Indian Steel Rolling Mills vs The State of Madras

Ramanujam, J.—During the assessment year 1962-63, the petitioners in this case had sold iron and steel to Messrs. Slngareni Collieries

Ltd., Andhra Pradesh, to the extent of Rs. 5,41,888.67 and to Messrs. Travancore Titanium Products Ltd., Trivandrum, to the extent of Rs.

19,134.72. The petitioners also sold to the Regional Housing Engineer, Hyderabad Housing Board, goods to an extent of Rs. 91,029.17.

As regards the sales made to the first two companies, who were registered dealers, the petitioners claimed to be taxed at the lower rate of 1 per

cent instead of the normal rate of 2 per cent applicable to declared goods. They produced C forms from the said purchasing dealers. But the C

form declarations had specified the purpose of purchase as manufacture or mining. Those C forms were held by the authorities to be defective in

the sense that the goods have not been purchased for resale and only in cases of resale, the concessional rate of tax will be available in the case of

declared goods during the assessment year in question. Admittedly, the goods purchased were for the purpose of manufacture or for mining and

not for resale. Therefore, the C form declarations which showed a purpose different from the purpose of resale cannot be availed of by the

petitioners for the purpose of getting the benefit of the concessional rate of tax. This is the view taken by the assessing authority, the Appellate

Assistant Commissioner as well as the Tribunal.

The learned counsel for the petitioners contends that once the C form declarations had been produced in respect of the inter-State sales, the

benefit of concessional rate of tax cannot be denied merely because the goods purchased have been used for a different purpose. But, we are of

the view that the purpose mentioned in the C form declarations not being for resale, the petitioners have been rightly denied the benefit of the

concessional rate of tax. During the assessment year in question, in respect of declared goods, the benefit of concessional rate of tax was available

only if inter-State purchase was for resale. We have to, therefore, uphold the view of the Tribunal on this aspect of the case.

As regards the petitioners'' sales to the Regional Housing Engineer, Hyderabad Housing Board, the petitioners had obtained D form declarations

and produced the same before the assessing authority. The D form declarations produced were on the basis that the Hyderabad Housing Board

for whom the goods were purchased was a department of the Government. On the basis of these D form declarations given by the Hyderabad

Housing Board, the petitioners claimed the concessional rate of tax. But, the authorities below held that the Hyderabad Housing Board is not a

department of the Government and, therefore, the D form declarations issued by the Housing Board are not in order and that the said forms will

not entitle the petitioners to get the benefit of concessional rate of tax. The learned counsel for the petitioners contends that as the purchaser has

given the D form declarations, no duty is cast on the petitioners to make a further verification as to whether the purchaser is really a department of

the Government and that they are well entitled to rely on the declarations made by the purchaser. But, we are not concerned on the question

whether the petitioners are justified in relying on the statement made by the Housing Board that it was a department of the Government. The

question is whether the sale to the Hyderabad State Housing Board is a sale to the Government as contemplated by Section 8(1)(a) of the Central

Sales Tax Act. It is only when the sale falls u/s 8(1)(a), the question of furnishing D form declarations u/s 8(4)(b) will arise. But, if the sale is held to

be not to a department of the Government then the application of Section 8(4)(b) will not arise. In this case, all the authorities have proceeded on

the footing that the Housing Board is not a department or a limb of the Government. Even before us, the petitioners have not placed any material to

show that the Hyderabad Housing Board is a department of the Government. We have, therefore, to accept the finding of the Tribunal that the

Housing Board is not a department of the Government and, therefore, in respect of the sales effected to it the petitioners cannot get the benefit of

concessional rate of tax. The result is all the contentions put forward by the petitioners are rejected and the tax case is dismissed with costs.

Pleader''s fee Rs. 150.