Allowed

M/S Basudeo Steel Furnitures v. the Commissioner Commercial Tax U.P.Lucknow

Allahabad HC7 Jul 2022STRE/228/2010

Case brief

AI extract

What is this about?

In this tax revision, the Allahabad High Court held that iron frames and grills covered Entry 43 of the Sales Tax Notification as generic iron and steel goods. The court distinguished earlier precedents due to differing legislative entries and allowed the revision against the Tribunal's dismissal.

What did the court decide?

The question of law framed is answered in the negative in favor of the assessee and against the revenue.

M/S Basudeo Steel Furnitures Vs the Commissioner… — Service and Employment | Allahabad HC (2022)

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Court No. - 38

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Case :- SALES/TRADE TAX REVISION No. - 228 of 2010

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Revisionist :- M/S Basudeo Steel Furnitures Opposite Party :- The Commissioner Commercial Tax U.P.Lucknow Counsel for Revisionist :- N.R.Kumar,Vishwjit Counsel for Opposite Party :- C.S.C.

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Hon'ble Saumitra Dayal Singh,J.

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Heard Sri Vishwjit, learned counsel for the assessee and Sri A.C. Tripathi, learned Standing Counsel for the revenue.

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Present revision has been filed by the assessee against the order of the Commercial Tax Tribunal, Bench II, Agra dated 07.12.2009 passed in Second Appeal No. 278 of 2008 for A.Y. 2002-03, whereby the Tribunal has dismissed the appeal filed by the assessee on the issue of rate of tax on sale of iron window and frames etc. fabricated and sold by the assessee. Those commodities have been subjected to tax @ 10% as an unclassified commodity.

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The revision has been heard on the following question of law:

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"Whether on the facts and circumstances of the present case the Tribunal was legally justified to determine the rate of tax at the rate of 10% on enhanced turnover of Rs. 2,50,000-00 of windows grill etc. against the notifications and circular ?"

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Undisputedly, the assessing officer did not make any discussion on the rate of tax on the turnover of self manufactured frames and grills estimated at Rs. 5,00,000/-. Only in the computation chart appended to the assessment order, he applied the rate of tax @ 10%. It is also true, the assessee did not raise any specific ground before the appeal authority as to the rate of tax on the aforesaid turnover of Rs. 5,00,000/- and the first appeal

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authority did not return any finding on the same. Even, in the appeal before the Tribunal, though no specific ground was raised in the memo of appeal, the assessee raised that ground during the course of oral hearing.

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Perusal of the order of the Tribunal reveals, that ground was allowed to be raised by the Tribunal treating it to be a pure legal ground. Thereafter, that ground has been rejected.

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By way of reasoning, the Tribunal has observed, iron frames and grills could not be covered by the notification entry for millstores. That reasoning has been supported by earlier decisions of this Court in Commissioner of Sales Tax Vs. National Cottage Industries, 1978 UPTC 591 and Commissioner of Sales Tax, U.P. Vs. M/S Avon Traders, Varanasi, 1979 UPTC 1137 .

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Having heard learned counsel for the parties and having perused the record, in a tax matter the reasoning or ratio of an earlier decision may apply only if the language of the law or taxing entry remains the same.

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In the present case, for A.Y. 2002-03, the taxing entry stood amended by virtue of Notification No. KA. NI. -2100/XI-9(231)/94-U.P. Act-15-48-Order-2000 dated 15 January, 2000 thereunder Entry 43 reads as below:

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"43. Mill stores and hardware including all kinds of bearing, AttaChakki pathar and iron or steel goods not covered by any item of this Schedule or notification issued under the Act but excluding iron or steel wires."

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Though the above taxing entry begins with description of the taxable commodity as "millstores and hardware" and though it continues to mention certain other specific items, at the same time, it cannot be lost sight that it also

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includes within its sweep and ambit iron and steel goods not covered under any other item of the taxing schedule or other notification.

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Thus, by virtue of the words "iron and steel goods not covered by any other item of this schedule or notification ....." any commodity that may be broadly described as iron and steel goods, would stand covered and included under the notification. The fact though such iron and steel goods may have some specific name description or identity other than the generic identity of iron and steel goods would not itself be enough to exclude such commodity from the scope and sweep of the taxing entry.

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If there was any doubt as to that, the legislature has itself made its intent plain by using the words "but excluding iron or steel wires". Thus, legislature first understood iron or steel wires also to be item that would be included in the generic description of goods given by it as "iron or steel goods". However, since the legislature wanted to exclude the goods iron or steel wires from the scope of the taxing entry, it use the word "excluding". That intent cannot be applied or extended to any other item or commodity.

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Then, it is also not the case of the revenue that there is any other taxing entry to which the goods frames and windows made of iron and steel may describe more appropriately and more exactly. Therefore, the other rule of interpretation that residuary entry may apply only if the item or commodity in question does not describe to any of the specific entry, would come into play to the aid and rescue of the assessee.

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Accordingly, the commodities frames and grills made of iron and steel would be included in Entry 43 of Notification No. KA. NI. -2-100/XI-9(231)/94-U.P. Act-1548-Order-2000 dated 15 January, 2000 by virtue of generic entry of all iron and steel goods as were not specifically excluded.

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The decisions referred to by the Tribunal are wholly distinguishable as they arise in different fact and context and also in the context of different legislative taxing entry.

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Accordingly, the present revision is allowed . The question of law, framed above, is answered in the negative i.e. in favour of the assessee and against the revenue. No order as to costs.

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Order Date :- 7.7.2022 Abhilash

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Digitally signed by ABHILASH SINGH Date: 2022.07.08 18:09:59 IST Reason: Location: High Court of Judicature at Allahabad

M/S Basudeo Steel Furnitures v. the Commissioner Commercial Tax U.P.Lucknow

Case brief

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M/S Basudeo Steel Furnitures v. the Commissioner Commercial Tax U.P.Lucknow

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