Appeal No 104NT of 1979
From the Judgment and Order dated 3101978 of the Punjab and Haryana High Court in 1
Reference No 60 of 1974
191 WITH Civil Appeal Nos 1801 to 180489  6254 NT90 Dr VGauri Shankar SRajappa Ms A Subhashini and Manoj Arora for the Appellants
TARamaehandran and Ms Janki Ramachandran for the Respond ents
The Judgement of the Court was delivered by RANGANATHAN J These appeals involve a common question and hence can be disposed of by a common order
The respond ent assessees are steel rolling mills engaged in the manu facture of MS Mild Steel rods bars or rounds
The question for consideration is whether they are entitled to a higher rate of development rebate specified in s331 b B ia and to relief under s80 I as it stood at the relevant time of the Income tax Act 1961
The answer to this question entirely turns on whether the assessees are engaged in the manufacture or production of any one or more of the articles or things specified in the relevant Schedule to the Act
They claim that the articles manufactured by them fail under item 1 of the list of articles and things set out in the relevant Schedule which reads Iron and steel Metal ferro alloys and special steels
This contention was rejected by Income Tax Officer but has been accepted by the Appellate Assistant Commissioner the Tribunal and the High Court
Hence these appeals by the Revenue
It has been brought to our notice that there is a dif ference of judicial opinion on this issue among the High Courts
The Calcutta High court in Indian Steel and Wire Products Ltd vs Commissioner of Income Tax  and the Allahabad High Court in Commissioner of Income Tax vs Kay Charan Pvt Ltd have answered the question in the negative and against the assessee
On the other hand the Kerala High Court in CI Tv
Mittal Steel Re rolling and Allied Industries 1  Ltd and CIT vs West India Steel Co Ltd  FB
The Madras High Court in the judgment under appeal reported as Addl
Commissioner of Income tax v Trich Steel Rollling Mills Ltd  the Punjab  Haryana High Court in CIT vs Krishna Copper and Steel Rolling Mills 1979 119 ITR 256 hereunder appeal CITv
Ludhiana Steel Rolling Mills  and the Allahabad High Court in Singh Engineering Works Pvt Ltd vs CIT have taken a view in favour of the assessee
This controversy needs to be resolved
192 It may be useful at this stage to refer to three decisions of this Court the decisions or observations in which have influenced the High court
1 The first of these is State of Madhya Bharat vs Hiralal 1966 17 STC 313
This case arose under the Madhya Bharat Sales Tax Act
Under section 5 of the said Act two notifications had been issued
The first notifica tion exempted from sales tax certain listed goods one of which was iron and steel while the second notification specified the rates and stages lot levy of sales tax on a number of articles one of which wasgoods prepared from any metal other than gold and silver
Hiralal who owned a re rolling mill purchased scrap iron locally and imported iron plates from outside and after converting them into bars flats and plates in his mills sold them in the market
He claimed exemption under the first of the above notifications
This claim was upheld by this Court The judgment of the Court is a short one the relevant paragraph of which reads as follows Learned cournsel for the State contends that the expression iron and steel means iron and steel in the original condition and not iron and steel in the shape of bars flats and plates
In our view this contention is not sound
A comparison of the said two Notifica tions brings out the distinction between raw materials of iron and steel and 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 as iron and steel continue to be raw materials they enjoy the exemption
Scrap iron purchased by the re spondent was merely re rolled into bars flats and plates
They were processed for conven ience of sale
The raw material were only re rolled to give them attractive and acceptable forms
They did not in the process lose their character as iron and steel
The dealer sold iron and steel in the shape of bars flats and plates and the customer purchased iron and steel in that shape
We therefore hold that the bars flats and plates sold by the assessee are iron and steel exempted under the Notification
The conclusion arrived at by the High Court is correct 2 The second decision referred to is Devidass Gopal Krishnan vs State of Punjab 1967 20 STC 430
Here one batch of appellants before the Court carried on business in rolling steel
They purchased steel scrap and steel ingots and converted them into rolled steel sections
They 193 contended that the levy of a purchase tax on the steel scrap and ingots side by side with a sales tax on the rolled steel sections constituted double taxation of the same commodity contrary to the provision of section 15 of the 
This contention was rejected
