M/S DEWAN ENTERPRISES versus COMMISSIONER OF SALES TAX, U.P.

Citation: [1996] SUPP. 1 S.C.R. 703 · Decided: 24-04-1996 · Supreme Court of India · Bench: J.S. VERMA · Disposal: Appeal(s) allowed

Judgment (excerpt)

MIS DEWAN ENTERPRISES 
v. 
COMMISSIONER OF SALES TAX, U.P. 
APRIL 24, 1996 
[J.S. VERMA, B.N. KIRPAL AND G.B. PATTANAIK, JJ.J 
Central Sales Tax Act, 1956: Sections 14(iv)(xiv) and !~Declared 
goods-Levy of Sales Tia-Whether cycle rim a declared good within the 
meaning section 14(IV)(XIV)-Held: Yes, Cycle-rim is part of wheel and thus 
a declared good. 
A 
B 
c 
The appellant carried on the business of manufacturing and sale of 
cycle-rims. The assessing officer taxed it @ 8% treating the rims as cycle 
parts. Though the appellant contended before the Assessing officer that 
cycle rims were declared goods under Section 14(iv) (xiv) of the Central D 
Sales Tax Act and according to Section 15 of the said Act, it was liable to be 
taxed at the rate which could not exceed 4% of the sale or purchase price 
thereof. The assessee's appeal to the Depnty Commissioner was allowed. 
The respondent then filed an appeal before the Tribunal which restored the 
decision of the Assessing officer. The appellant then went in revision to the 
High Conrt. The High Court held that cycle-rim was not commercially E 
known as 'wheel' and, therefore, could be taxed nnder the U.P. Sales Tax Act 
@ 8% and it was not a declared good. 
Being aggrieved, the appellant company preferred an appeal before 
this Court. 
Allowing the appeal, this court 
HELD : 1.1. The appellant is only entitled to be taxed @ 4% on the 
sale - price of the cycle-rims. According to section 15 of the Central Sales 
F 
Tax Act, in respect of the declared goods which are enumerated in section G 
14 of the Act, the tax on their sale or purchase inside the State cannot 
exceed 4%. [706-G; 705-G] 
1.2. Section 14 of the Act specifies the goods which are of special 
importapce in inter-state trade or commerce. Sub-section (IV) enumerates, 
in different sub-clauses, the different types of iron and sic.el products which H 
703 
704 
SUPREME COURT REPORTS [1996] SUPP. 1 S.C.R. 
A 
are declared goods. Sub-clause (XIV) specifies 'wheels, tyres, axles and wheel 
sets". The rim of a cycle, manufactured by the appellant, is admittedly a part 
of a wheel. Without a rim the other parts cannot be regarded as a wheel. 
Moreover the entry has to be read as a whole and the meaning also assigned 
to the words 'wheel sets" in the said entry and a rim which is admittedly a 
B 
c 
D 
E 
F 
part of a wheel set would fall in the said entry. [705-G-H; 706-F] 
1.3. Applyi.ig the test of common parlance, a rim which is admitteldy 
round and an essential part of the wheel of the cycle would come within the 
said entry (XIV) and being a declared good the same cannot be taxed at the 
rate in excess of 4% [706-F] 
Assistant Commercial Taxes Officerv.Ashok Tyres, (1988) 68STC123, 
approved. 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 900-909 
of 1994. 
From the Judgment and Order dated 7.1.94 of the Allahabad High 
Court in S.T.R. Nos. 1822-31 of 1993. 
Raja Ram Agarwal, Dhruv Agarwal, Sunil Kr. Jain and J.K. Bhatia 
for the Appellant. 
T.N. Singh for the Respondent. 
The Judgment of the Court was delivered by 
KIRP AL, J. The appellant carries on the business of manufacturing 
and sale of rims of cycles. The Assessing Officer, under the Uttar Pradesh 
Sales Tax Act, made provisional assessment treating the rims as cycle parts 
and taxed the same under the said Act @ 8%. Before the Assessing 
Officer, the contention of the appellant was that cycle rims were declared 
goods under clause (xiv) of sub-section (iv) of Section 14 of the Central 
Sales Tax Act (hereinafter referred to as 'the Act') and according to 
G Section 15 of the Act the tax payable under the said law in respect of any 
sale or purchase of declared goods inside the State could not exceed 4% 
of the sale or purchase price thereof and such tax shall not be levied at 
more than one stage. The Assessing Officer, however, made provisional 
assessments under the U.P. Sales Tax Act treating these rims as cycle parts 
@ 8% separately for each month from June, 1990 to March, 1991. The 
H appellant then 1iled appeals before the Deputy Commissioner (Appeals) 
DEWAN ENTERPRISES. v. COMMR. OF S.T. [KJRPAL, J.] 
705 
who accepted the appellant's contention and came to the conclusion that A 
the rims manufactured by the appellant could not be taxed at the rate 
higher than 4%. The respondent then filed appeal to the Tribunal which 
reversed the decision of the Deputy Commissioner (Appeals) and restored 
the decision of the Assessing Officer. 
The

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