TaxTMI 
TaxTMI 
TaxTMI 
2013 (3) TMI 575
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....turns regularly. The assessee purchases or brings certain materials from outside State for the execution of works contract. The assessee has purchased/brought iron and steel from outside the State which are treated as "goods of special importance" under section 14 of the Central Sales Tax Act. The assessee offered the same to tax at the rate of four per cent. 3. The assessing authority reassessed the tax liability in respect of the said iron and steel and levied tax at the general rate of 12.5 per cent in his reassessment order under section 39(1) of the Karnataka VAT Act dated July 31, 2008. Against the said order of reassessment, the assessee sought rectification of mistake apparent from the order, by filing a letter dated October 31, 2008. The rectification order came to be passed on December 18, 2008 maintaining the tax rate at the general rate of 12.5 per cent. Against the said order, the assessee preferred an appeal before the Joint Commissioner of Commercial Taxes (Appeals). The said appeal came to be dismissed by order dated October 13, 2009, by upholding the order of the assessing authority. Aggrieved by the said order, the assessee preferred an appeal to the Karnataka Ap....
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....y of interpretation cannot add any other item which may fall under the category of iron and steel. As in the market, steel wire rod and stranded rod are not understood to be the same commodity. Benefit of that section cannot be extended to a stranded rod, deemed to have been included in the phrase, "wire rods". The three authorities on a proper construction of the said statutory provisions and taking note of the decisions of various court on the point, have rightly held that the benefit of section 14 cannot be extended to stranded rod, which is altogether a different item when compared to iron rod. Therefore the said orders do not call for any interference. 6. In the light of the aforesaid facts and rival contentions, the point that arises for our consideration in this revision petition is as under: "Whether in common parlance, wire rods and stranded rods are one and the same or are they two different, distinct commercial commodities as understood in the market?" 7. The answer to this question depends on the interpretation to be placed on section 14 of the Central Sales Tax Act (for short, hereinafter referred as "the Act"). In the interest of National E....
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....p; (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-plates, both hot dipped and electrolytic and tin-free plates; (xiii) fish plates bars, bearing plates bars, crossing sleeper bars, fish plates, bearing plates, crossing sleepers and pressed steel sleepers, rails-heavy and light crane rails; (xiv) wheels, tyres, axles and wheels sets; (xv) wire rods and wire-rolled, drawn, galvanised, aluminised, tinned or coated such as by copper; (xvi) defectives, rejects, cuttings or end pieces of any of the above categories." 8. This provision fell for interpretation before the apex court in the case of State of Tamil Nadu v. Pyare Lal Malhotra reported in [1976] 37 STC 319 (SC) where it was held as under (page 326 in 37 STC): &n....
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....some processing or finishing or are merely joined together, they may remain commercially the goods which cannot be taxed again, in a series of sales, so long as they retain their identity as goods of particular type. When once commercial commodity is transformed into another, it becomes a separate commodity for purpose of sales tax. 10. However, it is contended by the learned counsel appearing for the assessee in the instant case, that the commodity is stranded rods, which are nothing but wire rods and they are one and the same. They are not distinct commercial commodities as understood in the market. He further submitted that in the American Heritage Dictionary the meaning of the "wire" has been given as a usually pliable metallic strand or rod made in many lengths and diameters, sometimes clad and often electrically insulated, used chiefly for structural support or to conduct electricity; a group of wire strands bundled or twisted together as a functional unit/cable; something resembling a wire, as in slenderness or stiffness. Further, he submitted that the products obtained upon hot rolling or forging of semi-finished steel (bloom/billets/slabs) are broadly categorized as long ....
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....irtue of subitem (xv) of item (iv) of section 14 and section 15 of the Act read with item 2(xv) in the interpretation of the Fourth Schedule to the State Act. He also relied on an unreported judgment of the apex court in the case of Collector of Central Excise, Indore, M.P. v. Anand Behari Steel Wires & Other Products Limited, Raipur decided on 9th January, 1989 where the Supreme Court observed as under: "Simply because a wire is stranded, in our opinion, the wire does not cease to be wire and becomes a 'goods not elsewhere specified'. It is wire but standed. It still remains wire under tariff item 26AA(1A) of the Central Excise Tariff. In view of the amplitude of the expression 'wire', 'stranded wire' or otherwise remains wire in essence. It still continues to be wire and the expression 'wire' in T. I. 26AA(1A) is not in any way circumscribed by any limitation. There was no evidence that stranded wires were known in the market as anything else than wires. It is essentially a thing that the wire is known in the market as anything else than wires. It is essentially a thing that the wire is known in the market as wire stranded....