SUBHASH IRON AND STEEL ROLLING INDUSTRIES Vs. STATE OF GUJARAT
LAWS(GJH)-1982-2-11
HIGH COURT OF GUJARAT
Decided on February 09,1982

SUBHASH IRON AND STEEL ROLLING INDUSTRIES Appellant
VERSUS
STATE OF GUJARAT Respondents


Referred Judgements :-

HEMCHANDBHAI AND CO. V. STATE OF GUJARAT [REFERRED TO]
HINDUSTAN STEEL LIMITED VS. STATE OF ORISSA [REFERRED TO]
DELHI CLOTH AND GENERAL MILLS COMPANY LIMITED VS. COMMISSIONER OF SALES TAX INDORE [REFERRED TO]



Cited Judgements :-

STERLITE OPTICAL TECHNOLOGIES LTD VS. OIL INDIA LIMITED [LAWS(GAU)-2007-7-10] [REFERRED TO]
HILLS TRADE AGENCIES VS. HINDUSTAN PAPER CORPORATION LTD [LAWS(GAU)-2007-1-83] [REFERRED TO]
NILESH AGENCIES VS. STATE OF KARNATAKA [LAWS(KAR)-2014-4-171] [REFERRED TO]
SIRIA RICE AND GENERAL MILLS VS. FOOD CORPORATION OF INDIA AND ANOTHER [LAWS(P&H)-2018-7-99] [REFERRED TO]
PRADIP KUMAR RAY VS. FOOD CORPORATION OF INDIA AND 2 ORS [LAWS(GAU)-2019-2-57] [REFERRED TO]


JUDGEMENT

SHUKLA, J. - (1.)M/s. Subhash Iron and Steel Rolling Industries had filed the second appeal in the Gujarat Sales Tax Tribunal at Ahmedabad against the order of the learned Assistant Commissioner of Sales Tax, Ahmedabad, who had dismissed its first appeal against the order of forfeiture of the amount of Rs. 27,104 passed by the learned Sales Tax Officer of Ahmedabad dated 15th November, 1971, in respect of the period from 7th April, 1967, to 31st March, 1968, as the relevant year of account.
(2.)?The facts of the case may shortly be stated as under :
M/s. Subhash Iron and Steel Rolling Industries was a dealer registered under the Bombay Sales Tax Act, 1959 , and was dealing in the business of manufacture and sale of bars, billets and rods of iron and steel as manufactured out of iron scrap. The assessee, namely, M/s. Subhash Iron and Steel Rolling Industries, had purchased iron scrap locally from registered dealers and had manufactured and sold the said bars, billets and rods during the above year of account. The iron scrap purchased by the assessee as raw materials were goods specified in entry 3 of Schedule B, Part I, to the Bombay Act, but even when the assessee had converted iron scrap into bars, billets and rods by a process of "manufacture" as defined in sec. 2(17) of the Bombay Act, the assessee had not done anything to the iron scrap which it had originally purchased, so as to take the manufactured bars, billets and rods out of the description of the goods contained in the aforesaid entry 3 of Schedule B, Part I, to the Bombay Act. Therefore, the sales of the above bars, billets and rods as manufactured goods in question continued to be resale of original goods, namely, raw materials consisting of scrap, within the meaning of the expression "resales" as defined in clause (iii) of sec. 2(26) of the Bombay Act. The assessee was entitled to deduction of such resales from its turnover of sales for the purpose of assessment. In short, the assessee was not liable to pay any tax on such resales. This is an undisputed position before us.

(3.)?The case of the department was that the assessee had issued sale bills to its customers so as to charge and recover sale price as being specifically "inclusive of sales tax" while effecting the resales in question. The learned Sales Tax Officer found that since the assessee's sale bills were inclusive of tax, it had collected an amount of an amount of Rs. 27,104 in all by way of tax from the customers even though the assessee itself was not liable to pay any such tax on those resales. In the opinion of the learned Sales Tax Officer, the collection of Rs. 27,104 was an illegal collection by way of tax and thereby the assessee violated the mandatory provisions contained in sub-section (2) of section 46 of the Bombay Sales Tax Act, hereinafter referred to as "the Bombay Act". Invoking sec. 37(1) and sec. 46(2) of the Bombay Act, the learned Sales Tax Officer forfeited the aforesaid illegal recovery of the amount of Rs. 27,104. The Sales Tax Officer in his order dated 15th November, 1971 (annexrue III), has stated to the effect that the assessee had been given deduction in respect of those resales and as the assessee had prepared the bills of the resale as "inclusive of tax", the said collection is deemed to be unauthorised, and after hearing the assessee, it is decided to forefeit the amount of Rs. 27,104. The learned Sales Tax Officer also imposed penalty of Rs. 585 upon the appellant in terms of sub-section (3) of sec. 36 of the Bombay Act on the ground that the assessee had not paid the tax due within the prescribed time, but we are not in the present reference concerned with the imposition of the penalty.
;


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.