LexTHE STATE OF MADHYA BHARAT (NOW THE STATE OF MADHYA PRADESH) & ORS. versus HIRALAL JI
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
THE STATE OF MADHYA BHARAT (Now the STATE OF Ac. MADHYA PRADESH) & ORS. v. HIRALAL JI November 29, 1965 [K. SUBBA RAo, J. C. SHAH ANDS. M. SIKRI, JJJ Sales Tax-Madhya Bharat Sales Tax Act, Samvat 2007 (30 of 1950)-Essential Goods (Declaration and Regulation of Tax on Sales or Purchase) Act, 1952 (Central Act 52 of 1952), s. 5-Notificatimis issued under-Iron and steel exempted from 1ales tax-Iron bars, flats and Plates whether 'Iron and steel' for the purpose of exemption. The respondent as head of a joint Hindu family owned a re-rolling mill at which scrap iron locally purchased, and iron plates imported from ontside, were converted into bars, flats and plates in the Mills and there- after sold in the market. The sales tax authorities held that iron ban, fiats and plates sold by the respondent were not 'iron and steel' exempted by notification No. 58 dated October 1953 issued under the Essential Goods (Declaration and Regulation of Sales and Purchasees) Act, 1952. Jn a petition under Arts. 226 and 227 filed by the respondent challenging the said assessment the High Court decided that iron bars, flats and plates were exempted under the notification. The State appealed to this Court. B. c HELD : Goods prepared from metals other than gold and silver are made taxable by notification No. 59 whereas notification No, 58 exempts iron and steel from tax. A comparison of the baid two notifications brings out the distinction between raw.materials of iron and steel and E the goods prepared from iron and steel. While the former is exempted from. tax the latter is taxed. Therefore iron and steel used as raw .. material for manufacturing other goods are exempted from taxation. So long a~ iron and steel continue to be raw materials, they enjoy the exemption. . Scrap iron purchased by the respondent was merely re- rolled into bars, fiats and plates for convenience of sale. The raw- materials were only re-rolled to give them attractive and acceptable forms. They did not in the process lose their character as iron and ,F steel. The bars, flats and plates sold by the respondent were therefore iron and steel exempt under the notification. (754 D-G] CIVIL APPELLATE JURISDICTION: Civil Appeal No. 814 of 1964. Appeal by special leave from the judgment and order dated October 24, 1961 of the Madhya Pradesh High Court in Misc. Petition No. 125 of 1958. I. N. Shroff, for the appellants. C. B. Agarwa/a and C. P. Lal, for the respondent. G The Judgment of the Court was delivered by n Sobba Rao, J. This appeal by special leave raises the question of the intepretation of Item No. 39 of the Notification M. B. STATE v. HIRALAL (Subba Rao, J.) 753 A No. 58, dated October 24, 1953, hereinafter called the• 'Notification', issued by the Government of Madhya Bharat under the Madhya Bharat Sales Tax Act, Samvat 2007 (Act No. 30 of 1950), hereinafter called the Act. The facts are as follows : Hiralal, the respondent, is the• B manager of a joint Hindu family carrying on business in the name and style of "Messrs. Tilokchand Kalyanmal". The joint family owns a re-rolling mill situated in Indore City called the Central India Iron and Steel Company. The said family purchases scrap· iron locally and imports iron plates from outside and after con- e verting them into bars, flats and plates in the Mills sells them in the market. The respondent made a default in furnishing the returns prescribed by s. 7(i) of the Act for the period April l, 1954, to March 31, 1955. On February 27, 1956, the Sales-tax Officer, Indore, determined the taxable turnover at Rs. 2,26,000 and the sales-tax payable thereon at Rs. 8,000; and he also im- D posed a penalty of Rs. 1,000 under s. 14(1) (c) of the Act. On· the same day he issued demand notices to the respondent for the payment of the said sales-tax and the penalty. On September 10, 1956, the respondent filed a petition in the High Court of Madhya Bharat (afterwards Madhya Pradesh) under Arts. 226 and 227 of the Constitution for the issue of appropriate writs quashing. E the assessment of tax and penalty and to restrain the State from giving effect to the said orders of the Sales-tax Officer. A Divi- sion Bench of the High Court held that the iron bars, flats and. plates sold by the respondent were exempted from sales-tax under the Notification. In that view, the orders of the Sales-tax Officer were quashed. The state has filed the p
Excerpt shown. Read the full judgment & AI analysis in Lexace.