STATE OF ANDHRA PRADESH Vs. VENKATESH FOUNDRY

JUDGEMENT

(1.) In all these tax revision cases preferred by the State against the orders of the Sales Tax Appellate Tribunal allowing various appeals filed by several assessees, the common question that arises for our consideration is whether the goods sold by the assessee and described by them as "cast iron castings" which are manufactured out of tax-suffered pig iron and cast iron or iron scrap were "cast iron" are covered by item 2(i) of the Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as "the Act") and therefore the turnovers relating to the said sales were not taxable on the ground that the said sales were second sales.

(2.) In all those appeals, the Tribunal proceeded on the basis that the goods sold by the assessees were cast iron castings and held that cast iron and cast iron castings were commercially one and the same commodity. The Tribunal did not enquire into the meaning of the term "cast iron castings" and whether the goods involved were in fact cast iron castings or were different finished commercial products. The Tribunal relied on G.O. Ms. No. 383, Revenue(S) dated 17/04/1985, of the Government of Andhra Pradesh wherein the Government clarified under sub-section (2) of section 42 of the Act that "the 'cast iron castings' were covered by the term 'cast iron including ingot moulds, bottom plates' occurring in sub-item (i) of item 2 of the Third Schedule" to the Act. The said clarification was issued by the Government of Andhra Pradesh on the basis of the clarification issued by the Ministry of Finance, Department of Revenue, Government of India, in their Letter F. No. 24/10/80-CT dated 31/01/1984 to the effect that "cast iron castings" were covered by the term "cast iron". The Tribunal also noticed that entry 2 of the Third Schedule to the Act was a verbatim reproduction of section 14(iv)(i) of the Central Sales Tax Act, 1956 and that Government of India in their Letter No. 24/14/76-ST Department of Revenue and Banking, dated 28/02/1977, addressed to all the Finance and Revenue Secretaries of all State Governments and Union Territories, stated as follows :

(3.) The Tribunal observed that whatever goods were specified in the Central Sales Tax Act, 1956 (hereinafter referred to as "the Central Act"), must be treated as declared goods by every State law, and in view of G.O. Ms. No. 383 dated 17/04/1985, the position clarified by the State Government could not be disputed by the State Representative. In the circumstances, the Tribunal answered the question "whether cast iron and cast iron castings are commercially one and the same commodity for purpose of exigibility to tax under the Andhra Pradesh General Sales Tax Act ?" in favour of the assessees and against the department and allowed the appeals preferred by the assessees and excluded the disputed turnover from the taxable turnover. A detailed order dated April 30, 1986, was made by the Tribunal in T.A. No. 766 of 1984 against which T.R.C. No. 74 of 1987 is preferred; the Tribunal followed the said order in all its orders out of which T.R.C. Nos. 24, 27, 28, 29, 44 and 35 of 1987 and 27 of 1988 arise. T.R.C. No. 187 of 1988 is preferred against the order of the Tribunal in T.A. No. 107 of 1987 dated 8/01/1988. In the said T.A. No. 107 of 1987 the State Representative, relying on the decision of the Supreme Court in Stare of Tamil Nadu v. Pyare Lal Malhotra [1976] 37 STC 319 and that of the Madras High Court in State of Tamil Nadu v. India Metal Industries [1980] 46 STC 304, contended that pig iron, cast iron, iron scrap and cast iron castings were different commercial commodities and that castings prepared out of pig iron, iron scrap and other materials were exigible to tax. But the said contention was rejected by the Tribunal on the ground that the said two decisions considered "the entry before its amendment" and that after the amendment the clarification was issued by the Andhra Pradesh Government under sub-section (2) of section 42 of the Act. The Tribunal also relied on the judgment of a Division Bench of this Court in Adarsh Foundries v. Commissioner of Commercial Taxes [1988] 70 STC 151, rendered in special appeals under section 23 of the Act. The question that fell for decision in that case was whether the Commissioner of Commercial Taxes in exercise of his revisional powers under section 20 of the Act was justified in holding that cast iron castings were not "cast iron" falling within item No. 2(i) of the Third Schedule to the Act and that they were liable to be taxed under section 5(1) of the Act. This Court referred to the said G.O. Ms. No. 383 dated 17/04/1985 and held as follows :