COMMISSIONER SALES TAX Vs. KAMAL ENGINEERING WORKS

JUDGEMENT

(1.) The question involved in this revision filed by the Commissioner, Sales Tax, Uttar Pradesh, Lucknow, under Section 11(1) of the U. P. Sales Tax Act is as to whether pulleys are liable to be taxed as iron and steel under Section 14(iv) of the Central Sales Tax Act or as hardware, machinery or an unclassified item.

(2.) The assessment year involved is 1973-74. The respondent-assessee carried on business in pulleys, agricultural implements, etc. For the aforesaid assessment year, the assessee disclosed intra-State sales of pulleys at Rs. 44,780 and of agricultural implements at Rs. 12,445. The assessing officer did not accept the book version nor did he agree with the assessee that the sales of pulleys purchased from U. P. were not taxable. He determined the total sales at Rs. 80,000 and allowed exemption in respect of sales of agricultural implements. It may be noted that pulleys were treated by him as "mill stores and hardware".

(3.) The assessee filed an appeal, but remained unsuccessful and then filed a revision. The revising authority accepted the assessee's contention that there was no proper reason for rejecting the accounts. It also agreed with the assessee that pulleys were liable to be assessed as iron and steel under Section 14(iv) of the Central Act but did not accept the assessee's contention that the assessee did not carry on any manufacturing process. The revising authority found that the assessee used to purchase unfinished pulleys and then they were subjected to filing, chiselling and such other processes and that brought the assessee within the definition of a "manufacturer" under Section 2(e-l) of the U. P. Act. On this view the sales of pulleys disclosed by the assessee were directed to be taxed at 3 per cent. Being aggrieved, the department has filed the present revision.