Hindustan Tin Works Ltd. vs Commissioner of Trade Tax

Bharati Sapru, J.—The present revision has been filed by the assessee against an order of the Tribunal dated March 15, 2004 for the assessment year 1998-99 (Central) by which the Tribunal has imposed an amount of Rs. 3,92,000 as Central sales tax on the assessee. The questions of law sought to be answered are as under:

(1) Whether only can body having been fabricated by Sahibabad unit and the same alone having been transferred from Sahibabad to Murthal where rest of manufacturing unit of tin container was completed and thereafter it was sold by Murthal unit and hence the Tribunal was not justified in treating stock transfer of Sahibabad of semi fabricated tin containers.

(2) Whether admittedly the tin container is not complete unless can body is fitted with the bottom assembly as well as top lid assembly and admittedly this process having been completed by Murthal unit in the State of Haryana where bottom manufactured tin container was completed and hence sale of tin container at Murthal unit cannot be treated as inter-State sale of tin container by Sahibabad unit. Even assuming without admitting that sale of tin container by Murthal unit after completing fabrication of tin container at Murthal be treated as inter-State sale, the assessing authority as well as the Tribunal was not justified in treating the entire stock transfer made from Sahibabad as inter-State sale even the controversy should involve before the assessing authority was confined to the quantity mentioned in the show-cause notice.

(3) Whether in view of the second proviso of rule 41(7) of the U.P. Trade Tax Rules, 1948 read with section 9(2) of the Central Sales Tax Act, 1956 and in view of various decisions of this honourable court, the Tribunal was justified in confirming entire stock transfer of semi-fabricated tin container as inter-State transaction?

(4) Whether the Tribunal was justified in completely overlooking the points referred to in the written argument and also the copy of judgments filed along with written argument for the proposition that neither the assessing authority nor the appellate authority can go beyond the question of the controversy is raised in the show-cause notice?

(5) Whether in view of the decision of the honourable Supreme Court in the case of Tata Engineering and Locomotive Co. Ltd. Vs. The Assistant Commissioner of Commercial Taxes and Another, even if stock transfer were to be treated as inter-State sale, it was incumbent upon the assessing authority as well as the Tribunal to examine each and every point instead of going in casual manner?

(6) Whether in any view of the matter the order passed by the assessing authority as well as the Tribunal treating the stock transfer of semi-fabricated body/part of tin container as inter-State sale?

The facts of the case are that the revisionist is a manufacturer of tin caps. The registered office of the assessee is at Delhi and the assessee has a factory at Industrial Area, Sahibabad, Ghaziabad, which is in the State of U.P. The assessee also has another manufacturing unit at Murthal in the State of Haryana and third unit at Barotiwala District Solan in the State of Himachal Pradesh.

The assessee is engaged in the manufacture of tin caps through the process of slitting, printing, lacquering, body blank slitting, body fabrication, ring manufacturing, lid manufacturing, top assembly and bottom assembly.

It is the case of the assessee that for the assessment year 1998-99, it has received certain job-work from Murthal unit where the can body was fabricated at Sahibabad, which was thereafter transported to Murthal and completed over there. The dispute arose with regard to this.

The assessee received a show-cause notice from the Department by which the Department alleged that in fact the assessee had indulged in a Central sales by sending goods from Sahibabad to Murthal vice-versa.

The assessee while making his reply sought to explain that the assessee had not made any Central sales but rather has made stock transfer of semi-finished goods.

The theory of stock transfer of semi-fabricated goods was rejected by the Assistant Commissioner who imposed Central sales tax by the assessment order in the year 1998-99, against which the assessee filed an appeal. The appeal too was dismissed by an order dated February 2, 2000. The assessee thereafter filed a second appeal u/s 10 of the U.P. Trade Tax Act, 1948 which too has been dismissed.

The learned counsel for the assessee has vehemently argued that even though the assessee had filed written argument stating its case with regard to semi-finished goods, the Tribunal has not considered the same and has not examined each and every transaction.

The learned counsel for the assessee has argued that each and every transaction should have been examined to see whether or not the goods which were stock transfer were finished goods or not?

In reply to the argument made by the learned counsel for the assessee, Sri B.K. Pandey, learned standing counsel has drawn the attention of this court to the orders passed by the two appellate authorities in which it is recorded that the items which were sent from Sahibabad to Murthal were cylinderical body with the top and also bottom of the tin container.

He has argued that nothing was left for manufacturing by the assessee and in fact the tin container with bottom covers were completed and finished goods. The only thing which remains to be done was that the cans were to be filled with the product of other manufacturer namely Nestle in this case on whose specification cans had been made. The Nestle product would be filled in the cans and the bottom would be fixed by the Nestle itself. Therefore nothing remained to be done in so far as the manufacturer of the tin cans was concerned.

I have heard learned counsel for both sides and have perused the orders passed by the Tribunal and I am of the opinion that the order passed by the Tribunal imposing Central sales tax on the assessee in this case is justified in the facts and circumstances of the case because the items that the assessee were transferring from Sahibabad to Murthal were not the semi finished items but rather it were the final and finished products and it could not be said that the goods have been sent to the second unit in semi finished state. In view of the above, the order passed by the Tribunal is confirmed. The revision is thus dismissed. No costs.