It was held that the process by which the steel scrap or ingot lost its identity and became rolled steel sections was a process of manufacture and that since the goods purchased and those sold were different no question of double taxation arose 3 The third decision Hindustan Aluminium Corporation Ltd vs State of UP 1981 48 STC 411 involved the interpretation of certain notifications issued under section 3A2 of the UP Sales Tax Act 1948
The two notifications with which the Court was concerned prescribed rates of tax at which certain goods were taxable
item no6 in the notification of 1973 described the goods as All kinds of minerals and ores and alloys except copper tin zinc nickel or alloy of these metals only
 Item No 1 of the second notification read All kinds of minerals ores metals and alloys including sheets and circles used in the manufacture of brass wares and scraps containing only any of the metals copper tin zinc or nickel except those included in any other notification issued under the Act
 The appellant Corporation which carried on the business of manufacturing and dealing in aluminium metal and vations aluminium products claimed the benefit of these notifica tions for its products
The High Court held that while aluminium ingots wire bars and billets would fall in the category of metals and alloys rolled products prepared by rolling ingots and extrusions manufactured from billets must be regarded as different commercial commodities from the ingots and billets and therefore outside the category of metals and alloys
Such rolled products included plates coils sheets circles and strips
The extrusions were manufactured in the shape of bars rods structurals tubes angles channels and different types of sections
This conclusion was upheld by this Court The Court referred to the history of the notifications issued by the State Govern ment from time to time in this behalf and came to the con clusion that the inference was irresistible that when such a notification referred to a metal it referred to the metal in the primary or original form in which it was saleable and not to any subsequently fabricated form
The Court rejected the contention that the word all used in the notification in referring to 194 all kinds of minerals ores metals and alloys should be given its fullest amplitude so as to include even subse quently fabricated forms of the metal
The Court felt that this construction was inconsistent with the scheme of the earlier notifications to which reference had been made and observed While broadly a metal in its primary form and a metal in its subsequently fabricated form may be said to belong to the same genus the distinction made between the two constitutes a dichotomy of direct significance to the con troversy before US After referring to its earlier decisions in State of MPv
Hiralal 1966 17 STC 313 Devi Dass Gopal Krish nan vs The State of Punjab 1967 20 STC 430 and State of Tamil Nadu vs Pyarelal Malhotra 1976 37 STC 3 19 the Court concluded We are of the definite opinion that the only interpretation possible is that aluminium rolled products and extrusions are regarded as distinct commercial items from aluminium ingots and billets in the notification issued under the UP Sales Tax Act
 The above decisions were rendered in the context of the Sales Tax Acts and notifications thereunder
They however bring out two points
First they make it clear that there is a real and clear dichotomy between iron and steel and products or goods made of iron and steel and indeed between any metal as such and the products or goods fabri cated therefrom
This is also clear from the various entries in the relevant schedules under the Income Tax Act itself
For instance item 2 in the List is Aluminium copper lead and zinc Metal
While ingots and sheets manufactured from scrap have been held to fall under item 2 finished commercial products like alumimum pigments aluminium arti cles and aluminium caps have been held to tall outside it
See CI Tv
Rashtriya Metal Industries Ltd a case under the  Indian Aluminium Co Ltd vs CIT  1983140 ITR 114 Cal Jeewanlal 1929Ltd
vs CIT and CIT vs Fitwell Caps P Ltd So also item 7 refers inter alia to cables which is only a type of thick copper wire used for the transmission of electricity
It has been held that insulated copper wires of a type known as winding wires will not fall under item 7 as they are not used for the above purpose and that an industry engaged in its manufacture is not an industry eligible for the reliefs of the kind presently under consideration See Hindustan 195 Wire Products vs CIT This deci sion is of no direct relevance here except to point out that no atttempt was made in the case to contend that they will fall under item 2 of the Schedule which covers aluminium copper lead and zinc metals
Item 11 in the Schedule refers to steel castings and forgings and malleable iron and steel castings
The expressions casting and forging refer to processes used in the manufacture or production of articles of iron and steel and also mean particularly when used in the plural the articles produced by the process vide Glossary of Tenns published by the Bureau of Indian Standards and relating to Iron and Steel  Forging
