Case: M/S Bansal Wire Industries Ltd Vs. State Of U.P

4. The appellant is a Public Limited Company incorporated under the Indian Companies Act, 1956 and is engaged in the business of manufacture and sales of "stainless steel wires". An assessment order was passed under Rule 41(8) of the UP Trade Tax Rules for the assessment year 1999-2000 under the UP Trade Tax Act, 1948 (for short "the UP Act") as well as under the Central Act. As per the said assessment order, the tax on sales of "stainless steel wire" was levied @ 4% and sales covered by Form 3-kh were taxed @ 2%.5. The respondent, however, thereafter held that the sales of "stainless steel wire" has wrongly been taxed @ 4% treating the same as a "declared commodity" and that in fact "stainless steel wire" is not a declared commodity because it is outside the ambit of "Iron and Steel", which is a declared commodity under Section 14 of the Central Act.6. In view of the satisfaction arrived at by the respondent, a proposal was sent to the Additional Commissioner, Grade-I, Trade Tax, Ghaziabad Zone, Ghaziabad requesting him for permission to re-open the case of the appellant for the assessment year 1999-2000.7. The Additional Commissioner, Grade-I, Trade Tax, Ghaziabad Zone, Ghaziabad issued a notice dated 22.03.2006 directing the appellant to show cause as to why the permission should not be granted to the assessing authority for re-opening of the case under Section 21(2) of the UP Act.8. Respondent No. 3 on 24.3.2006 issued a notice under Section 10-B of the U.P. Act for revising the assessment order passed for the assessment year 2000-01. The appellant states that similar notices for the assessment years 2001-02 and 2002-03 were also issued to the appellant by Respondent No. 3.9. The appellant filed its reply dated 27.3.2006 to the notice dated 24.3.2006 and, inter alia, stated that "stainless steel wire" is a declared commodity under clause (iv) of Section 14 of the Central Act, hence in view of Section 15 thereof, no tax can be imposed on the declared commodities in excess of 4%. The appellant had also submitted identical replies to the notices relating to assessment years 2001-02 and 2002-03 respectively.10. After considering the reply as furnished by the appellant, the Additional Commissioner, Grade-I, Trade Tax, Ghaziabad Zone, Ghaziabad by its order dated 27.03.2006 granted permission to the assessing authority to re-open the case under Section 21(2) of the UP Act for the assessment year 1999-2000.11. Being aggrieved by the issuance of the aforesaid notice, the appellant herein filed a Writ Petition before the Allahabad High Court, which was registered as Writ Petition No. 770 of 2006, wherein, the respondent filed a counter affidavit. The Allahabad High Court, thereafter heard the counsel appearing for the parties and by its judgment and order dated 21.05.2010 dismissed the Writ Petition holding that the "stainless steel wire" is not covered under the item "tools, alloys and special steel" on entry no. (ix) and, therefore, does not fall under "Iron and Steel" as defined under clause (iv) of Section 14 of the Central Act and therefore the provision of Section 15 of the Central Act does not apply.12. Being aggrieved by the judgment and order dated 21.05.2010 passed by the Allahabad High Court, the present appeals were filed by the appellants on which we heard the learned counsel appearing for the parties.

Reasoning: 26. In the aforesaid decision in Pyare Lal Mehrotra (supra) the very word "that is to say", as per Section 14 of the Central Act was considered and it was held that originally expression "that is to say" is employed to make clear and fix the meaning of what is to be explained or defined and that such words are not used, as a rule, to amplify a meaning while removing a possible doubt for which purpose the word "includes" is generally employed. In the context of Section 14 of the Central Act, this Court in the said decision held that the expression "that is to say" is used in Section 14 apparently to mean to exhaustively enumerate the kinds of goods in a given list. It was also held in the said decision that the purpose of an enumeration in a statute dealing with sales tax at a single point in a series of sales would, very naturally, be to indicate the types of goods each of which would constitute a separate class for a series of sales.Therefore, in view of the position settled by this Court, it is clearly established that so far the items as mentioned in clause (iv) of Section 14 of the Central Act is concerned, each of the categories falling under "iron and steel" constitutes a new species and each one of them is separate commodity for the purposes of sales tax.28. The expression "of any of the above categories" appearing in entry Nos. (ix) and (xvi) of clause (iv) of Section 14 of the Central Act would indicate that they would each be items referred in the preceding items. Therefore, even the expression "of any of the above categories" in entry No. (ix) of clause (iv) would only relate to steel and alloy produced for any of the materials mentioned in item nos. (i) to (viii). Thus "stainless steel wire" produced by the appellant cannot be read into item no. (xv) which reads as "wire rods and wires-rolled, drawn, galvanized, aluminized, tinned or coated such as by copper".It is thus clear, that if the object of newly substituted clause (iv) of Section 14 of the Central Act was to make iron and steel taxable as one substance, the item could have been "Goods of iron and steel" or, to be more clear, "Iron and steel irrespective of change of form or shape or character of goods made out of them". The more natural meaning, therefore is that each item specified in Section 14(iv) forms a separate species for each series of sales. When one commercial commodity is, by manufacturing process etc., transformed into another, it becomes a separate commodity for sales tax purposes. If iron bars were drawn into "wire", such wire shall be a different taxable commodity.It is thus clear, that the language used in entry no. (ix) is plain and unambiguous and that the items which are mentioned there are "tools, alloy and special steel". By using the words "of any of the above categories" in entry Nos. (ix) would refer to entries (i) to (viii) and it cannot and does not refer to entry no (xv). However, entry (xvi) of Clause (iv) would be included in entry (xvi) particularly within the expression now therein any of the aforesaid categories. Therefore, the specific entry "tool, alloy and special steel" being not applicable to entry (xv), the contention of the counsel for the appellant has to be rejected. It is, therefore, held that the stainless steel wire is not covered within entry (ix) of clause (iv) of Section 14 of Central Sales Tax Act.34. It is a settled principle of law that the words used in the section, rule or notification should not be rendered redundant and should be given effect to. It is also one of the cardinal principles of interpretation of any statue that some meaning must be given to the words used in the section. Expression "Wire rods and wires" which is mentioned in item no. (xv) would not and cannot cover the expression "tools, alloy and special steels" of entry no. (ix) nor it would refer to the expression "Iron and Steel" as each item used in entry nos. (ix) and (xv) are independent items not depending on each other at all as has been held in the case of Pyare Lal Mehrotra (supra).35. In arriving at the aforesaid conclusion, we find support from the decision of this Court in Union of India vs. Hansoli Devi reported in (2002) 7 SCC 273 wherein this Court held that it is a cardinal principle of construction of a statute that when the language of the statute is plain and unambiguous, the court must give effect to the words used in the statute.36. Besides, in a taxing Act one has to look merely at what is clearly said and there is no room for any intendment. In a taxing statute nothing is to be read in, nothing is to be implied, one can only look fairly at the language used.37. Therefore, the findings and the decision arrived at by the High Court that stainless steel wire is not covered under the entry of "tools, alloys and special steels" in entry no. (ix) and, therefore, does not fall under "Iron and Steel" as defined under Section 14(iv) of the Central Act have to be upheld. Hence, the said commodity cannot be treated as a declared commodity under Section 14 of the Central Act and provision of Section 15 of the Central Act does not apply to the facts of the present appeals.