Commissioner of Sales Tax vs Jalani Tools (India) Ltd.

In Reference Application Nos. 74 to 78 of 1997, the applicant/Commissioner of Sales Tax, Maharashtra State has persuaded the Tribunal to refer the following questions to this court for its opinion :

"(1) Whether on a true and correct interpretation of entry 6(ix) of Schedule B appended to the Bombay Sales Tax Act, 1959 and entry No. 14(iv)(ix) of the Central Sales Tax Act, 1956, ''tools-open jaw spanners'' attract the tax liability at four per cent, or should be treated as falling within the scope of residuary entry No. 102 of Schedule C Part II appended to the Bombay Sales Tax Act, 1959?

(2) Whether, on the facts and in the circumstances of the case and on a true and correct interpretation of the judgment of this High Court in the case of Ranchhoddas Bhaichand Vs. Commissioner of Sales Tax, Maharashtra State, Bombay , the Tribunal was justified in law in allowing the appellant to raise the additional ground regarding the assessment in second appeal when the appellant had not challenged the assessment in first appeal and especially when the subject-matter of appeal before the first appellate authority was penalty under section 36(2)(c) of the Bombay Sales Tax Act, 1959 and not the assessments?"

The respondent/M/s. Jalani Tools (India) Limited had filed the second appeals for different periods under the Bombay Sales Tax Act, 1959 before the Maharashtra Sales Tax Tribunal. All these appeals were preferred against various penalties and interest. However, the assessee filed five miscellaneous applications seeking permission of the Tribunal to allow it to raise an additional ground regarding the rate of tax on sale of "hand-tools" manufactured by it. According to the assessee, the impugned goods were declared goods inviting rate of tax at four per cent. However, the assessing officer levied the sales tax at 10 per cent, on the same. In raising this additional ground, reliance was placed upon a judgment of this court in the case of Ranchhoddas Bhaichand Vs. Commissioner of Sales Tax, Maharashtra State, Bombay .

The Revenue opposed these applications by contending that the Second Appeal Nos. 685 and 686 of 1995 are against penalties and for the period January 1, 1984 to December 31, 1985. The original orders of assessment were challenged, but with regard to the rate of tax no issue was raised before the first appellate authority. Therefore, the additional ground is being raised for the first time and when the levy was never disputed. It is in these circumstances that the Tribunal has passed the orders allowing the miscellaneous applications. The Tribunal held that two penalty orders are part of the assessment order and hence, it was permissible for the assessee to raise this additional ground.

It is in these circumstances that on August 30, 1997 the Tribunal heard these second appeals and concluded that the matter must go back to the lower appellate authority. The Tribunal disposed of the appeals by directing the lower appellate authority to take other consequential measures and actions. The operative part of the final order reads as under:

"Order

Each of the Miscellaneous Application Nos. 113, 114, 115, 116 and 117 of 1997 is allowed.

Each of the Second Appeal Nos. 685, 686, 687, 688 and 689 of 1995 is allowed. The matter to go back to the lower appellate authority for its action as under:

(a) To recompute the tax liability of the appellant for all the periods by taxing the sale of jaw spanners and hand tools'' at four per cent, as declared goods.

(b) Delete additional tax and turnover tax on the said turnover for all the periods.

(c) To recalculate interest/penalty under section 36(3) of the Bombay Act by holding the tax liability of the appellant at 4 per cent.

The appellate authority is also directed to take any other consequential actions as a result of the foregoing actions which are permissible under the law.

The appellate authority is directed to complete from the date of receipt of this judgment.

The compliance report of the necessary action having been taken is directed to be sent to the Registrar, Maharashtra Sales Tax Tribunal, Mumbai."

The Revenue sought reliefs by making five reference applications for referring the matters to this court and on December 19, 1998 the Tribunal passed the order of reference. After a detailed discussion with regard to the facts and law applied, the Tribunal has referred the above questions. They are subject-matter of Reference Application Nos. 74 to 78 of 1997 and they are filed in Second Appeal Nos. 685 to 689 of 1995 decided on August 30, 1997.

We are only concerned with these questions.

