The Stat.,Govt Of Ap.,Hyd vs. M/S.Veerabhadra Iron Fouundry,Nidadavolu

ORDER TRC.No.56 of 2003 DISMISSING THE TRC S ’ 6 SEP 2023

-•'s- T.R.C.No.Sof 1999 H- The assessee preferred the appeal to the Tribunal against the order of the Deputy Commissioner (Commercial Taxes), Vijayawada, dated 14.12.1993 revising the Assessment order dated 16.11.1989 passed by the Commercial Tax Officer, Autonagar, Vijayawada. In allowing the assessee’s appeal, the Tribunal held that the disputed turnover is eligible for exemption in view of provisions under G.O.Ms.No.383, Revenue, dated 17.04.1985 and judgments of the Supreme Court referred in its order. This revision under Section 22(1) of the General Sales Tax Act, 1957 (for short ‘the 1957 Act’) is presented to consider the following “question of law" framed by the revision petitioner; "Whether the order of the STAT is legal and valid?" This revision is preferred against the order of the Sales Tax Appellate Tribunal, Hyderabad, dated 18.12.1995 in T.A.No.247/94. The Tribunal had allowed the appeal of the respondent-assessee. THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE M.S.RAMACHANDRA RAO JUDGMENT (Per Sri GR,J): Heard Sri P.Balaji Varma, learned Special Government Pleader for Commercial Taxes for the State-petitioner. The relevant facts, in brief may be noticed. The assessee is a dealer on the rolls of. the Commercial Tax Officer, Autonagar, Vijayawada in the business of ‘Cylinder Liners‘ of diesel engine and tractor engine spares. For the Assessment Year 1985-86; the assessee filed a return reporting gross and net turnovers of Rs.11,40,343/- and Rs.11,32,023/- and claimed exemption on a turnover of Rs.8,319/- only. On a scrutiny of the account books of the r in this revision by the State. assessee, however the gross turnover was found to be Rs.54,11,310/- . The dealer however claimed exemption inter alia of Rs.12,43,148/- on the sales of 'rough castings’, on the basis of the orders in G.O.Ms.No.383 on the ground that ‘rough castings’ were produced in their own foundry out of the raw materials like cast iron, pig iron, ferro phosphorous etc.. By the order of Assessment dated 16.11.1989, the Assessing Autiiority disallowed the claim of exemption to the extent of turnover of Rs.8,43,202/- but allowed exemption on the turnover of Rs.8,42,946/-, following the orders in G.O.Ms.No.383. In Vasantan Foundry, the question whether “cast iron", which is declared goods under Section 14 of the GST Act, 1956 (for short 'the GST Act’) covers rough, unmachined cast iron castings but not furnished product made therefrom, fell for consideration. The Supreme Gourt observed that “casting” is a process of producing a metal object The Tribunal relied on the decision of the Supreme Gourt in Telangana Steel Industries and others v. State of A.r^; Union of 121 India v. Delhi Cloth and General Mills ', Vasantan Foundry v. 131 Union of India and others to hold that “rough castings” are not a different commodity from “cast iron”, enumerated in Entry 2 of the III Schedule of the Act and since “cast iron” had already suffered tax, no further tax could be levied. This conclusion of the Tribunal is assailed The Revisional Authority by the order dated 14.12.1993 overruled the objections lodged by the assessee and brought the turnover of Rs.8,99,946/- (exempted by the Assessing Officer) to tax at 4% under Entry 2 of the III Schedule to the Act. Aggrieved, the petitioner preferred an appeal before the Tribunal.

