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CASE NO.: Appeal (civil)  2789 of 2002

PETITIONER: M/s Kalidas Sheet Metal Industries P. Ltd

RESPONDENT: State of Kerala

DATE OF JUDGMENT: 28/02/2008

BENCH: ASHOK BHAN & J.M. PANCHAL

JUDGMENT: J U D G M E N T  

CIVIL APPEAL NO.2789 OF 2002 WITH CIVIL APPEAL NO.4158 OF 2003

J.M. PANCHAL, J.                  1.               These appeals are directed against  Judgments  rendered by High Court of Kerala at Ernakulam in Tax  Revision Case No. 467 of 2000 and 10 of 2001 by which the  view taken by the Assistant Commissioner (Assessment) Sales- Tax Office Cochin and confirmed by Additional Deputy-  Commissioner (Appeals) II, as well as The Kerala Sales-Tax  Appellate Tribunal that the Copper Sheets and Brass Sheets in  which the appellant deals fall within the ambit of Entries No.  116A and 116D which provide tax at the rate of 8% on the   total turnover, of Copper and Brass respectively, is upheld.               

2.              The appellant company is a dealer registered under  the provisions  of the Kerala General Sales-Tax Act, 1963 (the  ’Act’ for short).  It inter-alia deals in Copper Sheets and Brass  Sheets.  While completing the assessment for assessment  years 1984-85 and 1985-86, the Assessing Officer assessed  the turnover of Copper Sheets and Brass Sheets at the rate of  8% holding that the same are covered by Entries Nos. 116A  and 116D of the Schedule I to the Act which provide tax on  turnover of Copper and Brass respectively.  The Assessing  Authority rejected the claim of the appellant that copper  sheets and brass sheets are unclassified items taxable at the  rate of 5%.  In appeals, the Deputy-Commissioner (Appeals)  confirmed the rate of tax in respect of those items.  Feeling  aggrieved, the appellant filed second appeals before the Kerala  Sales-Tax Appellate Tribunal.  The Tribunal dismissed the  appeals upholding the view taken by the Assessing Officer and  the Appellate Authority.  Thereupon the appellant invoked the  revisional jurisdiction of the High Court by filing T.R.C. No.467  of 2000 and 10 of 2001.  The High Court has dismissed the  same by giving rise to the instant appeals.

3.              This Court has heard the learned counsel for the  parties at length and in great detail.  This Court has also  considered the documents forming part of the instant appeal.

4.              The common contention of the appellant in both the  appeals is that Entries No. 116A and 116D take within their

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sweep only virgin copper and brass in solid form but not  Copper Sheets and Brass Sheets and therefore tax at the rate  of 8% on the turnover, could not have been levied.

5.              In order to determine the question posed for  consideration of this Court, it would be advantageous to refer  to the entries in question.  Aluminium, Tin, Copper, Brass etc.  are classified under the general head ’Non-ferrous metals’  which comprises Entries 115 to 116G.  The relevant Entries  read as under:-

       "Non-Ferrous metals 115.    Aluminium, aluminium alloys               At the point of                    and all articles made of aluminium     first sale in                  or/and aluminium alloys.                   the State by a dealer who  is liable to  tax under   Section 5.                        6

   116.    Tin including tin sheets and                tin plates                                                       do.          8      

    116A.  Copper                                                At the point of  first sale in  the State by a  dealer who is  liable to tax  under Section  5.                 8

    116B.   Zinc    At the point of  first sale in  the State by a  dealer who is  liable to tax  under Section  5.                 8

116C.  Manganese                do.         8  

116D.  Brass            do.        8

116E.  Bronze           do.        8

116F.   Magnesium               do.          8

116G.  Forrosilicon     do.       8’’              

6.      A bare perusal of the above quoted Entries makes it clear  that Entry 116A deals with copper whereas Entry 116D deals  with Brass.   The short question which arises for determination  of this Court is whether the Copper Sheets and Brass Sheets

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would fall under the Entry 116A and 116D respectively.  There  is no manner of doubt that Copper and Brass are metals.  In  ordinary temperature and pressure these metals occur in solid  form.  The fact that commercially, these metals are produced in  rolling mills in the form of sheets, circles, ingots, strips or rods  is not in dispute.  It is also not in dispute that copper and brass  being metals in solid form, are available in the market in one of  the above forms only.   Therefore, the argument of the appellant  that the words ’copper’ and ’brass’ occurring in Entry 116A and  116D would not take within its sweep Copper Sheets and Brass  Sheets, cannot be accepted.

7.               From the record of the case, it is evident that the  appellant had relied upon Government Order dated August 4,  1982 to contend that Copper, Brass and Zinc Sheets, circles,  ingots, flats and rods were treated as unclassified items and  therefore would not fall within Entry 116A and 116D.  On  perusal of the said Order this Court is of the opinion that the  clarification made by the State Government related to the  position prior to 01-04-84.  This clarification was with reference  to Entry No. 121 which dealt with metallic products and did not  relate to copper and brass sheets.  Schedule I to the Act was  amended by Finance Act, 1984 and along with other entries,  Entries No. 116A and 116D were introduced with effect from  01-04-84 to bring in metals like copper and brass.  In fact, the  clarification made by the Government weakens the case of the  appellant.  The clarification made by the Government would go  to show that Copper and Brass Sheets, circles, ingots etc. are  not Copper or Brass products.  If these items are not Copper or  Brass products the same will have to be regarded as Copper  and Brass metals falling within the ambit of Entry No. 116A  and 116D.

8.              The reliance placed by the learned counsel for the  appellant on the decision of the Supreme Court in Hindustan  Aluminium Corporation Ltd. Vs. State of Uttar Pradesh and  Anr. (1981) 3 SCC 578  to contend that Copper Sheets and  Brass Sheets are distinct commercial items from Copper and  Brass and, therefore, would not fall under Entries 116A and  116D, is misplaced.  In the said case the appellant was carrying  on the business of manufacturing and dealing in Aluminium  metal as well as various aluminium products.  The State  Government had issued several Notifications from time to time  which indicated that the expression ’Metal’ had been generally  employed to refer to the matter in its primary sense i.e. the  metal in the form in which it is marketable as a primary  commodity.  In these circumstances, the subsequent forms  evolved from the primary form and consisting distinct  commodities marketable were regarded as new commercial  commodities.  As observed earlier Copper and Brass metals are  produced in rolling mills in the form of sheets, circles, ingots,  strips or rods and are available in the market in one of the  above forms only as the metals are in solid from.  Therefore, the  principle laid down by the Supreme Court in Hindustan  Aluminium Corporation Ltd. (Supra) cannot be made  applicable to the facts of the instant case.  This Court notices,  that in the State of M.B. vs. Hiralal (1966) 2 SCR 752 this  Court held that scrap iron when put through the process of re- rolling to produce attractive and acceptable forms of iron and  steel in the shape of bars, flats and plates, must be regarded as  continuing to be "iron and steel’’ for the purpose of the  notificatiosn issued under the Madhya Bharat Sales Tax Act.   9.            Having regard to the nature of evidence produced  before the Assessing Authority in both the cases, the Court is

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of the opinion that the Authorities below as well as the High  Court were justified in concluding that Copper Sheets and  Brass Sheets in which the appellant deals would fall within  the scope of Entries No. 116A and 116D liable to be taxed at  the rate of 8% of the turnover.

10.     No case is made out by the appellant to interfere with  the view taken by the High Court and therefore the appeals  must fail.

11.             Therefore, the appeals fail and are dismissed.  There  shall be no order as to cost.