Case: M/s. Jai Vijai Metal Udyog Pvt. Ltd. Industrial Estate, Varanasi Vs. The Commissioner, Trade Tax, U.P. Lucknow

Briefly stated, the material facts giving rise to the present appeal are as follows:The Dealer, incorporated as a private limited company, is engaged in the manufacture of aluminium `properzi redraw rods from aluminium ingots. The word `properzi is the name of the person who had invented the process of manufacturing redraw rods. According to the Dealer, the process involves pouring of molten metal from pot room crucible directly in the melting furnace, which is then transferred to holding furnace. The material is then degassed, fed through a cast iron spout into the groove of a water cooled circularwheel, which rotates at a slow speed. The top portion of the grooved steel mould is covered by steel belt and during one half rotation of the casting wheel, the metal gets solidified and comes out in the form of a continuous bar of about 12 sq. cms. Cross section at a temperature of 4400 to 3800 centigrade. This bar is then fed through a 13 strand `properzi mill where the thickness of cross section is progressively reduced and finally a 9.5 mm diameter redraw rod comes out, which is then wound on the drum of a mechanical coil. The stand of the Dealer is that `properzi rods of the size of 9.5 mm have no use in the market inasmuch as except for being used as raw material in the manufacture of wires of different sizes, it cannot be used as such for any other purpose.For the assessment years86 andthe `properzi rods manufactured by the Dealer were classified by the Assessing Authorities to be a metal/primary metal and were assessed at the rate of 2% plus surcharge at 10% of the said rate in terms of Entry 24 of the Schedule to the U.P. Trade Tax Act, 1948 (for short "the U.P. Act"), as inserted by Notificationdated 30th September, 1983. The said Entry reads as follows:"(24) All kinds of ore, metals, scraps and alloys including sheets and circles used in the manufacture of brass wares, except those included in any other entry or any other notification issued under the Act."Similarly, for the assessment yearwith which we are concerned in this appeal, the Assessing Authority taxed the `properzi rods at the rate of 2.2% vide order dated 19th August, 1992. However, subsequently proceedings under Section 21 of the U.P. Act were initiated against the Dealer on the ground that assessment in respect of the said assessment year had escaped assessment or had beenThe main reason forthe assessment was that while assessing another dealer in the State, namely, M/s Hindustan Aluminium Corporation (hereinafter referred to as "HINDALCO"), who were also engaged in the manufacture of `properzi rods and other products, the Assessing Officer had held that `properzi rods were not `Metal falling under Entry 24.Thus, in thethe Assessing Officer held that `properzi redraw rods manufactured by the Dealer being a "rolled product" were not primary metal and being commercially different from metal, were liable to be taxed as an unclassified item at the rate of 10% in terms of Section 3A(1)(c) of the U.P. Act. Theresulted in creation of an additional demand of Rs.35,19,632/against the Dealer.Being aggrieved, the Dealer preferred separate appeals against the assessments under the Regional Sales Tax Act and the Central Sales Tax Act. Relying on the decision of this Court in Hindustan Aluminium Corporation Ltd. Vs. State of Uttar PradeshAnr. ((1981) 3 SCC 578 ), the Deputy Commissioner (Appeals), Sales Tax, Varanasi vide his order dated 11th February, 1993, allowed both the appeals. The Deputy Commissioner (Appeals) found that `properzi rods manufactured by the Dealer were not in the final shape of finished goods and were the basic raw material for the manufacture of aluminium wires and, therefore, being a primary metal, would attract tax at the rate of 2%. Aggrieved by the said order, the Revenue took the matter in second appeal to the Tribunal which, vide order dated 27th March, 1998, dismissed both the appeals.Being dissatisfied, the Revenue filed Revision Petitions before the High Court. As stated above, by the impugned order, the High Court has allowed both the Revision Petitions. Placing reliance on the decision of this Court in Hindustan Aluminium Corporation Ltd. (supra) wherein, according to the High Court, it had been held that aluminium rolled products and extrusions did not fall in the category of metal and were liable to be taxed as unclassified item, the High Court has come to the conclusion that `properzi rods manufactured by the Dealer are, in fact, wire bars and not wire rods, and have, therefore, to be taxed as unclassified items. Aggrieved, the Dealer is before us in this appeal.

Reasoning:
Now, coming to the second issue, it is trite that in view of the inherent complexity of fiscal adjustment of diverse elements, a wider discretion is given to the Revenue for the purpose of taxation and ordinarily different interpretations of a particular tariff entry by different authorities as such cannot be assailed as violative of Article 14 of the Constitution. Nonetheless, in our opinion, two different interpretations of a particular entry by the same authority on same set of facts, cannot be immunised from the equality clause under Article 14 of the Constitution. It would be a case of operating law unequally, attracting Article 14 of the Constitution.In the present case, as stated above, the basis forthe assessment of the Dealer in respect of assessment yearwas the view taken by the Assessing Officer in the case of HINDALCO that `properzi redraw rods were not primary metal in terms of Entry 24. Therefore, subsequently when on remand by the High Court as affirmed by this Court, in HINDALCOs fresh assessment in respect of the said assessment year, the said product was held to be a `metal falling under Entry 24, the entire foundation forof the assessment vanished. Having accepted the view of the Assessing Officer in the case of HINDALCO, the Sales Tax Authorities in the State cannot be permitted to take a different stand in the case of the Dealer in respect of a similar item for the same assessment year.