Mr. S.K. Nair, learned "A" Panel Counsel appearing in support of this Reference Application, submitted that with effect from July 1, 1981 the entry 6 in Schedule B appended to the Bombay Sales Tax Act, 1959 included sub-entry (ix) as follows:

"(ix) tool, alloy and special steels of any of the above categories."

Mr. Nair submits that the Tribunal in the case of predecessor in title of the assessee, namely, M/s. Gedore Tools (P) Limited, held that "hand tools" are not declared goods and are covered by residuary entry E22 at the relevant time. This was for the assessment period July 1, 1979 to June 30, 1980. Mr. Nair submits that the assessment order was passed on January 27, 1992 by the Assistant Commissioner of Sales Tax, Mumbai 400 010 for the period January 1, 1988 to March 31, 1989 whereby he taxed the sale of tools at Rs. 3,06,07,309 at the rate of 10 per cent, and levied the tax at Rs. 30,60,731. The additional tax and turnover tax was levied at Rs. 3,67,288 and Rs. 5,64,490, respectively. The total tax payable was computed at Rs. 39,52,509 and the calculation and computation was made accordingly. The assessment orders passed on July 20, 1992 and July 27, 1992 have been referred by Mr. Nair for the periods covered thereunder and it is submitted by him that five appeals were brought by the assessee before the Deputy Commissioner of Sales Tax (Appeals). The grounds of appeals were restricted to three, namely, the company has suffered heavy losses up to 1990-91, as per the order passed by the Board for Industrial and Financial Reconstruction the interest on turnover tax should be charged at 13 per cent, and other interest/penalty should be waived or reduced or remitted. In addition to these submissions, copies of revised rehabilitation scheme prepared by the industrial reconstruction agency were placed on record. The Deputy Commissioner of Sales Tax (Appeals) passed the order on December 14, 1994 only considering these grounds and granted remission in interest and penalties.

Mr. Nair submits that in the meanwhile the High Court of Madhya Pradesh rendered a decision in the case of M/s. National Lock Stores and particularly the Commissioner of Sales Tax, M.P. v. National Lock Stores reported in [1996] 101 STC 83 (MP), holding that screwdrivers, saws, pickaxes, etc., should naturally fall in the expression of "tool" appearing in item (ix) of clause (iv) of section 14 of the Central Sales Tax Act, 1956. The Madhya Pradesh High Court held that this item, therefore, be brought to tax at four per cent, being covered by entry 1 of Part I of the Second Schedule to the Madhya Pradesh General Sales Tax Act, 1958. That is how when the appeals were brought and styled as second appeals before the Tribunal against the decision of the first appellate authority that the asses-see made the above miscellaneous applications. The miscellaneous applications were allowed and the additional grounds were raised so as to dispute the tax liability itself.

Mr. Nair, therefore, submits that the Tribunal has erred in law in allowing the additional grounds to be raised and for the first time at the second appellate stage. That was not permissible firstly because no foundation for the same was laid either during the course of the assessment orders or before the first appellate authority. The Revenue was taken by surprise by such applications being made and allowed. Reliance placed by the Tribunal, in permitting the additional grounds to be raised, on the judgment of this court in the case of Ranchhoddas Bhaichand Vs. Commissioner of Sales Tax, Maharashtra State, Bombay is entirely misplaced. Mr. Nair submits that in that case the assessing officer had passed a composite order containing the assessment of tax, as also, levy of penalty/interest. In the appeal filed against this composite order the challenge was to the penalty/interest. However, later the assessee filed miscellaneous application seeking permission to raise the additional ground relating to assessment of tax. The first appellate authority treated this application, as a separate appeal against the assessment of tax and dismissed it as being barred by limitation. According to Mr. Nair, these are distinguishing features from the case of Ranchhoddas Bhaichand Vs. Commissioner of Sales Tax, Maharashtra State, Bombay wherein this court found that firstly there was composite order against which the appeal was filed and secondly, before the first appellate authority the application was made to raise an additional ground which was treated as a separate appeal and dealt with as such, but not entertained on the ground of limitation. In, the absence of such comparable situation in the present case the Tribunal should not have allowed the additional grounds to be raised. Therefore, apart from anything else present the reference will have to be answered in favour of the Revenue and against the assessee on this question alone.

