TELANGANA STEEL INDUSTRIES AND ORS. versus STATE OF ANDHRA PRADESH AND ORS.

Citation: [1994] 2 S.C.R. 324 · Decided: 04-03-1994 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
B 
TELANGANA STEEL INDUSTRIES AND ORS. 
v. 
STATE OF ANDHRA PRADESH AND ORS. 
MARCH 4, 1994 
[B.P. JEEVAN REDDY AND B.L. HANSARIA, JJ.) 
Central Sales Tax Act, 1956-Section 14(iv )(xv )-Wire rods and iron 
wires-lron wires, held cannot be treated as a separate taxable commodity 
I 
from wire rods out of whic:h they are made since they are clubbed together in 
\~ 
C the same sub item-Hence liable to single-point tax, in view of Section 15. 
Practice and Procedur~~ssessee left free to work out 
remedies under Section 33B of the A.P. General Saks Tax Act, 1957. 
The question arising In the present appeals by special leave at the 
D instance or the assessees Is whether iron wires are exigible to sales tax whtn 
the wire rods l"rom which they are produced have already been subjected 
to sales tax; Ir they are one taxable commodity, they would be liable to 
single point tax only in view or Section 15 of the Central Sales Tax Act, 
1956. 
E 
Allowing thz appeals, this Court 
HELD: The present cases concern a grey area viz. when a new 
commercial commodity comes into existence following processing or 
manufacturing undergone by the parent object, which serves as a raw 
F material for the end producL This assumes Importance when a law taxes 
sale or goods. To find out whether particular goods are exlglble to sales 
tax or not despite the raw material having been taxed earlier, the test 
evolved Is whether a new commercial commodity has come Into existence. 
The decided cases Indicate the complexity of the concept of a different 
G commercial product coming Into existence because of manufacturing 
process undertaken. Therefore the present controversy is not being 
decided by trying to answer the question whether a new commercial 
commodity has come into existence. [326-C, DJ 
; 
Tungabhadra Industries Limited v. Commercial Tax Officer, 11 STC 
<l,t, 
H 827; Hindustan Aluminium Corporation Ltd. v. State of Uuar Pradesh, (1982) 
324 
\ 
TELANGANASTEELINDUS. v. STATE 
325 
1 SCR ll9; Deputy Commissioner of Sales Tex v. Pio FooiPackers, 26 STC A 
' 
·6Z;A/ladi Venkatesurlu v. State of A.P., 41STA384, Ganesh Trading Co. v. 
'1 
State of Haryana, 32 STC 623; Babu Ram Jagdish Chemical Co. v. State of 
Punjab, 44 STC 139; State of Kamataka v. Raghuram Shetty, 41 STC 369; 
Modem Candle Woria v. Commissioner of Taxes, Assam, 71 STC 362 and 
Rajasthan Roller Flour Mills Assn. v. State of Rajasthan, JT (1993) 6 SC 138, B 
mered to. 
2. Wire rods and wires have been mentioned in one sub item in 
section 14(1v)(xv) of the Central Sales Tax, 1956. The sub item being what 
j 
It Is, wires were thought as an integral part of rods and not distinct from 
rods. This shows that the legislature did not want wires, even if the same c 
be a separate commercial commodity, to be taken as a commodity different 
from rods for the purpose of permitting imposition of sales tax once again 
on wires despite rods having been subjected to sales tax. Indeed, the two 
goods • rods and wires - are so closely knit in the sub item that any 
separation of these does not seem permissible. [331-A-D) 
D 
Stale of Tamil Nadu v. Pyare Lal, (1976) 3 SCR 168, relied on. 
; 
Rajasthan Rolling Flour Mills Assn. v. State of Rajasthan, JT (1993) 5 
~ 
SC 138, distinguished. 
3. It Is therefore concluded that Iron wires cannot be taken as a E 
separate taxable commodity and If wire rods which were purchased by the 
appellants had sulrered sales tax, the same could not be realised from the 
sale ohrlres. (332-C] 
4. As far as the prayer for refund of the amounts recovered from the 
assessees Is coneerned, the appellants are left to work out their remedies F 
~ 
under section 33-B of the A.P. General Sales Tax Act, 1957. (332-FJ 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 68 of 1986 
etc. etc. 
G 
From the Judgment and Order dated 25.3.85 of the Andhra Pradesh 
High Court in W.P. No. 1177 of 1985. 
V.M:Tarkunde, M.L. Lahoty, Ms. Shipra Khazanchi, Anip Sachthey, 
. ,.,,-.,. 
Mrs. Ruby Singh Ahuja, P.K. Mullick, Mrs. M. Karanjawala and T.V.S . 
Narasimhacliari for the appearing Parties. 
H 
326 
SUPREME COURT REPORTS 
[1994] 2 S.C.R. 
A 
The Judgment of the Court was delivered by 
HANSARIA, J. Leave granted. 
1. Law has some bright patches as well as some grey areas. Some 
areas remain grey despite best efforts to illuminate them by enlightened 
B judgments, as they get engulfed in darkness or become part of two light 
zone either because of typical climatic condition or ch
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