HARU ADHIKARI Vs. STATE OF KERALA

JUDGEMENT

(1.) Petitioner is a dealer in sanitary items, GI pipe, fittings etc. The sales tax assessment was completed by the assessing officer during the year 1995-96 accepting the books of accounts. However, Deputy Commissioner later noticed that petitioner was subjected to penalty by the Intelligence Officer in respect of transport of consignment of goods under S.29A(4) of the KGST Act. Based on the penalty levied under S.29A(4) the Deputy Commissioner set aside the assessment order and remanded the case back to the assessing officer for fresh assessment after taking into account the penalty levied by the Intelligence Officer. The original assessment was completed on 01/12/1998 and the Deputy Commissioner passed orders under S.35 on 03/06/2002. Revised assessment was completed by the assessing officer pursuant to the orders issued by the Deputy Commissioner on 29/05/2005. While revising the assessment pursuant to order issued under S.35 by the Deputy Commissioner, the assessing officer revised the rate of tax on pipe fittings used for sanitary purpose at the rate of 10% as against 4% originally applied. The case of the petitioner is that in appeal filed against assessment petitioner raised a contention that the assessing officer has no jurisdiction to revise the rate of tax on pipe fittings used for sanitary work from 4% to 10% because Deputy Commissioner in his orders issued under S.35 had not considered such an issue. According to the petitioner assessment in all other respects had become final and, therefore, the assessing officer is bound to only comply with the directions contained in the order of the Deputy Commissioner. The petitioner has also contested the rate of tax on galvanised pipe fittings on merits. Petitioner could not succeed in two level appeals and hence this revision is filed against the order of the Tribunal.

(2.) We have heard counsel appearing for the petitioner and Govt. Pleader appearing for the respondent.

(3.) The first question to be considered is with regard to the petitioner's dispute against rate of tax applied on pipe fittings. According to the petitioner the pipe fitting sold are GI pipes and therefore, the items fall under entry 2(k) of the Second schedule to the KGST Act taxable at 4%. According to the Govt. Pleader sanitary equipments and fittings fall under entry 149 of the First Schedule to the KGST Act. The items sold are galvanised iron pipe fittings used for water supply and in sanitary equipments and fittings. The question to be considered is whether the item would come under second Schedule item 2(k) which provides for steel tubes, both welded and seamless of all diameters and lengths including tube fittings. We do not think GI Pipe fittings fall under entry 2(k) because the items referred to therein are only steel tubes and tube fittings. Galvanised iron pipes and pipe fittings are steel pipes and fittings quoted outside and inside with zinc to make it rust proof. Steel tubes and galvanised steel tubes are different products. Similarly tube fittings when galvanised i.e. on quoting with zinc becomes commercially different and there is substantial value addition in the process of galvanisation. Second schedule does not cover galvanised steel tubes or galvanised steel tube fittings. Therefore, the items sold by the petitioner are not covered by entry 2(k) of the second schedule. There is no dispute that the items are used as water supply and sanitary equipments and so much so the rate of tax applied at 10% during the year 1995-96 under entry 149 of the first schedule is correct. We therefore reject this contention.