Without prejudice and in the alternative, Mr. Nair would submit that the true and correct interpretation of entry 6(ix) of the Schedule B appended to the Bombay Sales Tax Act, 1959 would show that the Parliament had in mind the tool steel, alloy steel and special steel. It could not have included "tools" as an independent item because in all entries under section 14 of the Central Sales Tax Act, 1956 the goods were mentioned in plural whereas in the present case the Legislature did not mention in the entry "tools", but as "tool" in singular. In comparison the word "steels" is found in plural. That is how the entry will have to be construed as above. Mr. Nair submitted that reliance placed on the judgment of the Madhya Pradesh High Court in National Lock Stores [1996] 101 STC 83 (MP) was misplaced. The Madhya Pradesh High Court had not discussed the matter completely and in its true and proper perspective. There are several aspects which have gone unnoticed. In that regard, Mr. Nair submits that the Madhya Pradesh High Court has proceeded on the footing that the entry is in plural and not singular. No argument whether the entry is plural or singular seems to have been canvassed before the Madhya Pradesh High Court. The aspect of the matter and which is fundamental, according to Mr. Nair, is that the declared goods are raw material. There is a comma between the words "tool" and "alloy" and thereafter, there is conjunction "and" between the words "alloy" and "special". These three words, namely, tool, alloy and special and each one of them is qualifying the word "steel" which means the whole clause should be read as "tool steel, alloy steel and special steel". There are different kinds of steels which are used for specific purposes, according to Mr. Nair, Therefore, the word "tool" used in the entry is adjective and not noun. It cannot be read in isolation and must be read in conjunction with the word "steel".

In these circumstances that Mr. Nair placed reliance upon the word "tool steel" as defined in Webster''s Third New International Dictionary at page 2409. He also made reference to the definition of the term "alloy steel". Mr. Nair placed reliance on the Government of India, Ministry of Finance (Department of Revenue & Insurance) Circular No. 24/20/75ST regarding the scope of definition of the terms "iron and steel" as given under section 14(iv) of the Central Sales Tax Act, 1956 as amended by the Act of 1972. Reliance is then placed by Mr. Nair on the judgment of the honourable Supreme Court in the case of Bengal Iron Corporation and another Vs. Commercial Tax Officer and others, . He also placed reliance upon a further judgment of the honourable Supreme Court in the case of Vasantham Foundry Vs. Union of India and others, . Finally, Mr. Nair places reliance on the judgment of the honourable Supreme Court in the case of Bansal Wire Industries Ltd. and Another Vs. State of U.P. and Others, . All this is an attempt to demonstrate that the order passed by this court in Sales Tax Reference No. 2 of 2003 (Commissioner of Sales Tax, State of Maharashtra v. Raymond Limited decided on August 28, 2009) will not decide the fate of the present reference. The attempt of Mr. Nair is that this short order should not bind us because the attention of this court was not invited firstly to the entry and secondly, whether the same must be read in the manner as read by Mr. Nair and with the assistance of the judgments of the honourable Supreme Court. For all these reasons, Mr. Nair would submit that the reference be answered accordingly. Reliance is placed on several judgments of the honourable Supreme Court and this court and which are noted above.

In this reference an order was passed by this court appointing Mr. P.C. Joshi, as an amicus curiae. That order was passed on January 8, 2010 because this court noted that though the respondent is duly served, none is appearing for it. Mr. Joshi has kindly accepted the request of this court and assisted us admirably. We are thankful to him for his assistance.