J of a desired shape by pouring molten metal into a mold and allowing the metal to cool and solidify; the molten metal produced in a foundry cannot be described as "cast iron” in particular having regard to the purpose behind Sections 14 and 15 of the CST Act; and that “cast iron” cannot be construed to mean anything but the solidified material which is brought and sold in inter-State trade or commerce. The Supreme Court obsenzed that the shape and size of .the solidified material is quite irrelevant for the purpose of Section 14 of the CST Act; that if molten metal is poured into a mould, what comes out may be regarded as a casting and even so such iron casting in its solid form must be treated as “cast iron”. The Supreme Court held that the test is whether the goods in question that are being brought and sold in commercial parlance are considered as “cast iron” or as different goods such as man-hole covers, pipes, motor parts etc. The Apex Court further went on to hold that ‘cast iron casting” in its basic or rough form must be held to be “cast iron", but if thereafter any machining or polishing or any other process is done to the rough cast iron casting to produce things like pipes, man-hole covers or bends, these cannot be regarded as “cast iron casting” in its primary or rough form, but products made out of cast iron castings; and such products cannot be regarded as “cast iron”. The Supreme Court clarified that this view (Vasantan Foundry)\s not in conflict with the view taken m Bengal Iron Corporation v. Commercial Tax Office/^. I n Telangana Steel Industries, the Supreme Court held that wire rods purchased by the assessee had suffered sales tax in Andhra Pradesh and therefore tax could not again be realized on sales in that State for iron wires produced from wire rods. This conclusion was recorded in Telangana Steel Industries on interpretation of provisions of Entry 2, clause (iv) and (xv) of the III Schedule of the Act. The Supreme Court held in this case that the two goods, namely wire rods and wires drawn there from have been clubbed together in clause (xv)

of Entry 2 of the III Schedule of the Act. The issue before us is whether in view of the observations in wherein it was held that tanning of raw hides and skins was a manufacturing process as a result of which the product that emerges is different from the raw material; as after tanning the hides and skins become a different commodity and therefore the process of tanning brings about change in the raw hides and skins, rendering these different commodities. Anwardistinguishing the judgment in Telangana Steel Industries, it could be presumed that the later decision was overruled. This issue In K.A.K. Anwar & Co., v. State of Tamil Nadi/^ the question before the Supreme Court was whether dressed hides and skins were different commodities in the context of Section 14 of the GST Act or was considered in Hyderabad Wire & Allied Products v. C.C.T^. This Court held that the Revenue Authorities could not ignore the law 1 laid down by the Supreme Court in Telangana Steel Industries, which was not specifically overruled by the Supreme Court in Anwar and to do so would amount to negation of the Constitutional mandate under Article 141. This Court observed that the judgment in Telangana Steel Industries direcliy dealing with the entries in question cannot be disregarded by the Revenue on the basis of another judgment of the Supreme Court dealing with different entry while treating the judgment in Telangana Steel Industries as having been overruled in Anwar, when clearly it was not so overruled. should treated as a single commodity for the purpose of taxation under that Act. In Anwar, after referring to the decision in Telangana Steel Industries, the Court distinguished the same and held that dressed hides and skins are different commodities. For this conclusion, the Supreme Court relied on the Constitution Bench judgment in Hajee KI Abdul Shukoor and Co. v. State of Madras

costs. JUSTICE GODA RAGHURAM JUSTICE M.S.RAMACHANDRA RAO L In the light of the ratio flowing from the decision of the Supreme Court in Vasantan Foundry, explaining the distinction from finished product, out of rough castings, which was held to be a different commodity while rough castings are the same as “cast iron”, in our considered view no question of law falls for determination in this revision. It further requires to be noticed that no question of law is also framed by the Revenue in this revision. Date: 20.09.2012 kk/va For the aforesaid reasons, there are no merits in this revision, which is accordingly dismissed, but in the circumstances without In the case on hand, the commodity in question which was considered for exemption by the Assessing Officer was “iron rough castings” derived from “cast iron” which had already and undisputedly suffered tax and was therefore eligible for exemption, unless “iron rough castings” are a different commodity from “cast iron” and therefore liable to be taxed separately under any other, entry or substantive provision of the Act. The Tribunal concurred with the Assessing Officer in holding . that “iron rough castings” are derived from “cast iron” and do not constitute a different commodity and are therefore eligible for exemption insofar as the sales turnover pertains to the same commodity on which tax was already levied as “cast iron”.