BENGAL IRON CORPORATION AND ANR. versus COMMERCIAL TAX OFFICER AND ORS.

Citation: [1993] 3 S.C.R. 433 · Decided: 27-04-1993 · Supreme Court of India · Bench: B.P. JEEVAN REDDY

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Judgment (excerpt)

BENGAL IRON CORPORATION AND ANR. 
v. 
COMMERCIAL TAX OFFIC£R AND ORS. 
APRIL 27, 1993 
[B.P.JEEVANREDDYANDN. VENKATACHALA,JJ.] 
Andhra Pradesh General Sales Tax Act, 1957: 
Sub item (i) of Item No. 2 of the Third Schedule-Whether includes cast iron 
castings. 
Interpretative circulars issued by Gove mmemon statutOf)' provisions-1.egal 
effect of if in derogation of the provisions of the Act. 
Section 6 Qf..Andhra Pradesh General Sales Tax Act, 1957 provides a 
single poiot iax @ 4 % ~n declared goods, mentioned in the Third Schedule to 
A 
B 
c 
D 
that Act. Item (2) of the Third Schedule describes the articles made oflron & 
steel which fall in the category of 'declared goods'; sub-item (i) of Item (2) 
pertains to "pig iron and cast iron including ingot moulds, bottom plates, iron 
scrap, cast iron scrap, runner scrap and iron skill scrap". 'Cast iron' is 
defined in the Concise Oxford Dictionary as "a hard alloy ofiron, carbon and 
silicon cast in a mould". On February 28, 1977 the Department of Revenue & 
Banking (Revenue Wing) Government orfndia issued a letter to all Finance/ 
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Revenue Secretaries of all State Governments and Union Territories, ex-
plaining the term 'Castifon' mentioned in sectioq,14 (iv) (i) of the Central 
Sales Tax Act 1956. This letter said to have been issued in consultation with 
the Directorate General of Techinical Development, __ Chi~fChemist and the 
Ministry of Law, Justice & Company Affairs; extended the scope of the 
expression 'cast iron' to "cover 'cast iron casting' also". 
Based on similar clarifications, the Department of Revenue (S) Depart-
ment of the Government of Andhra Pra~esh issued a clariticatory order 
under s. 42(2) of the Act vide GOMs No. 383 dated April 17, 1985 extending 
the scope of the expression 'cast iron' to include "cast iron castings". This 
order was also publis~e~ in the State's official Gazette. Section 42 (2) of A.P. 
General Sales Tax A ct empowers the State Gove.rnment to make, by an order, 
such provisions as appear to them necessary~ expedient to remove difficulty 
in the implementation of this Act, provided that these are not inconsistent with 
the provisions of the Act. 
The appellant manufactures and sells products like cast iron pipes, man-
433 
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G 
H 
434 
SUPREME COURT REPORTS 
[1993) 3 S.C.R. 
A 
hole covers, etc. He claims that read with the above clarificatory orders, he is 
liable to pay only 4% sales Tax under Section 6 of the A.P. General Sales Tax 
Act. But, for the assessment year 1989-90 the Commercial Tax Officer 
(C.T.O.) Nar3yanaguda Circle, Hyderabad levied Sales ... ,l~x on the said 
products at the rate applicable to general goods. The C.T .0. having overruled 
. the appellant's contentions, the. latter appealed to the Appellate Deputy 
B 
Commissioner. During the pendency of appeal a notice was issued to the 
appellant calling upon him to pay the tax assessed, since no stay has been 
granted in appeal. Against this notice the appellant fded a writ petition No. 
9315 of 1992 !n the High Court of Andhra Pradesh. The Division Bench of the 
High Court rejected the appellant's main contention that his products were 
C covered by Item (2) (i)oftheThirdScheduletotheA.P. General Sales Tax Act, 
and dismissed the writ petition. Vide Civil Appeal No. 4474of1992 (with Writ 
Petition(Civil) No. 763 of1992). The appellant questions before this Court the 
above view of the High Court. 
Rejecting the appellant's contentiom and upholding the judgment and 
D order of the High Court, this Court, 
HELD: Law is what is declared by this Court and the HighCourt. An 
executive authority can, at best, only opine its own understanding of the 
statute; such opinion is not binding upon the quasi-judicial functioning of the 
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authorities under the Act. (444-B) 
Sanjeev_ Coke Manufacturing Company v. Mis Bharat Cooking Coal lid. 
and another, AIR 1983 SC 239, referred to. 
The Government cannot use the powers, conferred by section 42 (2) of 
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the A.P. General Sales Tax Act, to dispense with a levy created by the Act. 
(444D) 
G 
The Van Nostrand's Scientific Encyclopaedia treats 'cast iron' 'and 
'cast-iron' (with a hyphen) as two different words. The Act speaks of 'cast 
iron' (that is without a hyphen between the two words) (437-G-H) 
Hence, the expression 'cast iron' in Item (2) (i) of A.P. General Sales Tax 
Act does notinclude the products cast- iron pipes, man-hole covers, bends etc. 
(437-F) 
Deccan Engineers v. Scace of Andhra Pradeslt, 1

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