TaxTMI 
TaxTMI 
1994 (3) TMI 108
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.... the parent object, which in most cases serves as a raw material for the end-product. This aspect of the matter assumes importance when a law taxes sale of goods. To find out whether a particular goods is exigible to sales tax or not despite the raw material used in the production having been taxed earlier, the test evolved is whether a new commercial commodity has come into existence. 3.As to when it can be said as aforesaid has been a subject matter of catena of decisions. We do not propose either to catalogue them or even examine some of them to find out as to why in one case it was held that a new commercial commodity had not come into existence and in another a different view was taken. It would be enough if we note some of the leading decisions. These are (1) Tungabhadra Industries Ltd. v. Commercial Tax Officer, 11 STC 827 wherein hydrogenated groundnut oil (commonly called Vanaspati) was not held to be a different product from groundnut oil (2) Hindustan Aluminium Corporation Ltd. v. State of Uttar Pradesh, 1982 (1) SCR 129, where rolled products and extrusions were regarded as different commercial commodity from aluminium ingots and billets (3) Deputy Commissioner of S....
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.... labour is manual or mechanical, whether the duration is short or long, whether the production requires expertise or not would no doubt be relevant but would not alone be decisive." 5.The above adequately shows how a valiant effort was made to read a common thread running through different judgments noted in the decision. A Bench of this Court as well had gone through this exercise recently in Rajasthan Roller Flour Mills Assn. v. State of Rajasthan, JT 1993 (5) SC 138 (hereinafter the Rajasthan case) in which one of us (Jeevan Reddy, J.) delivering judgment for a two-Judge Bench noted some leading decisions on this aspect of the matter and held that flour, maida and suji are different commercial commodities from wheat. 6.The above shows complexity of the concept of a different commercial product coming into existence because of manufacturing process undertaken. It is because of this that we do not propose to decide the controversy at hand, which is whether iron wires are separate commercial goods from wire rods from which they are produced by trying to answer whether they are one commercial commodity or separate. The point has however arisen for consideration because we are conc....
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....* iron and steel, that is to say, -(iv) ***** Wire rods and wires - rolled, drawn, galvanised,(xv) aluminised, tinned or coated such as by copper; ***** 10.In Pyarelal's case the contention on behalf of the assessee was that steel rounds, flats, plates etc. were not different commercial commodities because they were products of iron and steel, and so, were not taxable once again, as all the products of iron and steel mentioned in various sub-items of clause (iv) have to be taken as one commodity inasmuch as the legislature visualised iron and steel as one commodity. It may be stated that at the relevant time (as also now) iron scrap was one of the sub-items; and steel plates, sheets etc. part of another sub-item, albeit in separate sub-divisions. Assessee's contention was rejected by this Court by stating that it was not the substance (i.e. iron and steel) which should be taken as an object of taxation, but goods of iron and steel as otherwise ... sales tax law itself would undergo a change for bringing a law which taxes the sale of "goods" to a law which taxes sale of "substance" out of which goods are made. The Court also pointed out that steel plates, sheets etc. formed par....
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....to be taken to have accepted that goods of one sub-item should be taken as one taxable commodity. Rajasthan case does not lay down any different proposition. 15.Despite the aforesaid being the position, Shri Chari contends that wires being known as a different commercial commodity from rods, as were flour, maida and suji accepted as different from wheat in Rajasthan case, wires would be exigible to tax on the ratio of that case. The position here being different, as both rods and wires form part of one sub-item, Rajasthan case cannot assist the Revenue. In view of rather persistent submission made by Shri Chari on this point, we have applied our mind afresh as to whether despite rods and wires having been mentioned together in sub-item (sub-clause) (xv) they have to be taken different commercial commodities for the purpose of imposition of sales tax. Had it been that the sub-item stooped after the word "wires", we would have perhaps examined the submission of Shri Chari further, but the sub-item being what it is, we state that wires were thought of as integral part of rods and not distinct from rods, because the sub-item speaks about wires "rolled, drawn, galvanised, aluminised, t....