Rolling steel into rolled steel sections is a process of manufacture and the levy of both sales tax and purchase tax on the same commodity is not contrary to Section 15(a) of the Central Sales Tax Act, 1956.

Mehar Singh, J.

1. This judgment will dispose of Civil Writ Petitions Nos. 467 to 477, 870, 1629, and 1653 of 1960 by various petitioners who are owners of Iron and Steel Rolling Mills at various places. The respondents in the petitions are the State of Punjab, the Excise and Taxation Officer, i.e., the assessing authority concerned, and the Deputy Excise and Taxation Commissioner, respectively respondents Nos. 1 to 3. The petitions are under Article 226 seeking writs, directions and orders against the respondents to have proceedings quashed in regard to the realization of purchase tax from the petitioners and prohibition against them from proceeding against the petitioners to recover the alleged amount of purchase tax.

2. In substance the case of the petitioners is that they carry on the business of rolling steel into rolled steel sections. They purchase steel and roll it into rolled steel sections. They claim that the process of rolling steel into rolled steel sections is not a process of manufacture and that this process amounts to no more than making the steel to be a more marketable commodity as Such. According to them the nature and character of the commodity docs not undergo any alteration. The assessing authority has called upon them to pay purchase tax under the Punjab General Sales Tax Act (Punjab Act No. 46 of 1948) as amended by the East Punjab General Sales Tax (Amendment) Act (Punjab Act No. 7 of 1958). They claim that the levy of purchase tax upon them is not valid because (a) rolling of steel into rolled steel sections is not "manufacture" within the meaning of Section 2(ff) of the Act, (b) the sellers of steel to the petitioners are said to be liable to pay sales tax under the Act, and (c) it is not made clear at what stage in a particular case the sale or the purchase tax is leviable and as sale or purchase tax may not be levied at more than one stage and may not exceed 2 per cent, the Legislature should have specified at what particular stage the sale or purchase tax is leviable. These are in substance the three grounds of challenge against the demand of the assessing authority of the purchase tax from the petitioners in regard to the steel purchased by them to roll the same into rolling steel sections in their mills.

3. At the hearing it has not been the position by the learned counsel appearing for the various petitioners that rolling of steel into rolled steel sections is not a process of manufacture. It is not true that this process only renders steel into a more marketable commodity and not into a different commodity. In Section 14 of the Central Sales Tax Act, (No. 74 of 1956) Clause (iv) deals with "iron and steel" as one of the goods declared of special importance in inter-State trade or commerce, and under this clause there are four heads, of which head (a) relates to pig iron and iron scrap, head (c) to steel scrap, steel ingots, steel billets, steel bars and rods, and head (d) (iv) to rolled steel sections sold in the same form in which they are directly produced by the rolling mills. It is clear that rolled steel sections are treated as a separate commodity as against the raw material dealt with in heads (a) and (c) of this clause. At the hearing what was stated was that the petitioners purchased iron scrap or steel scrap and then rolled the same into rolled steel sections. In the petitions it is not made so clear. It is obvious that when the raw material Of iron or steel that the petitioners purchase and rolling the same turn into rolled steel sections, the outcome, that is to say, the rolled steel sections, is a new commodity, the result of the process of manufacture by steel having been rolled into that commodity. So the first ground urged is without basis and what is purchased by the petitioners as iron or steel for the purpose of rolling it into rolled steel sections is acquisition of goods for use in the manufacture of goods for sale and thus it is purchase as that expression is use