Item 21 which refers to Seamless Tubes also furnishes a similar indication
There is therefore a distinction between the article or thing referred to in the Schedule as iron and steel metal and articles or things manufactured from iron and steel
Secondly the decision in State of MB
vs Hiralal 1966 17 STC 313 shows that even the expression iron and steel which is wider than the expression we are concerned with as it is not further qualified by the word metal was held to mean iron and steel used as raw material for the manufacture of other goods
The Court held that bars flats and plates only represented such raw material in attractive and acceptable forms
Sri Gauri Shankar for the Revenue contended that the use of the appellation metal in the entry we are concerned with further restricts the nature of the qualify ing industry but we are not inclined to agree
Obviously it is not used to denote the metal in its pristine form as an ore or as an extraction from the ore
In the context of a manufacturing industry it is used we think for emphasising the distinction between the metal used as a raw material in the manufacture of various articles and the commercial articles made therefrom
We would therefore attach the same meaning to the expression as Hiralal supra did
In that case the Court held that the bars flats and pieces turned out by the assessee from the scrap metal were not products manufactured from the raw material but only repre sented the raw material rolled out in attractive and accept able forms
Per contra in Devidass Gopal Krishnan 1962 20 STC 430 rolled steel sections were held to be products manufactured from steel scrap and ingots
But that will not be conclusive here because the relevant provision here contemplates something manufactured out of iron ore or iron scrap
The question really therefore is having regard to the nature of the iron and steel industry and its processes do MS bars rods and rounds represent the raw material for the manufacture of the articles of iron and steel or are they themselves articles made of iron and steel For deciding the above issue learned counsel on both sides have placed before us a good deal of literature about the iron and steel industry as well as the glossary of terms used therein 196 a A succinct summary of the processes involved illus trated by a figurative chart is given in the very first page of The Making Shaping and Treating of Steel edited by Lankford and others 10th Edition
page 1
It is unnec essary to set out the process in detail here except to note that molten pig iron coming out of the blast furnace and iron scrap are fed into steel making furnaces wherefrom by a basic oxygen process or electric process or open hearth process molten steel is ladled out into moulds to form ingots
There are three stages in the manufacture of the steel i the first stage when ingots are obtained by Lapping and then teeming the molten steel into rectangular moulds ii the second stage where semi finished steel is cast in the form of blooms billets and slabs by reheating the ingots to an appro priate temperature and rolling or forging them into shapes and iii the production from blooms billets and slabs again by process of hot rolling cold rolling forging extruding drawing etc of finished steel products bars plates structural shapes rails wire tubular products coated and uncoated sheet steel etc
all in the many forms required by users of steel
The third of the processes involves heating the blooms billets and slabs in heating furnaces and then processing them through various types of mills i Structural mills  for obtaining structural shapes like beams angles tees zees channels piling etc
ii Rail mills  for producing standard rails crane rails and joint bars iii Bar mills  for producing bars which may be flat round halfround triangular square haxagonal or octagonal iv Seamless pile mills for producing pipes and tubes and skelp mills and other tubular products continuous Butt weld pipe mills v Plate mills  for manufacturing plates and vi Hot strip mills  for producing sheets strips and coils
and cold reduction mills 197 bThe Explanatory Not to Chapter 72 iron and Steel of the Harmonised Commodity Description and Coding Nomenclature HCCN are also on the same lines
The chapter covers the ferrous metals pig iron spilgeleisen ferro alloys and other materials as well as certain products of the iron and steel industry ingots and other primary products and the principal products derived therefrom of iron or non alloy steel of stainless steel and of other alloy steel
It is pointed out that iron ore waste scrap metal pre reduced iron ore and other ferrous waste is converted by reduction in blast furnaces or electric furnaces into pig iron or sponge iron or lump iron
Electrolysis or other chemical processes are used only when iron of exceptional purity is required for special use
Most of the pig iron is converted into steel in steel works but some are used in foundries iron works for manufacture of ingot moulds cast iron tubes and pipes and castings and the remainder are cost into the forms of pigs or blocks m casting machines or sand beds or produced in the form of irregularly shaped lumps plate iron or granulated
