BAHRI STEEL WIRES Vs. ADDITIONAL COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The main contention raised by the petitioners involves the effect and interpretation of sub-item (xv) of item (iv) in section 14 of the Central Sales Tax Act, 1956 (for short "the Central Act") as well as item 2(xv) of the Fourth Schedule to the Karnataka Sales Tax Act, 1957 (for short "the State Act"). Section 14 of the Central Act declares the goods stated therein as goods of special importance in inter-State trade and as per section 15 of the said Act, the sales tax law of a State shall not impose or authorise the imposition of a tax on the sale or purchase of declared goods, at a rate exceeding the rate stated in section 15; further, where a tax has been levied under the State law in respect of the declared goods and such goods are sold in the course of inter-State trade or commerce, and tax has been paid thereon under the Central Act in respect of the sale of such goods, the tax levied under the State law shall be reimbursed to the person making such sale in the course of inter-State trade or commerce. This restriction imposed on the powers of the State to impose sales tax on declared goods, is carried out in section 5(4) of the State Act read with the Fourth Schedule thereto.

(2.) The petitioners, herein, are dealers in M.S. wires; according to them, they purchase M.S. wire rods from the registered dealers within the State of Karnataka and out of such M.S. wire rods of thicker gauge, wires of thinner gauge are drawn and these wires are then sold by them.

(3.) In the case of the petitioner in W.P. No. 1077 of 1988 (M/s. Bahri Steel Wires) assessments for the periods earlier to 1983-84 were concluded on the basis that the sales of these M.S. wires drawn out of M.S. wire rods (which had already suffered tax under the State Act), were not taxable further, because, as per section 5(4) of the State Act read with its Fourth Schedule, only a single point of tax was leviable. Regarding the goods enumerated under item 2 of the said Schedule, the point of levy is the sale by the first or earliest of successive dealers in the State liable to tax under the said Act. Therefore, if the sale of the relevant goods is taxed in the hands of the first dealer in the State, the subsequent sales were not liable to be taxed.