2009 (10) TMI 845

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....gaged in the manufacture and sale of iron and steel rods (sariya). During the assessment year under consideration, the assessee has purchased goods from the units which were enjoying the tax benefit under section 4A of the U.P. Trade Tax Act, without paying any tax. The A. O. levied the tax at four per cent. The revisionist-assessee claimed that only two per cent tax will have to be charged from the assessee as in other cases only at two per cent tax was charged. Not only the first appellate authority but also the Tribunal uphold the order passed by the A. O. Not being satisfied, the assessee is before this court. With this background, counsel for the revisionist submits that the assessee has purchased the raw material from the industrie....

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....uments, learned counsel for the Department stated that this issue was already discussed in the case of State of Tamil Nadu v. Pyare Lal Malhotra [1976] 37 STC 319 (SC) where it was observed that (at page 319): "Entry No. (iv) in section 14 of the Central Sales Tax Act, 1956, as originally worded (prior to its amendment by Amendment Act No. 61 of 1972) was meant to enumerate separately taxable goods and not just to illustrate what was just one taxable substance, viz., 'iron and steel'. Each sub-item in entry No. (iv) is a separate taxable commodity for purpose of sales tax and each of them forms a separate species for each series of sales although they may all belong to the genus, 'iron and steel'. Therefore, manufactured ....

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.... units which were exempted under section 4A of the Act from paying any tax. From the ingot, sariya was manufactured. Hence, the point of taxability on manufacture of sariya has been exhausted/started at the very first point. When the new unit sold ingots to the assessee then the process of manufacturing sariya starts from the point of taxability. From the record, it also appears that other manufacturers have purchased the raw material from the units which were not exempted under section 4A and paid the tax at two per cent on the raw material, i.e., ingots. Thus, two per cent tax was already paid on the raw material which is part of the finished goods. So, the A. O. has rightly charged the remaining two per cent tax on the finished goo....