Pig iron cast iron sponge iron waste and scrap constitute the primary steel making materials
Steel making processes are either pneumatic or hearth proc esses and the steel producedby these and other processes are classified in various ways
Although molten steel may be cast in foundries into its final shape in_ moulds steel castings most molten steel is cast into ingots in moulds
_At the casting pouring and solidification stages steel is classified as rimming  or effervescent killed  ornon effervescent and semi killed  or balanced steel
After they have solidified and their temperature has been equalised the ingots are rolled into semi finished productrs blooms billets rounds slabs sheet bars on primary cogging or roughing mills blooming slabbing etc or converted by drop hammer or on a forging press into semi finished forg ings
Semi finished products and in certain cases ingots are subsequently converted into finished products
These may be flat products such as wide flats universal plates wild coil sheets plates and strip or long products such as bars and rods hot rolled in irregularly wound coils other bars and rods angles shapes sections and wire
These products are obtained by plastic deformation hot or cold
The hot processes are hot rolling forging or hot drawing and the cold processes
 are cold rolling extrusion wire drawing bright drawing centreless grinding or precision turning
The chapter proceeds to classify the various products in considerable detail c Reference has also been made to the tariff classi fications under the and the Central Excise Tariff Act 1975
Our attention was also invited to the Specification and Glossary prepared for the Bureau of Indian Standards by expert Products Sectional Committees on the subject of Iron and Steel
Extracts were also furnished 198 from the New Encyclopaedia Brittanica Macropaedia 15th Edn Vol21 Webster s Third New International Dictionary the Encyclopaedia of Chemical Technology by Kirk Othmer 3rd en Vol21 and a book on small scale steel making by RD Walker
We do not however propose to discuss these ex tracts and definitions as we do not think they can assist us in coming to nay conclusion on the issue before us
Basically the argument of counsel proceed on the following lines Sri Ramachandran learned counsel appearing for the assessee contends that in the steel making industry the manufacture of ingots billets blooms etc represents only an intermediate stage at which the iron and steel metal becomes semi finished steel
The semi finished steel is converted into plates bars or rods which are described as finished steels
According to him the bars rods and rounds continue to be iron and steel_ m a finished form
It is only finished steel that is subsequently used to manufac ture by various processes such as rolling cutting shear ing forging hammering and so on into various kinds of products which can be described as products of iron and steel in contrast with iron and steel metal  the item covered under the relevant entry of the schedules
He also draws our attention to a decision of the Calcutta High Court in Indian Aluminium Co vs CIT where while following the earlier decision in Indian Steel and Wire Products Ltd vs CIT 1977108 ITR 802 the court observed that there is really no divergence in view between the Calcutta and Kerala views and that the real question for consideration in each case is whether the articles in ques tion constitute finished products and represent articles of iron and steel or merely represent the raw material viz iron and steel metal in a different form and shape
On the other hand Dr Gauri Shankar learned counsel for the Department submits that iron and steel ceases to be a metal when it comes out of the furnace in the primary steel mills in the form of ingots
At the best the next stage at which the ingots become semi finished products in the shape of billets blooms and slabs may also be said only to convert the raw material into a different form or shape
But he says by no stretch of imagination can the next stage during which the billets blooms and slabs are heatedand passed through various types of mills enumerated earlier be considered as involving not any manufacture but only a conversion of the raw material into other forms or other shapes
According to the learned counsel the expres sion iron and steel metal only comprehends the iron and steel as it emerges in the form of billets blooms and slabs from the steel mills and that all subsequent products wheth er in the form of 199 rails rods including wire rods bars angles channels tees zees pipes tubes sheets strips plates and coils turned out by the various other types of mills would consti tute articles made of iron and steel
He also invited our attention to a clarification by the Central Board of Taxes in response to a query from the Federation of Indian Cham bers of Commerce and Industry that rolling mills making bars and rods are not covered by item 1 of the Fifth Sched ule
