Allahabad High Court
The Commissioner Commercial Tax ... vs S/S Krishnav Engineering Ltd. ... on 1 August, 2019
Bench: Saumitra Dayal Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD
?Court No. - 1
Case :- SALES/TRADE TAX REVISION No. - 543 of 2013
Revisionist :- The Commissioner Commercial Tax U.P. Lucknow
Opposite Party :- S/S Krishnav Engineering Ltd. Ghaziabad
Counsel for Revisionist :- S.C.
Hon'ble Saumitra Dayal Singh,J.
1. The present revision has been filed by the revenue against the order of the Trade Tax Tribunal, Meerut Bench, Meerut dated 6.3.2013, passed in second appeal no. 313 of 2013 for A.Y. 2008-9 (U.P.). By that order, the Tribunal has allowed the appeal filed by the assessee and held that brake shoe castings manufactured and sold by the assessee were liable to tax @ 4% under notification entry no. 4 Schedule-II Part-A of the U.P. VAT Act, 2008 (hereinafter referred to as the U.P. Act) (as amended by Notification no. KA.NI. 2-67/XI dated 10.1.2008).
2. Heard Sri B.K. Pandey, learned Standing Counsel for revenue and; Sri Atul Gupta and Utkarsh Malviya, learned counsel for opposite party-assessee.
3. The present revision has been pressed on the following question of law:
"Whether under the facts and circumstances of the case, the Commercial Tax Tribunal was legally justified in holding that the metal brake shoe casting manufactured by the dealer is in fact metal casting and covered by notification no. 67 dated 1.1.2008 and not unclassified item liable to tax @ 12.5%?"
4. On facts, it is undisputed that the assessee manufactured and sold brake shoe castings. The revenue does not contend that the assessee had sold finished brake shoe castings. However, it is the contention of the revenue that the assessee had processed raw aluminium castings and, therefore, the same had ceased to be the metal castings. That contention of the revenue has been rejected by the Tribunal on the reasoning that an item may be treated to be unclassified only if it cannot be attributed to any taxing entry. Keeping in mind the taxing entry no.4 under Schedule-II Part-A of the U.P. Act, the Tribunal had further found that though some machining may have been done by the assessee to raw brake shoe castings, the same would continue to fall under the said taxing entry as metal castings.
5. Learned Standing Counsel would submit, inasmuch as it had been found that the assessee had not sold raw castings but processed the same and thus made them ready for use as brake shoe castings, those goods were not classified under notification entry no. 4 Schedule-II Part-A of the U.P. Act. Clearly, therefore, they were unclassified goods.
6. Learned counsel for the assessee submits, the taxing entry being "all metal castings" it does not distinguish between raw and semi-finished metal castings. It would be inconsequential to speculate as to the result of the processing done by the assessee on raw castings. He has relied on the decision of the Supreme Court in the case of Vasantham Foundry Vs. Union of India & Ors., (1995) 5 SCC 289. Also, it has been stated, in the other assessment years of the same assessee, the same goods i.e. the brake shoe castings had been taxed @ 4%. Those orders having attained finality, the rule of consistency would apply to the facts of the present case and no different conclusion could ever be drawn. He has also relied on the decision of the Supreme Court in M/s Radasoami Satsang, Saomi Bagh, Agra Vs. Commissioner of Income Tax, (1992) 1 SCC 659.
7. Having heard learned counsel for the parties and having perused the record, in the first place, the aluminium castings manufactured and sold by the assessee have been identified even by the revenue authorities as metal castings. It is an admitted case between the parties that those items were not identified as brake shoe or another item. The fact that the assessee may have done some processing on raw brake shoe castings, would be inconsequential in view of the clear language of entry no. 4 Schedule-II Part-A of the U.P. Act. That legislative entry takes within its ambit all types of metal castings whether processed or raw. So long as the commodity continued to be identified as a metal casting, the level of processing offered on those goods would be an irrelevant factor. To that extent, the ratio laid down in Vasantham Foundry (supra) is relevant. In paragraph no. 25 of that report, it has been observed as under:
"25. Therefore, in our view "cast iron casting" in its basic or rough form must be held to be 'cast iron'. But, if thereafter any machining or polishing or any other process is done to the rough cast iron casting to produce things like pipes, manhole covers or bends, these cannot be regarded as "cast iron casting" in its primary or rough form, but products made out of cast iron castings. Such products cannot be regarded as 'cast iron' and cannot be treated as "declared goods" under Section 14(iv) of the Central Sales Tax Act. This view is not in conflict with the view taken in the case of Bengal Iron Corpn. [1994 Supp (1) SCC 310 : (1993) 90 STC 47] , but it is in consonance with the decision in that case."
8. Even otherwise, no challenge has been raised to the further observation made by the Tribunal i.e. in other years, the same goods had been dealt with, as covered under the taxing entry "all metal castings". The rule of consistency would commend that in view of same question permeating through assessment years, having been decided, in favour of the assessee and it has been allowed to attain finality, that decision ought to be applied in other cases as well. That being the dictum in the case of M/s Radasoami Satsang (supra). The ratio of that decision contained in paragraph no. 16 of the report is relevant to note, which reads as below:
"16. We are aware of the fact that strictly speaking res judicata does not apply to income tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year."
9. In view of the above, the question of law (as framed above) is answered in the affirmative i.e. in favour of the assessee and against the revenue.
10. Accordingly, the revision is dismissed.
Order Date :- 1.8.2019
Prakhar
