MAHESH ENTERPRISES Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) In this Tax Revision Case arising out of the assessment made under APGST Act for the year 1985-86, the question that falls for consideration is about the rate of tax applicable to G.I. (Galvanised Iron) pipes and C.I. (Cast Iron) pipes. The Sales Tax Appellate Tribunal gave the description of the goods sold as 'G.I. pipes and C.I, pipe fittings'. The description given by the appellate Dy. Commissioner is 'C.I. pipes and fittings'. In the assessment order, G.I. pipes are not shown at all as one of the items on which the dispute as to rate of tax arises. The assessing authority described the goods as 'G.I. fittings'. Thus, the suffix 'pipes' is not found after 'G.I.' in the assessment order. Either 'G.I. pipes' or 'G.I. fittings' are not referred to in the first appeal order at all.

(2.) The Tribunal negatived the contention of the appellant that 'G.I. pipes' are declared goods falling under Entry 2(xi) of the Third Schedule to APGST Act corresponding to item (ii) of Section 14(iv) of the CENTRAL SALES TAX ACT, 1956. The item reads:

(3.) The Tribunal accepted the contention of State representative that they were meant to be used as water supply and sanitary fittings falling under Entry 102 of the first schedule which attracts tax at the basic rate of 9%, If they are treated as 'declared goods' falling under Entry 2 of the third schedule, the goods would attract the tax at the rate of 4% only. The conclusion of the Tribunal is based on the reasoning that the G.I. pipes are used in bathrooms, lavatories and urinals and therefore, they become a different commercial commodity other than the steel pipes. In our view, the approach of the Tribunal is not correct. If G.I. pipes and G.I. pipes and fittings whichever are sold, can be classified as steel tubes and fittings, they become the goods of special importance as enumerated in Sec.14 of the CENTRAL SALES TAX ACT, 1956. In respect of these goods which are otherwise known as 'declared goods', the rate of tax is 4%. When once they answer the description and nomenclature of 'steel tubes' under the Entry 2(xi) of the third schedule, the rate of tax applicable thereto cannot exceed 4% irrespective of the fact whether they can also be regarded as water supply and sanitary fittings falling under some other schedule and entry. Section 15(a) of the CENTRAL SALES TAX ACT, 1956 enjoins that the Sales-tax payable under any State law in respect of sale or purchase of declared goods inside the State shall not exceed 4% of the sale or purchase price thereof. We find it difficult to endorse the cryptic reasoning of the Tribunal that steel tubes become a different commodity because they are used in bathrooms and lavatories or for the purpose of water supply. The characteristics of steel tubes are not lost depending on their user if they are otherwise steel tubes.