We have considered the arguments addressed by both counsel
In our opinion Sri Ramachandran is right in con tending that in interpreting the provisions under considera tion we would do well to keep in mind the background in which concessions to certain basic industries were intro duced in the Income tax Act
The process started with the introduction of a rebate for exporters under the Finance Act of 1963 which continued till 1966
The Budget speech of the Finance Minister vide 1963 48 ITR St 34 indicates that the incentive was granted to assessees engaged in the manufacture of any articles in an industry specified in the First Schedule to the Industries Development  Regulation Act 1951
Item 1 of the said Schedule reads 1
Metallurgical Industries A Ferrous 1 Iron and Steel Metal 2 Feno alloys 3 Iron and Steel castings and forgings 4 Iron and Steel structurals 5 Iron and Steel pipes 6 Special Steels 7 Other products of iron and steel B Non ferrous 1 Precious metals including Gold and Silver and their alloys IA Other non ferrous metals and their alloys 2 Semi manufactures and manufactures
Again in 1964hen the Finance Act of 1964 decided to grant a rebate in the corporation tax payable by companies in order to encourage development of certain industries which occupy an important place in our economy the list of indus tries named in the Finance Act was similar to and included many of the items including items 1 to 3 of the list we are concerned with now
The reliefs were given to strengthen the reserves and augment the capacity of the corporate sector to develop
This process was 200 continued under the Finance Act of 1965 Vide 1965 55 ITR St 57 and 122 which introduced a higher develop ment rebate for machinery or plant installed for the pur poses of construction manufacture or production of any one or more of the articles or things specified in the list in the Fifth Schedule
The Finance Act of 1966 substituted a new concession to these priority industries basic to the commercial development of the community
This historical background reflects the intention of the legislature to grant progressively certain exemptions reliefs or conces sions for certain types of industries which were considered important for na tional development  The industry in iron and steel and other metals figures in all these lists_ The only relevance of this background to the issue before us is that it gives an indication that the incentive concession or relief granted under these provi sions has to be construed in a broad and comprehensive manner so as to cover all manufacturing activities legiti mately pertaining to specified core industry with no limita tion save what may be called for by the wording of a partic ular entry
So far as items 1 and 2 are concerned as earli er pointed out the wording points to a distinction between the metal which is used as the base and other articles manufactured therefrom
We have earlier pointed out that pig iron and iron scrap are fed into furnaces to produce ingots billets and blooms
But both are iron and steel in different form the latter being referred to as semi finished steel
Likewise we think the bars rods rounds wife rods and the like constitute the second stage in which one gets only finished forms of iron and steel
Having regard to the nature and weight of the metal it has to be finished to assume these forms before manufacturers of iron and steel articles can take over and proceed to manufacture articles from them by drawing wires or converting them into rails or shaping them into tees zees pipes tubes and the like see CIT vs Tensile Steel Ltd or again producing articles of iron like ploughs shovels pickaxes lathes blowers surface guiders and drills as in CIT vs Ludhiana Steel Rolling Mills 1989 180 ITR 155 PH
Whether the article produced is the raw material or an article made of iron and steel has to be decided on the basis of the nature of the article and not the kind of mill which turns it out
It is significant that these items do not draw distinction between basic steel mills integrated steel mills and the various other types of mills that are used in the industry which have been referred to earlier
The Board s clarification referred by Dr Gaurishankar that the machinery and plant in rolling mills will not be eligible for the higher development rebate would not there fore seem to be justified if it intends to draw a distinc tion between the same machinery and plant when used in rolling mills and when used in other mills in the industry
If machinery and plant installed in steel mills where the process 201 includes not merely the production of ingots billets and the like but also the production of bars and rods are eligi ble for the higher development rebate it is difficult to see why the same plant and machinery when installed in rolling mills which proceed from the stage of ingots or billets to manufacture bars and rods should not be eligible for the higher rate of development rebate
