AGRA METAL PERFORATORS Vs. COMMISSIONER SALES TAX

JUDGEMENT

(1.) This is assessee's revision under Section 11(1) of the U. P. Sales Tax Act relating to the assessment year 1973-74. The assessee deals in perforated iron sheets. His account books and disclosed turnover for the aforesaid year were rejected by the Sales Tax Officer and best judgment assessment was made which was confirmed on appeal except that some reduction was allowed in the net turnover. On further revision the Additional Judge (Revisions), Agra, accepted the accounts. As for rate of tax the Sales Tax Officer treated perforated sheets as mill stores or hardware while the Assistant Commissioner (Judicial) treated them to be an unclassified item and liable to tax as such. The assessee contended before the Additional Judge (Revisions) that perforated sheets sold by him fell in the category of "iron and steel" as defined in Clause (iv) of Section 14 of the Central Sales Tax Act and after the amendment in the section by amending Act 61 of 1972, which came into effect from 1st April, 1973, sheets both plain and corrugated are covered by the expression "iron and steel". It was explained that the assessee purchases iron sheets and after perforating them against orders sells the same and thus perforated sheets remain only iron sheets without undergoing any change in the essential characteristic of sheets. Reliance was placed on Commissioner of Sales Tax v. Tata Iron and Steel Company [1976] 38 S.T.C. 10, in which it was held that galvanisation and corrugation process do not change the essential character of the iron and steel and they remain iron and steel even after such process and on that analogy it was contended that perforation of sheets does not bring about any change in the commodity. The learned Additional Judge (Revisions) did not accept this contention since in his opinion by perforating holes in sheets a change is made in its form and use. Perforation cannot be equated with galvanisation and corrugation and thus perforated sheets have to be treated as an unclassified item.

(2.) It would thus be seen that the question that falls for consideration in this revision is as to whether iron sheets after perforation of holes still remain iron sheets liable to be treated as iron and steel under Clause (iv) of Section 14 of the Central Act or they undergo a change and a different commercial commodity comes out and are to be treated as an unclassified item. It will be useful to quote the relevant provisons at this place. Section 14 of the Central Act declares certain goods enumerated therein to be "of special importance in inter-State trade or commerce". The list of goods given therein at serial No. (iv) as it stood prior to the amendment of this clause in 1972 was :

(3.) It is not necessary to mention the other sub-clauses of this clause because the assessee has placed reliance on this clause alone and claims that iron sheets even after perforation remain sheets under this sub-clause. It would be seen that the amendment has now taken care of galvanised and corrugated iron sheets and has equated them with sheets. In other words the question as to whether any change occurs in sheets after they are galvanised and corrugated does not arise. Perforated sheets have not been mentioned and in that regard the question still remains as to whether iron sheets after perforation can be treated as sheets only.