Act", and not in derogation thereof. As we shall presently indicate it is necessary to bear this limitation in mind while examining the effect of G.O. Ms. No. 383. So far as Clarifications/Circulars issued by the Central Government and/ or State Government are concerned, they represent merely their understanding of the statutory provisions. They are not binding upon the courts. It is true that those clarifications and circulars were communicated to the concerned dealers but even so nothing prevents the State from recovering the tax, if in truth such tax was leviable according to law. Ther....