In considering the issue before us we should not be classifications of stages of manufacture that may be carried away by classifi cation of stages of manufacture that may berelevant forother purposes
We would like to emphasise at the cost ofrepeti tion that what we should examine is not the nature of the mill which yeilds the article but the nature of the article or thing that is manufactured and ask ourselves the question whether such article or thing can be considered as raw material for manufactrure of other articles made of the metal or is it itself an article made of the metal
On this issue our view is as we have already stated that the goods in the present case fall in the former category
We think Sri Ramachandran is right in pointing out that the mild steel rods bars or rounds which are manufactured by the assessees here are only finished forms of the metal and not articles made of iron and steel
They only constitute raw material for putting up articles of iron and steel such as grills or windows by applying to them processes such as cutting or turning
The rod or the wire rods with which some of the decisions were concerned are likewise not products of iron and steel but only certain finished or refined forms of the metal itself
We do not think much assistance can be derived for the interpretation of the provision before us from the Central Excise  Salt Act or the various classifications statutorily or commercially drawn up for that purpose
They are more refined and intricate classifications for the purposes of excise duty and cannot be imported into the present context
As we have mentioned earlier some guidance as to inter pretation of item 1 to the schedule can be derived from item no11 which refers to forgings and castings
These ex pressions obviously refer to articles obtained from the raw material iron and steel by forging and casting
The argument in some of the decisions referred to before us that item No 1 should be interpreted strictly because of the existence of item No 11 seems to proceed on an erroneous basis
It would be more appropriate to say that forging and castings are not covered by item 1 being articles made of iron and steel but that since the legislature definitely intended to give relief even in respect of such articles item 11 and also item 21 were introduced
In fact there is some force in the contention urged on behalf of the assessees that even if MS steel rods bars and rounds cannot be taken as iron and steel metal they would fall under the category of forg ings and castings referred to in item 11
We do not howev er wish to express any 202 concluded opinion on this aspect because item No 11 was not relied upon by the assessee at any earlier stage
In CA No 140479 the assessee Krishna Copper and Steel Rolling Mills manufactured iron rods and girders out of scrap metal initially converted into billets
Before the High Court the argument seems principally to have turned on the question whether an assessee manufacturing these arti cles out of iron scrap would be entitled to the higher development rebate
The assessee cited a circular of the Board that under item 2 of the schedule the higher devel opment rebate would be available to an assessee who manufac tured articles from aluminium scrap vide circular no25 D XIX 16 dated 10th October 1966
The High Court on this basis answered the question by saying that the assessee before it was also entitled to the higher development rebate though it produced articles only from iron scrap
This does not really answer the real question but for the reasons we have already given we agree with the conclusion drawn by the High Court
For the reasons stated above we are of the opinion that the view taken by the High Courts in the present cases does not call for any interference
The appeals therefore fail and are dismissed
But in the circumstances we make no order regarding costs
VPR Appeal dismissed
201 includes not merely the production of ingots billets and the like but also the production of bars and rods are eligi ble for the higher development rebate it is difficult to see why the same plant and machinery when installed in rolling mills which proceed from the stage of ingots or billets to manufacture bars and rods should not be eligible for the higher rate of development rebate
In considering the issue before us we should not be carried away classi fications of stages of manufacture that may be relevant for other purposes
We would like to emphasise at the cost of repetition that what we should examine is not the nature of the mill which yeilds the article but the nature of the article or thing that is manufactured and ask ourselves the question whether such article or thing can be considered as raw material for manufactrure of other articles made of the metal or is it itself an article made of the metal
On this issue our view is as we have already stated that the goods in the present case fall in the former category
