UNION OF INDIA & ORS. versus TATA IRON & STEEL CO. LTD.

Citation: [1975] 3 S.C.R. 418 · Decided: 31-01-1975 · Supreme Court of India · Bench: A.N. RAY · Disposal: Dismissed

Judgment (excerpt)

418 
CNION OF INDIA & ORS. 
v. 
TATA IRON & STEEL CO. LTD. 
January 31, 1975 
[A. N. RAY, C.J., H. R. !(HANNA AND P. K. GOSWAMI, JJ.] 
Constitution of India, 1950 Art. 226, 227-Powus of High Court under 
article 226 & 227 to interfe.re with classification ef a product by taxing a111lwrities. 
Central Excise Act, 1944-Ske/p and strip necessity for idwtifiable rest in 
fiscal statutes, 
The respondent manufactures hot rolled finished steel products in rectangular 
A 
B 
,cross-section of thicknes:; varying between 16.2 mm and 311.2 mm a1_1d rolled 
C 
in coils (hereinafter reforred to as the Product). The respondent describes the 
product as Strip whereas the appellant classifies it as a Skelp. Skelp is subject 
te higher excise duty than Strip. 
The Assistant Collector, Central Excise treated 
the product as Skelp. 
On appeal to the Collector of Central Excise, he confirmed 
it and in revision the Central Government also approved. 
The respondent filed a Writ Petition in the High Court. The High Court 
ac·~epted the contention of the respondent. 
On appeal by Special Leave the 
appellant contended befqre this Court : (i) That it is primarily for the Taxing 
D 
Authorities to determine the head or nature under which any particular wmmo-
dity fell. (ii) The Court can interfere with the decision only if it is pc:rverse. 
If there were two constructions possible and if the Taxing Authority accepts one 
of them the Court cannot interfere. 
The respondent submitted·. (i) Assessment without application of an identi-
fiable test is p!:rverse :md arbitrary. (ii) In the present .case. there was no iden-
tifiable test before the Taxing Authorities. There is no difference between Skelp 
E 
anti Strip. 
Dismissing the appeal, 
Hdd : There are large number of definitions out of which one can be 
picked up to satisfy th1: definition of Skelp according to some authority and 
another definition to fit in with the concept of strip according to another ::mtho-
rity. 
Since there is no statutory definition for Skelp and Strip, different tests 
hfbve been resorted to by the different authorities. The question arises whether 
the High Court wa·;; right in interfering with the orders under Art. 226 of the 
F 
Constitu.tion. It is not for this Court to come to. the condusion on fact1. 
The 
absence of any identifiable standard natmally gives rise to the scope for arbitrarv 
assessment at the hands of different authorities. It is not possible to hold that 
the High Court has gone wrong in granting the reliefs prayed for. 
(4220-F; 
423C] 
CIVIL APPELLATE JURISDICTION: 
Civil Appeal No. 
1527 of 
1~~ 
G 
Appeal by Special Leave from the Judgment & Odrer dated the 
14th December, 1973 of the Delhi High Court in Civil Writ No. 1678 
of 1967. 
· 
F. S. Nariman, Addi. Sol. Gen. of India, D. N. Mukherji~e and 
R. N. Sahthey, for tllle Appellants. 
H 
· N. A. Palkhiala, Ravinder Narain, I. B. Dadachanji, 0. C. Mathur, 
. K. J. John and K. R. lhaveri, for the Respondent. 
· · 
A 
B 
c 
D 
E· 
F 
G 
H 
II' UNION v. TATA IRON & STEEL co. (Goswami, J.) 
419 
The Judgment of the Court was delivered .by-
GoswAMI, J. This appeal is by special leave from the judgment 
of the 1Jelhi High Court m a writ app11cauon there under amc!e 226 
of the (.;onstitut1on. 
The respondent manufactures 
various · other 
items hot rolled finished steel products in rectangular cross-section of 
thickness varying between 1.7 mm and 6.55 mm and width varying 
between 16.2 mm and 311.2 mm and rolled in coils which it supplies 
to the Indian Tube Company Limited at Jamshed-pur for making tubes 
and also to others. Tim article is subjected to Central Excise Duty 
under the Central Excises and Salt Act, 1944 (hereinafter called the 
Act). The dispute between the respondent anld the appellants is that 
while the former describes the said manufactureld pi:oduct as 
strip 
the appellants .classify it as skelp. 
This difference in classifying the 
product differently results in fiscal misfortune to the respondent since 
skelp is subjected to a higher Central Excise Duty than strip. 
It may be stated that 'during the period from April 24, 1962 to 
February 28, 1964, the respondent described its product as skelp and 
it was subjected then to a lower rate of duty. 
From February 19, 
1964, the respondent chimed that the aforesaid product be classified 
as strip since there hat! been a levy of higher duty /for skelp. The 
Assistant Collector, Central Excise, Jamshedpur, whb is the primary 

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