2010 Supreme(SC) 328

2010 (3) Supreme 72
SUPREME COURT OF INDIA
D.K. Jain and T.S. Thakur , JJ.
M/s. Jai Vijai Metal Udyog Pvt. Ltd. Industrial Estate, Varanasi — Appellant
versus
The Commissioner, Trade Tax, U.P. Lucknow — Respondent
Civil Appeal No.95 of 2009
Decided on : 16-04-2010

IMPORTANT POINT
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, 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

Headnote:U.P. Trade Tax Act, 1948- Entry 24 of Schedule-Classification of, properzi’ rods manufactured by Dealer by Assessing Authorities to be a metal/primary metal and assessing at rate of 2% plus surcharge at 10% of the said rate in terms of Entry 24 of Schedule Act, 1948- However,subsequently proceedings under Section 21 of the U.P. Act were initiated against Dealer on the ground that assessment in respect of the said assessment year had escaped assessment or had been under-assessed- The main reason for re-opening the assessment was that while assessing another dealer in the State, namely, M/s Hindustan Aluminium Corporation who were also engaged in manufacture of ‘properzi’ rods and other products, Assessing Officer had held that ‘properzi’ rods were not ‘Metal’ falling under Entry 24- Thus, in the re-assessment, the 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-Challenge thereagainst- 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, 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- Evidence on record that pursuant to the remand by the High Court in the case of HINDALCO, the Assessing Officer examined the entire issue afresh; by summoning the representatives of other manufacturers to understand the manufacturing process as also commercial value, and then came to the conclusion that ‘properzi’ redraw rod is like an ingot - a form of primary metal and, therefore, falls in the category of metal and alloy, covered under Entry 24- In the instant case, the basis for re-opening assessment of the Dealer in respect of assessment year 1988-89, was view taken by 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 HINDALCO’s 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 for re-opening of the assessment vanished- Having accepted the view of the Assessing Officer in the case of HINDALCO, the Sales Tax Authorities in the State could not be permitted to take a different stand in the case of the Dealer in respect of a similar item for the same assessment year-Hence view taken by High Court, distinguishing the case of HINDALCO from that of Dealer, held unsustainable- Impugned order of High Court set aside and that of the Tribunal restored-Appeal Allowed. (Paras 13 to 16)

       Facts of the Case :

       Properzi’ rods manufactured by Dealer were classified by Assessing Authorities herein in the instant case to be a metal/primary metal and assessing at rate of 2% plus surcharge at 10% of the said rate in terms of Entry 24 of Schedule Act, 1948.However,subsequently proceedings under Section 21 of the U.P. Act were initiated against Dealer on the ground that assessment in respect of the said assessment year had escaped assessment or had been under-assessed. The main reason for re-opening the assessment was that while assessing another dealer in the State, namely, M/s Hindustan Aluminium Corporation who were also engaged in manufacture of ‘properzi’ rods and other products, Assessing Officer had held that ‘properzi’ rods were not ‘Metal’ falling under Entry 24. Thus, in the re-assessment, the 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

       2.Issue in consideration in present appeal was whether aluminium ‘properzi’ redraw rods could be classified as metal under Entry 24 of Notification dated 30th September, 1983 and (ii) when admittedly, the foundation for re-opening Dealer’s assessment in respect of assessment year 1988-89 was the assessment in the case of HINDALCO, in which case, after the remand by the High Court, assessment for that year had attained finality, could the Revenue be permitted to take a different view in the case of the Dealer from that taken in the case of HINDALCO in respect of the same assessment year?

       Findings of the Court :

       Evidence on record showed that pursuant to the remand by the High Court in the case of HINDALCO, the Assessing Officer examined the entire issue afresh; by summoning the representatives of other manufacturers to understand the manufacturing process as also commercial value, and then came to the conclusion that ‘properzi’ redraw rod is like an ingot - a form of primary metal and, therefore, falls in the category of metal and alloy, covered under Entry 24. In the instant case, the basis for re-opening assessment of the Dealer in respect of assessment year 1988-89, was view taken by 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 Apex Court, in HINDALCO’s 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 for re-opening of the assessment vanished- Having accepted the view of the Assessing Officer in the case of HINDALCO, the Sales Tax Authorities in the State could not be permitted to take a different stand in the case of the Dealer in respect of a similar item for the same assessment year.Hence view taken by High Court, distinguishing the case of HINDALCO from that of Dealer was held unsustainable. Impugned order of High Court was set aside and that of was Tribunal restored. Appeal was Allowed.