Mr. Joshi has relied upon the judgment of the honourable Supreme Court in the case of Bansal Wire Industries Ltd. and Another Vs. State of U.P. and Others, and other judgments which have been referred by Mr. Nair. In addition, Mr. Joshi places reliance on the judgments of the Madras High Court in the case of I.P. Rings Limited Vs. The Tamil Nadu Taxation Special Tribunal and The State of Tamil Nadu , the Punjab and Haryana High Court in the case of State of Punjab Vs. Federal Gogul Goetze (India) Ltd., and the honourable Supreme Court in the case of M/s. Dewan Enterprises Vs. Commissioner of Sales Tax, U.P., . The attempt of Mr. Joshi is to submit that the view taken by the Tribunal is in accordance with law. There is no merit in the contentions of Mr. Nair because the Madhya Pradesh High Court as also the Division Bench of this court in the case of Raymond Limited (Sales Tax Reference No. 2 of 2003 decided on August 28, 2009) have held that singular or plural word "tool" and the words appearing thereafter in the entry would denote the items of iron and steel independently. There is no merit, according to Mr. Joshi, in the contentions of Mr. Nair that the raw material or semi-finished goods are referred to in the entry and not finished goods such as screwdrivers, saws, pickaxes, etc. Therefore, according to Mr. Joshi, any tool of iron or steel referred in the item is chargeable to tax at four per cent. No other meaning can be assigned as that would make the entry redundant and meaningless. For all these reasons, Mr. Joshi would submit that the reference be answered in favour of the assessee and against the Revenue.

With the able assistance of both counsel we have perused the reference and all annexures thereto. The entry as originally appearing in the Gazette reads thus:

"(iv) Iron and steel, that is to say,--

(ix) tool, alloy and special steels of any of the above categories."

Thus, iron and steel is the main descriptive part. Thereafter, the Legislature clarifies as to what would fall within the entry iron and steel and says that is to say from items (i) to (viii), namely, pig iron and cast iron including ingot moulds bottom plates, iron scrap, cast iron scrap, runner scrap and iron skull scrap; steel semis; skelp bars, tin bars, sheet bars, hoe-bars, sleeper bars; steel bars; steel structurals; sheets, hoops, strips and skelp; plates; discs, rings, forgings, steel castings; and then tool, alloy and special steels of any of the above categories. In Raymond Limited (Sales Tax Reference No. 2 of 2003 decided on August 28, 2009) almost identical question fell for consideration of this court and at the instance of the Revenue. Though this court had no benefit of any argument on behalf of the assessee, but the reference made at the instance of the Revenue was answered as under:

"1. Reference was made at the instance of Revenue on the following question:

Whether, under the facts and in the circumstances of the case, and true and correct interpretation of entry BI(6) of the Bombay Sales Tax Act, 1959, read with item No. (ix) of section 14 of the Central Sales Tax Act, 1956, the Tribunal is holding that the goods ''engineering files'' are the declared goods, and in allowing the set off under rule 41E of the Bombay Sales Tax Rules, 1959, for use of iron and steel in the manufacture of ''engineering files''?

The learned Tribunal after considering entry B6(ix) of the Bombay Sales Act, 1959 as also section 14(iv)(ix) of the Central Sales Tax Act, 1956 has recorded a finding that ''tool'' falls within declared goods and therefore respondent-assessee was entitled to claim set off.

At the hearing of this appeal, on behalf of the appellant-Revenue, learned counsel seeks to contend that the expression ''tool'' must be read in conjunction with ''alloy and special steel'' and therefore the conclusion arrived at by the learned Tribunal cannot be supported.

Entry (ix) read as under:

''tool, alloy and special steels of any of the above categories''. Similarly, section 14(iv)(ix) of the Central Sales Tax Act, 1956 reads as under:

''tool, alloy and special steels of any of the above categories''.

The comma after the word ''tool'' must mean that the expression is to be read independent of the words ''alloy and special steels of any of the above categories'' as all of them fall under the heading ''iron and steel''. As long as a tool is made of iron and steel it would fall within that entry including tools. It is also not possible to accept that we must apply the principle of ejusdem generis in interpreting the aforesaid entries as the word ''tool'' is independent of alloy and special steel in any of the above categories and do not take colour from each other. The argument therefore advanced on behalf of the Revenue has to be rejected.

In these circumstances, in our opinion, there is no merit in the question raised. Accordingly, reference rejected."

We have carefully read this order and we do not see how Mr. Nair urges before us that all shades and aspects of the controversy have not been noted and duly considered. His complaint is that the counsel for the State at the relevant time did not bring to the notice of this court several vital aspects of the matter nor did he advance complete submissions and arguments.

The attempt of the Revenue in this case is to get over this order by pointing out that it is not binding on us as several aspects were not noted and duly considered in it nor this court had the benefit of complete arguments and submissions.

