fish plate bars, beating plate bars, crossing sleeper bars, fish plates, bearing plates, crossing sleepers and pressed steel sleepers, railsheavy and light crane rails.
The High Court was of the further view that there is numberdiscrimina tion in the rate of tax between the imported items and the local items of finished goods of iron steel as such and that the variation in the quantum of tax is on account of the scheme of taxation working diffe rently on different dealers, those who import raw material and manufacture and those who locally purchase and manufac ture and hence such an effect is only indirect result and number having direct or immediate impact.
wheels, tyres axles and wheel sets.
By Karnataka act 13 of 1982 Explanation II was added to item 2 of the IV Schedule with retrospective effect from 1.10.
2 are manufactured and sold, numbertax shall be leviable on the sale of the said steel semis or the re rolled products as the case may be.
This appeal has been filed against the said judgment of the High Court.
1978 and that Explana tion reads as follows Explanation 11 Where tax has been paid in respect of the sale or purchase of iron scrap, cast iron scrap, runner scrap and iron skull scrap referred to in entry i of serial number 2 or in respect of steel melting scrap in all forms including steel skull turnings and borings referred to in entry x of serial number 2 and out of the said scrap, steel semis ingots, slabs, blooms and billets of all qualities, shapes and sizes referred to.
In that view the High Court dismissed the writ petition and gave liberty to the appellant to file objections before the Commissioner of Commercial Taxes for dealing with questions on merits.
The appellant filed the writ petition praying for the issue of a writ certiorari to quash the show cause numberice issued by the respondent under section 22 A of the Act challenging the companystitutional validity of section 5 4 of the Act in so far as it pertains to item 2 of Sched ule IV to the Act read with Explanation II thereof in re spect of its application for the period prior to 1.4.
wire rods and wires rolled, drawn, galvanised, alumi nised, tinned or companyted such as by Copper.
1957 and to be effective tilt 31.3.
defectives, rejects, cuttings or end pieces of any of the above categories.
These manufactured goods were sold mostly within the State.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
m entry ii of serial number 2 are manufactured and sold or steel semis ingots, slabs, blooms and billets of all qualities, shapes and sizes referred to in entry ii of serial number 2 and out of the said steel semis any re rolled products of iron and steel referred to in anyone or more of the entries at iii , v , vii and xv serial No.
From the Judgment and Order dated 10.6.1988 of the Karnataka High Court in W.P. Nos.
The respondent Commissioner of Commercial Taxes, Bangalore initiated proceedings under section 22 A of the Act for revising the order of the Deputy Commissioner on the ground that the assessee had been allowed exemption in respect of the turn over of manufactured goods without verifying as to whether the inputs iron scrap nag suffered taxes and that Explanation II to Schedule IV of the Act was applicable or number.
Sen, H. Raghvendra Rao and Vineet Kumar for the Appellant.
Provided that the dealer claiming exemption of tax under this explanation furnished before the assessing au thority companycerned proof of levy and payment of tax by the previous or earliest of successive dealers on the said scrap or steel semis used in the manufacture of the steel semis re rolled products, as the case may be.
The High Court was of the view that the provision pro viding for number levying tax, if at an earlier stage tax has been paid, is only in the nature of exemption and the exemp tion arises only on proof that the tax has been paid at an earlier stage on the goods out of which the goods in ques tion were manufactured, that there is nexus between the finished goods and the raw material used for manufacturing the same that it is number companyrect to state that the tax is number payable on the finished goods manufactured out of local raw material but the discrimination if at all would arise only in the quantum of tax payable, for the tax on finished goods will be definitely higher than on the raw material.
In respect of the Assessment Years 1972 73 to 1974 75, accepting the companytentions of the assessee that the goods sold were manufactured out of tax suffered iron scrap, the Commercial Tax Officer exempted the sales turn over of the manufactured goods.
The Judgment of the Court was delivered by RAMASWAMI, J. Special leave granted.
R. Ramasesh for the Respondent.
The appellant hereinafter referred to the assessee purchases iron scrap from dealers inside and outside the State of Karnataka for the purpose of manufacturing iron ingots, steel rounds and tot steel.
The appellant is a registered dealer under the Karnataka Sales Tax Act hereinafter called the Act .
14255 to 14257 of 1983.
