B.P.JEEVAN REDDY - (1.) CIVIL Appeal No. 4474 of 1992. The appellant is engaged in the manufacture and sale of products like cast-iron pipes, man-hole covers, bends etc. For the assessment year 1989-90, the Commercial Tax Officer, Narayanguda Circle, Hyderabad levied sales tax upon the turn-over relating to said products treating them as general goods. He overruled the petitioner's contention that the said products are declared goods liable to tax at the rate of 4 Per Cent only. The assessees' appeal preferred before the Appellate Deputy Commissioner is still pending. Evidently because no stay was granted pending the said appeal, a notice was issued to the appellant calling upon him to pay the tax assessed against which notice he preferred a writ petition being W. P. No. 9315 of 1992, in the High Court of Andhra Pradesh. His main contention in the writ petition was that by virtue of G. 0. Ms. No. 383 Revenue(s) Department 17-4-1985, his products are 'declared goods' and are, therefore, liable to tax only @ 4 Per Cent .
(2.) THE Division Bench of the High Court dismissed the writ petition following its earlier decision in Deccan Engineers v. State of Andhra Pradesh (reported in 1991, Vol. 12 A.P. Sales Tax Generals, 138: 84 STC 92). In Deccan Engineers, it was held by the A. P. High Court that the expression 'cast iron' in item (2)(i) of the Third Schedule to the Andhra Pradesh General Sales Tax Act does not include cast-iron pipes, man-hole covers and bends etc. In this appeal, the correctness of the said view is questioned. Third Schedule to the Andhra Pradesh General Sales Tax Act pertains to "declared goods in respect of which a single point tax only is leviable under Section 6". Section 6 was enacted by the A. P. Legislature to accord with sections 14 and 15 of the Central Sales Tax Act. Item (2) of the Third Schedule to the A.P. Act reads as follows: THIRD SCHEDULE (As amended up to 15/08/1987) Declared goods in respect of which a single point tax only is leviable under Section 6. JUDGEMENT_310_SUPP1_1994Html1.htm Item (2) of the Third Schedule to the A. P. Act is an exact replica of item (iv) of Section 14 of the Central Sales Tax Act. According to Section 15 of the Central Act. 'declared goods' cannot be taxed at a rate exceeding 4 Per Cent or at more than one stage.
(3.) THE precise question that was considered in Deccan Engineering (1992 (84) STC 92) (AP) (followed in the judgment under appeal) was whether the 'cast iron castings' manufactured by the petitioner in that case are 'cast iron' within the meaning of item (2)(i) of the Third Schedule to the A.P. Act/ Item (iv)(i) of section 14 of the C.S.T. Act. At this stage, it is necessary to ascertain precisely what does 'cast iron' mean and how are the products of the appellant manufactured. 'Cast iron' is defined in the Concise Oxford Dictionary as "a hard alloy of iron, carbon and silicon cast in a mould". According to New Lexicon Webster's dictionary of English language, the word 'cast iron' means "an iron-carbon alloy produced in a blast furnace. It contains up to 4 Per Cent carbon, and is more brittle, but more easily fused, than steel." According to Van Nostrand's Scientific encyclopedia, 'cast iron' is "primarily the product of remelting and casting pig iron". (Interestingly, the expression 'cast iron' - with a hyphen between 'cast' and 'iron' - has been defined separately as meaning "made of cast iron". So far as Item (iv) of section 14 is concerned, the official publication spells the expression 'cast iron' without a hyphen. Though an authorised publication of the A. P. Act is not placed before us, we presume that the printing of the said expression in the private publication placed before us represents the correct rendering - it is without a hyphen.) That 'cast iron' is different from 'cast iron castings' is brought out in the following extract from the Judgment in 'Deccan Engineering', (1992 (84)STC 92) which is equally true in the case of the appellant as well: "THE assessee manufactures and sells various goods mentioned earlier made from cast iron which has suffered sales tax. THE controversy is whether these several goods sold by the petitioners continue to be the same declared goods covered by the aforesaid entry or are different commercial commodities liable to levy of State Sales Tax. THE case of the Revenue is that, items sold by the petitioner are, therefore, exigible to tax as a distinct commercial commodity. It is contended by the learned counsel for the assessee that the relevant entry in Section 14 of the Central Act also IIIrd Schedule of the State Act speak of cast iron including ingots, moulds and bottom plates, iron scrap etc. which indicates that any casting made out of cast iron also should be treated as included in the entry because of the word used 'including' in the entry. It is further contended that the Government of India in their letters have clarified that cast iron castings are covered by cast iron and the State Government has also issued the aforesaid G.O. subsequently under Section 42(2) of the State Act clarifying that the cast iron castings are covered within the term cast-iron." It is thus clear that 'cast iron' is different from 'cast iron castings' manufactured by the appellant. 'Cast iron' is purchased by the appellant and from that 'cast iron', he manufactures several goods like manhole covers, bends, cast iron pipes, etc. In other words, 'cast iron' used in item (iv) of section 14 of the Central Act is the material out of which the petitioner's products are manufactured. Position remains the same, even if the appellant purchases iron and mixes it with carbon and silicon thereby deriving ,cast iron' and then pours it into different moulds, In sum, 'cast iron' is different from the cast iron pipes, manhole covers, bends etc. manufactured and sold by the appellant. It cannot be denied, in such a situation that the products manufactured by the appellant are, in commercial parlance, different and distinct goods from the cast iron. Indeed this aspect is not seriously disputed by Shri Ganguli, the learned counsel for the appellant, His case is entirely based upon certain clarifications and circulars issued both by the Central and State Governments and in particular upon an order issued by the Andhra Pradesh Government under section 42(2) of the A. P. Act viz., G.O. Ms. No. 383 dated 17-4-1985. It is, therefore, necessary to refer to them.;