We are afraid that the Revenue persists in such attempts and as noted repeatedly. The honourable Supreme Court in the case reported in Central Board of Dawoodi Bohra Community and Another Vs. State of Maharashtra and Another, reiterated the principle of binding precedents in the following terms:

"7. ... Per incuriam means of decision rendered by ignorance of a previous binding decision such as a decision of its own or of a court of coordinate or higher jurisdiction or in ignorance of the terms of a statute or of a rule having the force of law. A ruling making a specific reference to an earlier binding precedent may or may not be correct but cannot be said to be per incuriam..."

Thus, unless it is demonstrated that the decision of a coordinate Bench is per incuriam, we cannot refuse to follow it. More so, when same point or issue involved in this case has been considered and decided by the Bench. In the case of Director of Settlements, Andhra Pradesh and Others Vs. M.R. Apparao and Another, , the honourable Supreme Court held that a judgment of the coordinate Bench binds another and is a binding precedent. A binding precedent cannot be ignored or brushed aside on the spacious plea that better arguments could have been canvassed or something escaped the attention of the Bench while deciding the earlier case. Such niceties and attempts to get over a binding precedent have thus been repeatedly discouraged. Thus, certain aspects were not considered or the relevant provisions were not brought to this court''s Division Bench in the earlier decision is no reason to discard the views of the coordinate Bench. (see para 7, page 1606 of this judgment). We would not, therefore, be carried away by Mr. Nair''s submissions and brush aside and ignore this order. An attractive or better and fuller assistance in the later case is no ground not to follow and apply the binding precedent. If this course is permitted the rule of precedent would be rendered completely redundant or superfluous.

Even otherwise we do not find how a different conclusion than one reached by the Division Bench can be arrived at in this case. We must note that the Division Bench judgment of the Madhya Pradesh High Court apart, this court had before it a complete entry. It had also dealt with similar and identical argument that expression "tool" must be read in conjunction with alloy and special, steel, therefore, the conclusions contrary arrived at by the Tribunal cannot be supported. The entire foundation and basis of Mr. Nair''s argument is the manner of reading of the entry in question. That is dealt with in paragraph 3 of the order. Then the very argument of comma appearing after singular word "tool" would not mean that it should be read independently of other words appearing in the entry and that is an argument which has been stated and rejected as above by the Division Bench.

Now with the aid of a distinct entry the argument of Mr. Nair is that the Tribunal relied on the judgment of the Madhya Pradesh High Court in the case of National Lock Stores [1996] 101 STC 83 (MP). What we find from reading of the said judgment is that the Madhya Pradesh High Court had before it the Reference by the Commissioner of Sales Tax, Madhya Pradesh. That was on the question whether the Tribunal was right in holding that the tools, i.e., screwdrivers, saws, pickaxes, etc., are covered by the expression "tool" occurring in item (ix) of clause (iv) of section 14 of the Central Sales Tax Act, 1956 and should be, therefore, exigible to tax at four per cent, being covered by entry 1 of Part I of Schedule II of the Madhya Pradesh General Sales Tax Act, 1958. The facts have been noted in paragraph 2 and the arguments in paragraphs 3 and 4. The Madhya Pradesh High Court, thereafter, held as under (pages 85 and 86 in 101 STC):

"5. Screwdrivers, etc., cannot be said to acquire different commercial identity and are thus, not liable to be put in the category other than ''tools''. In Civil Appeal Nos. 2025 and 2026, 2873 to 2875 and 1537 of 1986 Gujarat Steel Tubes Ltd. etc. Vs. State of Kerela and others, , the apex court held that galvanished tubes are steel tubes within the meaning of section 14(iv)(xi) of the Central Sales Tax Act, 1956. Similarly, the articles, particularised in the question referred to us, are tools, and not hardware or anything else, within the meaning of section 14(iv)(ix) of the Act. The Tribunal has thus, not erred in law. The view taken by the Tribunal is manifestly in conformity with law. The words, affirmative and negative, are to be appreciated properly to ensure smooth operation of the clause.

In Marbury v. Madison [1803] 1 Crauch 137, it was observed that: ''Affirmative words are often, in their operations, negative of other objects than those affirmed, and in this case, a negative or exclusive sense must be given to them or they have no operation at all.''

