BENGAL IRON CORPORATION vs. COMMERCIAL TAX OFFICER

C.A. No.-004474-004474 - 1992Supreme Court27 April 1993Bench: JEEVAN REDDY B.P. (J)9 pages
AI SummaryDismissed

What were the facts?

The appellant, Bengal Iron Corporation, manufactures and sells cast-iron pipes, manhole covers, and bends. For assessment year 1989-90, the Commercial Tax Officer treated these products as general goods and levied sales tax, rejecting the appellant's claim that they were declared goods taxable at 4%. The appellant's appeal before the Appellate Deputy Commissioner was pending without a stay. Consequently, the appellant filed a writ petition in the High Court of Andhra Pradesh, arguing that G.O.Ms. No. 383 dated April 17, 1985, classified their products as declared goods. The High Court dismissed the writ petition, following its prior ruling in Deccan Engineers v. State of A.P., which held that 'cast iron' in the Third Schedule of the Andhra Pradesh General Sales Tax Act did not encompass cast-iron pipes, manhole covers, and bends.

What did the Supreme Court hold?

The Supreme Court held that the cast-iron pipes, manhole covers, and bends manufactured by the appellant do not fall within the expression 'cast iron' as defined in Item (2)(i) of the Third Schedule to the Andhra Pradesh General Sales Tax Act, nor within Section 14(iv)(i) of the Central Sales Tax Act. The Court reasoned that the appellant's products are distinct commercial commodities made from cast iron, rather than being 'cast iron' itself. The Court found that G.O.Ms. No. 383, while statutory, could not be used to alter the provisions of the Act or dispense with a levy. The power under Section 42(2) of the A.P. Act is for giving effect to the Act, not for creating exemptions, which requires the exercise of power under Section 9. The Court noted that G.O.Ms. No. 383 was not published in the Andhra Pradesh Gazette as required for exemption notifications. The Court dismissed the appeal, finding the reasoning in Deccan Engineers to be correct and distinguishing the Pratap Steel case. The writ petition was also dismissed for similar reasons. The Court did not express an opinion on whether the word 'including' in the entry made it exhaustive.

What were the issues?

1. Whether the cast-iron pipes, manhole covers, and bends manufactured and sold by the appellant are 'cast iron' within the meaning of Item (2)(i) of the Third Schedule to the Andhra Pradesh General Sales Tax Act, and consequently, 'declared goods' under Section 14(iv)(i) of the Central Sales Tax Act, thereby attracting a single-point tax at 4%? (Question of law and mixed fact and law, turning on the interpretation of 'cast iron' and the scope of the inclusive definition in the relevant schedules). Assessee's Contentions: The appellant argued that their products, manufactured from cast iron, should be considered declared goods. They relied on G.O.Ms. No. 383 dated April 17, 1985, which they believed classified their products as declared goods. They also pointed to a prior decision in Tax Revision Case No. 93 of 1990 (State of A. P. v. Pratap Steel) where a similar government order was applied to grant relief. Revenue's Contentions: The revenue contended that the products manufactured by the appellant are distinct commercial commodities different from 'cast iron' itself, and thus, are exigible to tax as such. They relied on the High Court's decision in Deccan Engineers v. State of A.P., which held that 'cast iron' in the relevant schedule did not include cast-iron pipes, manhole covers, and bends.

Which sections of the Income-tax Act were involved?

Section 14,Section 15,Section 6,Section 42,Section 9

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 9 PETITIONER: BENGAL IRON CORPORATION Vs. RESPONDENT: C. T. O DATE OF JUDGMENT27/04/1993 BENCH: JEEVAN REDDY, B.P. (J) BENCH: JEEVAN REDDY, B.P. (J) VENKATACHALA N. (J) CITATION: 1993 AIR 2414 1993 SCR (3) 433 1994 SCC Supl. (1) 310 JT 1993 (3) 134 1993 SCALE (2)702 ACT: HEADNOTE:

JUDGMENT: The judgment of the court was delivered by B.P.JEEVAN REDDY J.- Civil Appeal No. 4474 of 1992 1.The appellant is engaged in the manufacture and sale of products like cast-iron pipes, manhole covers, bends etc.

For the assessment year 1989-90, the Commercial Tax Officer, Narayanguda Circle, Hyderabad levied sales tax upon the turnover relating to said products treating them as general goods. He overruled the petitioner’s contention that the said products are declared goods liable to tax at the rate of 4% only. The assessees’ appeal preferred before the Appellate Deputy Commissioner is still pending. Evidently because no stay was granted pending the said appeal, a notice was issued to the appellant calling upon him to pay the tax assessed, against which notice he preferred a writ pe

The order continues below.

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