We think Sri Ramachandran is right in pointing out that the mild steel rods bars or rounds which are manufactured by the assessees here are only finished forms of the metal and not articles made of iron and steel
They only constitute raw material for putting up articles of iron and steel such as grills or windows by applying to them processes such as cutting or turning
The rod or the wire rods with which some of the decisions were concerned are likewise not products of iron and steel but only certain finished or refined forms of the metal itself
We do not think much assistance can be derived for the interpretation of the provision before us from the Central Excise  Salt Act or the various classifications statutorily or commercially drawn up for that purpose
They are more refined and intricate classifications for the purposes of excise duty and cannot be imported into the present context
As we have mentioned earlier some guidance as to inter pretation of item 1 to the schedule can be derived from item No 11 which refers to forgings and castings These expressions obviously refer to articles obtained from the raw material iron and steel by forging and casting
The argument in some of the decisions referred to before us that item No 1 should be interpreted strictly because of the existence of item No 11 seems to proceed on an erroneous basis
It would be more appropriate to say that forging and castings are not covered by item 1 being articles made of iron and steel but that since the legislature definitely intended to give relief even in respect of such articles item 11 and also item 21 were introduced
In fact there is some force in the contention urged on behalf of the assessees that even if MS steel rods bars and rounds cannot be taken as iron and steel metal they would fall under the category of forgings and castings referred to in item 11
We do not however wish to express any 202 concluded opinion on this aspect because item No 11 was not relied upon by the assessee at any earlier stage
In CA No 140479 the assessee Krishna Copper and Steel Rolling Mills manufactured iron rods and girders out of scrap metal initially converted into billets
Before the High Court the argument seems principally to have turned on the question whether an assessee manufacturing these arti cles out of iron scrap would be entitled to the higher development rebate
The assessee cited a circular of the Board that under item 2 of the schedule the higher devel opment rebate would be available to an assessee who manufac tured articles from aluminium scrap vide circular no25 D XIX 16 dated 10 th October 1966
The High Court on this basis answered the question by saying that the assessee before it was also entitled to the higher development rebate though it produced articles only from iron scrap
This does not really answer the real question but for the reasons we have already given we agree with the conclusion drawn by the High Court
For the reasons stated above we are of the opinion that the view taken by the High Courts in the present cases does not call for any interference
The appeals therefore fail and are dismissed
But in the circumstances we make no order regarding costs
VPR Appeals dismissed


Summary:
Petitioner claiming that he and other similarly placed Compositors working in the Government of India presses all over India were entitled to the status and salary of Compos itors Grade I in the highly skilled category with effect from January 1 1966 on the ground that the decision of the Himachal Pradesh High Court in Thakurs case was applicable in principle to all the Compositors filed the present petition under Article 32 of the Constitution
The High Court in Thakur s case held that the categori sation as highly skilled and skilled on the basis of seniority alone was unreasonable and discriminatory
As no special leave petition against the judgment of the High Court was brought to this Court the judgment became final
Over ruling Thakur s case and dismissing the petitions this Court HELD IAcademic pursuit and experience are two primary sources of learning
A Compositor s job in a printing press is a skilled job requiring special technique
In such a job it would be reasonable to measure the standards of skill by length of experience
The High Court fell into error in quashing the classification based on experience arising out of length of service
157 B 2
Highly skilled category was created to handle the nature work which involved higher skill than the original hand composition
The Compositors with longer service and who were found fit 153 for promotion were appointed to Grade I and were categorised as highly skilled
Experience itself is merit and can be a valid basis for classification
157 C D 3
Keeping in view the large number of Compositors all over the country and to remove stagnation the ratio between the two cadres should be 33 13 66 23 
158 D 4
The respondents are directed to increase the strength of the cadre of Compositor Grade I highly skilled  to 33 13 percent with effect from April 1 1992
158 D Thakur s Case Writ petition CW No 6169 dated 2151971 overruled
State of UPv
JP Chaurasia   re ferred to