Stripped to its essentials, it may be stated that the department could not tell us as to how the articles are not ''tools'' and as to what other identity the same can carry. Fiscal provision is to be understood and interpreted strictly so as not to fall foul of article 265 of the Constitution of India. We have to clear the doubts.

It is in the area of legislative ambiguities, yet not receding, that courts have to fill gaps, clear doubts and mitigate hardships. In the words of judge learned Hand, spoken in Cabell v. Markham [1945] 148 F2 d 737 at page 739, we get enough light to correct path:

''It is one of surest indexes of a mature and developed jurisprudence ... to remember that statutes always have some purpose or object to accomplish whose sympathetic and imaginative discovery is the surest guide to their meaning.''

In exercise of clearing doubts and mitigating hardships, we find that articles, as detailed, are nothing but tools within the provision of law and are thus, exigible at concessional rate.

The Government Advocate was unable to point out any infirmity in the conclusion reached by the Tribunal. We are satisfied with the correctness of the conclusion recorded by the Tribunal and do not find any error in the matter of interpretation.

As screwdrivers, saws and pickaxes do come within the definition of ''tools'', we answer the stated question in the affirmative, i.e., against the department and in favour of the assessee."

Upon careful perusal of the entry in question, we are respectfully in agreement with the view taken by the Division Bench of this court. That the Central Sales Tax Act and the Bombay Sales Tax Act have identical entry is not disputed.

What remains to be noted is the reference to the judgments in the case of Bengal Iron Corporation and another Vs. Commercial Tax Officer and others, and Vasantham Foundry Vs. Union of India and others, . In Bengal Iron Corporation, the honourable Supreme Court had to consider the question as to whether the cast iron castings manufactured by the petitioner in the case of Deccan Engineers (judgment rendered by the Division Bench of Andhra Pradesh High Court in Deccan Engineers Vs. State of Andhra Pradesh, are "cast iron" in entry (2)(i) of the Third Schedule to the Andhra Pradesh General Sales Tax Act or section 14(iv)(i) of the Central Sales Tax Act. Thus, the entry which fell for determination and consideration of the honourable Supreme Court is distinct. The honourable Supreme Court held that the cast iron is different from cast iron castings manufactured by Bengal Iron Corporation. Though Mr. Nair would read some paragraphs of the judgment of the honourable Supreme Court, but what we find and essentially is that the controversy was not identical to one before us. Secondly, the cast iron castings manufactured in that case was held not to be falling within the expression "cast iron". None can dispute or quarrel with the principle of interpretation and which has been laid down in this decision, but what matters is application of the said principle and to the facts and circumstances of each case.

Similar is the case of Vasantham Foundry Vs. Union of India and others, . There, the basic raw materials for producing cast iron are pig iron, steel scrap, iron scrap, cast iron scrap, etc., and which was the case of the appellant-Vasantham Foundry. After melting these raw materials and adding requisite quantity of carbon, silica, etc., the molten metal in the cupola furnace is poured into the moulds of different specifications to get the cast iron castings as required by the end-user. The foundry owner manufactures rough cast iron castings according to the specifications of their customers, who in their turn manufacture manhole covers, pipes, components for automobile industry, agricultural implements, etc. For this the rough castings have to undergo machining, grinding, polishing and various other processes. Therefore, whether the "cast iron" in the list of declared goods would include "cast iron castings" or not, was the issue before the honourable Supreme Court. That is how the judgment in the case of Bengal Iron Corporation and another Vs. Commercial Tax Officer and others, was referred and the observations that have been relied upon by Mr. Nair have been made.

From all this we find that an attempt is made by Mr. Nair to show that a finished product would not be covered by the expression "tool" as appearing in the subject entry and those covered are only items in the raw material form and not finished goods. For the reasons that we have noted above we have already rejected such argument.

