Commercial Taxes Officer Vs. Abdul HussaIn Sakhlarjee and anr. - Court Judgment

A.P. Sen, Actg. C.J.

1. This is an application under Section 15(3A) of the Rajasthan Sales Tax Act, 1954, filed by the Commercial Taxes Officer Circle 'A', Udaipur for requiring the Board of Revenue for Rajasthan, to state a case and refer to the Court a certain question of law said to arise from its order, for its opinion.

2. M/s Abdul Hussain Sakhlarjee, Udaipur hereinafter referred to as 'the assessee'; is engaged in dealing with hardware goods, pipe-fittings, sanitary fittings, cement under on, etc. During the accounting year 1964-65, the assessee effected sales of galvanised corrugated sheets to the time of Rs. 1,72,593.08 paisa. The assessee claimed that the goods were chargeable to tax @ 2% under entry No. 23 of notification dated 2nd March, 1963. The contention of the revenue, on the other hand, was that galvanised corrugated sheets were not covered under entry No. 23 and were therefore chargeable @ 6% under entry No. 65, i.e. the residuary item. The Commercial Taxes Officer held that the sale of these goods was not covered by entry No. 23 and therefore brought them to tax at the general rate of 6%. On appeal, the Deputy Commissioner (Appeals), Udaipur upheld the order. In revision the Board of Revenue, however, accepted the contention of the assessee, and held that galvanised corrugated sheets are nothing but 'iron and steel', and fall within the definition of the iron sheets for galvanisation and corrugation, of the iron sheets do not change the basic structure of iron sheets from which die galvanised sheets are manufactured.

3. The question as to whether galvanised corrugated sheets are or are not iron and steel within the meaning of entry No. 23, is not free from doubt. The entry reads as follows:

23. Iron and steel that is to say:

(a) Pig iron and iron scrap;

(b) iron plates sold in the same form in which they are directly produced by the rolling mill;

(c) Steel scrap, steel ingots, steel billers, steel bars and rods;(d) (i) Steel plates. ) Sold in the same form in(ii) Steel sheets, ) which they are directly(iii) Sheet bars and ) produced by the rollingtin bars, ) mill.(iv) Rolled Steel )sections, )(v) Tool alloy steel; )

4. At the very out-set, we must observe that the view of the Board of Revenue finds support from the decisions of the Gujarat and Andhra Pradesh High Courts in State of Gujarat v. Shah Veljibhai Motichand, Lunawada (1969) 23 Sales Tax Cases 288 and The State of Andhra Pradesh v. Sri Durga Hardware Stores, Vijayawada, and Anr. (1973) 33 Sales Tax Cases 322.

5. We may here point out that the corresponding entry of declared goods of special importance in inter-state trade or commerce in Section 14(iv) of the Central Sales Tax Act, 1956, as it stood prior to 1st April, 1971, was identically the same as entry No. 23 here. Thereafter, the Central Sales Tax Act was amended by Amendment Act No. 61 of 1972 which came into force w.e.f. 1st April, 1973. Section 14(iv) as now amended, inserts a new Clause (vi) which reads.-

(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.

This does lend support to the contention that galvanised corrugated sheets were not included within the definition of 'iron and steel' and therefore the legislature had to amend the section.

6. The question depends on the construction of entry No. 23. This does, in our opinion, give rise to a question of law.

7. The application under Section 15(3A) of the Rajasthan Sales Tax Act, 1954 is accordingly allowed. The Board of Revenue is directed to state the case and refer to the Court, the following question of law, for its opinion,-

Whether, under the facts and circumstances of the case, the Board of Revenue was justified in holding that galvanised corrugated sheets were 'iron and steel' with a the meaning of entry No. 23 of notification dated 2nd March, 1963, and were therefore chargeable at 2%?.

There shall be no order as to costs.