SHIVAMONI STEEL TUBES LIMITED Vs. JOINT COMMISSIONER OF COMMERCIAL TAXES VIGILANCE GANDHINAGAR BANGALORE

JUDGEMENT

(1.) THE appellant is a public limited company. It is engaged in the business of manufacture of steel tubes out of the raw materials like steel skull, stripes and coils, etc. During the assessment years 1978-79 and 1979-80, it had purchased the said raw materials within the State of karnataka from the registered dealers and were subjected to tax at the first point under section 5 of the Karnataka Sales Tax Act, 1957 ("the State Act", for short ). Thus, the raw materials consumed by the appellant in the manufacture of steel tubes were tax-paid goods.

(2.) DURING the assessment years in question, the appellant had sold the steel tubes manufactured by it, both within the State as also in the course of inter-State trade and commerce. While assessing the inter-State sales of steel tubes, the assessing officer rejected the dealer's contention that the benefit of "set-off' envisaged by Explanation II under the Fourth Schedule to the Act was also available to the appellant in the assessment of its inter-State sales under the Central Sales tax Act, 1956 ("the Central Act", for short ). According to the assessing officer, sub-section (2a)of section 8 of the Central Act was of no avail to the appellant. But on an appeal, the Deputy commissioner granted the desired relief to the appellant by holding that the set-off or reduction envisaged under Explanation II of the Fourth Schedule to the "state Act" will amount to "reduction of tax generally" for the purpose of section 8 (2a) of the Central Act. The Joint commissioner, by his impugned order dated April 11, 1990, passed under section 22a of the state Act, has set aside the said appellate order and restored the assessment order. The appellant being aggrieved by the said revisional order has come up with appeal before this Court.

(3.) IT is not in dispute that the raw materials acquired as well as the steel tubes manufactured by the appellant are declared goods within the meaning of section 14 of the "central Act", as also under Sl. No. 2 of the Fourth Schedule to the State Act.