Then, we find that reliance placed on the judgment of the honourable Supreme Court in the case of State of Tamil Nadu Vs. Pyare Lal Malhotra and Others, , would not carry the case of the Revenue any further. There is no dispute that entry No. (iv) in section 14 of the Central Sales Tax Act, 1956, as originally worded prior to it''s amendment by Amendment Act 61 of 1972, was meant to enumerate separately taxable goods and not just to illustrate what was just one taxable substance, namely, "iron and steel". Each sub-item in entry No. (iv) is a separately taxable commodity for the purpose of sales tax and each of them forms a separate species for each series of sales although they may all belong to the genus, "iron and steel". That is how the honourable Supreme Court has laid down the principle of reading the tax entry and held that the object of the Legislature is to tax the sale of each commercial commodity and not sale of substance out of which it is made. Even if we refer to this judgment in great details what we find is that applying the very principles one cannot reach a different conclusion and as desired by Mr. Nair.

Similar would be the position about the reliance placed by Mr. Nair on the judgment in the case of Bansal Wire Industries Ltd. and Another Vs. State of U.P. and Others, . In fact very paragraphs which have been extensively read by Mr. Nair before us, namely, paragraphs 16, 17, 18, 20, 22 to 31 would show that the honourable Supreme Court was not considering an identical controversy, but whether the "stainless steel wire" would fall under the category "tools, alloy and special steels of any of the above categories" as enumerated in entry (ix) of clause (iv) or under entry (xv) of the same clause (iv)? It reached the conclusion that the stainless steel wire is not so covered and in reiterating that conclusion it referred to the rule and principle of interpretation emerging from the decisions of the honourable Supreme Court including in State of Tamil Nadu Vs. Pyare Lal Malhotra and Others, . How a taxing statute or taxing provision will have to be read is too well settled and to require any reiteration and with reference to specific judgments. The application of the rule or application of principles of interpretation in each case is the governing factor.

As a result of the above discussion, we are of the opinion that the Tribunal did not commit any error in answering the first question in favour of the assessee and against the Revenue.

Once such detailed and exhaustive arguments of Mr. Nair have been noted by us we expected him not to insist on question No. 2 to be answered. However, we find that the Tribunal has allowed additional ground to be raised. The Tribunal duly considered all arguments and of both sides. The Revenue should not have faulted the Tribunal''s approach of allowing the assessee to raise the additional ground. Apart therefrom we find that the Tribunal did not commit any error or perversity in allowing such additional ground to be raised. What the Tribunal has noted is that the additional ground was raised and in relation to the periods January 1, 1988 to March 31, 1989, Financial years 1989-90 and 1990-91 covered by the Second Appeal Nos. 687, 688 and 689 of 1995 since the orders of assessment and penalties were composite one. The Second Appeal Nos. 685 and 686 of 1995 were against the penalty orders passed separately for the period January 1, 1985 to December 31, 1985. The original assessment order was never subject-matter of challenge before the lower appellate authority and that is how the Revenue objected to the inclusion or permission to raise an additional ground. However, finding that in relation to the same assessee and pertaining to the separate periods there was consensus amongst the parties and a permission was given to raise an additional ground that merely by following the course in relation to two appeals the Tribunal did not commit any error of law or perversity. Having found that the question of taxability goes to the root of the case and raises a vital issue of interpretation of the entry in question that the Tribunal permitted the additional ground to be raised. Since no prejudice has been caused as all arguments have been noted not only at the stage of appeal, but even at the stage of deciding the reference application that we are of the opinion that any larger question or controversy need not be addressed or decided. Suffice it to state that question No. 2 need not be answered in favour of the Revenue as in the given facts and circumstances the Tribunal did not commit any error of law or perversity in allowing the additional ground to be raised nor the course adopted by the Tribunal has resulted in serious prejudice leave alone miscarriage of justice.

The reference thus is answered against the Revenue and in favour of the assessee.

At this stage, Mr. Nair orally prays for grant of certificate under article 134A of the Constitution of India and for leave to appeal to the honourable Supreme Court as well. All that we have done is to apply the principles laid down in the judgments of the honourable Supreme Court to the facts of this reference, therefore, we do not find that this is a fit case for grant or issuance of such certificate. In our opinion, no question of law of general public importance and to be decided by the honourable Supreme Court arises in this reference. The prayer for grant of leave to appeal to the honourable Supreme Court and for issuance of the certificate in that behalf is refused. The reference is, accordingly, disposed of. No costs.