Shreetron India Limited vs The Commissioner, Trade Tax

Rajes Kumar, J.—Present two revisions u/s 11 of the U.P. Trade Tax Act (hereinafter referred to as the "Act'') are directed against the order of the Tribunal dated 1st March, 2000 relating to the assessment year, 1996-97 both under the U.P. Trade Tax Act and Central Sales Tax Act.

The short question involved in both the aforesaid revisions relate to the rate of tax on the copper busbars, which is also called as copper flats. It was explained by the applicant that the copper busbars have been sold to the department of Telecommunication and is used in Telephone Exchange for the purposes of reduction of interruption. It was claimed that the copper busbar is metal and liable to tax under the Notification No. ST-I1-1225/1-9 (94)/91-U.P. Act-XV-48-Order-92, dated 31st March, 1992 at the rate of 2.5 percent including surcharge. Assessing authority has not accepted the claim of the applicant and has assessed the turnover of the copper busbars at the rate of 10 percent under the Notification No. ST-II-''3097/XI-9 (94)/91- U.P. Act-XV-48-Order-92, dated 31st July, 1992 inasmuch as the assessing authority was of the view that the copper busbars is required for generation, distribution and transmission of energy. The view of the assessing authority has been upheld in first appeal and by the Tribunal.

Heard learned Counsel for the parties.

Learned Counsel for the applicant submitted that the copper busbar which is known as copper flat is a metal and accordingly, liable to tax under the Notification No. ST-I1-1225/1-9 (94)/91-U.P. Act-XV-48-Order-92, dated 31st March, 1992. He submitted that the copper busbar is not required for the transmission or distribution of electrical energy but is used in the Telephone Exchange for the purposes of reduction of interruption. He submitted that the Tribunal has illegally held that the copper busbar is an instrument of Telephone Exchange. In support of his contention, he relied upon the order of the Commissioner of Trade Tax in the case of Mirzapur Aluminium Industries, Mirzapur u/s 35 of the Act, Division Bench decision in the case of Mansatta Industries Pvt. Ltd. Vs. The State of Gujarat, , Commissioner of Sales Tax Vs. Ruchica Enterprises, and the decision in the case of S/S Amit Udyog v. CTT reported STI 1999 U.P. T M 126.

Learned Standing Counsel submitted that the copper busbar as per the case of the applicant itself is a copper flat, which is required in the Telephone Exchange for the transmission and distribution of electrical energy.. He submitted that copper busbar is not a primary metal, therefore, it does not fall under the entry of Notification No. ST-II-1225/1-9 (94)/91-U.P. Act-XV-48-Order-92, dated 31st March, 1992. He submitted that under the aforesaid notification only the primary metals are covered as held by the Apex Court in the case of M/S Hindustan Aluminium Corporation Ltd., v. State of Uttar Pradesh and Anr. reported in 1981 U.P.T.C. 1249.

Having heard the learned Counsel for the parties, I have perused the order of the Tribunal and the authorities below.

Notification No. . ST-II-1225/XI-9 (94)/91-U.P. Act-XV-48-Order-92, dated 31st March, 1992 and Notification No. ST-II-3097/XI-9 (94)/91- U.P. Act-XV-48-Order-92, dated 31st July, 1992 are referred herein below.

Relevant entry of Notification No. ST-U-1225/XI-9 (94)/91-U.P. Act-XV-48-Order-92, dated 31st March, 1992.

3(b) (i) Aluminium ore, metal and scraps. M or I 4 percent, (ii) All other ores, metals, scraps and M or I 2 percent. 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 U.P. Sales Tax Act.

Relevant entry of Notification No. ST-II-3097/XI-9 (94)/91- U.P. Act-XV-48-Order-92, dated 31st July, 1992.

All electrical goods, instruments, apparatus, M or I 8 percent, appliances and all such articles the use of which cannot be had except with the application of electrical energy, including fans, fluorescent tubes (including their starters, chokes, fixtures, fittings and accessories), electrical earthenware and porcelain, electrical equipments, plants and their accessories required for generation, distribution and transmission of electrical energy, electric motors and parts thereof, and all other accessories and components whether sold as a whole or in parts, but excluding torches, torch- cells, dry cell batteries, torch-bulbs and filament lighting bulbs.

In the case of M/S Hindustan Aluminium Corporation Ltd., v. State of Uttar Pradesh and Anr. (supra) the entry "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" came up for consideration before the Apex Court. The Apex Court held that, "the consideration of the notifications issued from time to time will show that the expression "metal" has been generally employed to refer to the metal in its primary sense. The reference is to the metal in the form in which it is marketable as a primary commodity. Subsequent form evolved from the primary form and constituting distinct commodities marketable as such must be regarded as new commercial commodities".

It is not the case of the applicant that copper busbar is a metal in a primary form. As per applicant''s own admission, it is copper flat, therefore, it appears to be an item, which is made from the primary copper metal, and it is not a primary metal as such. Therefore, the argument of the learned Counsel for the applicant is not acceptable. The decisions cited by the learned Counsel for the applicant are not applicable because these decisions are prior to the decision of M/S Hindustan Aluminium Corporation Ltd., v. State of Uttar Pradesh and Anr. (supra) inasmuch as they are distinguishable on the facts of the case.

In the case of Mirzapur Aluminium Industries, Mirzapur, the dispute relates to sheets and circles made of mixture of copper and zinc used in the manufacturing of brassware and the notification under consideration was 6079 dated 1.10.1983. In the case of Mansatta Industries Pvt. Ltd. v. State of Gujarat (supra), the dispute relates to the taxability of copper strip. The dispute was whether copper strip falls under the entry "Bar of non ferrous metal and alloys". The Division Bench of Gujarat High Court held that copper strip falls under the entry "Bar of non ferrous metal and alloys". In the case of S/S Amit Udyog v. CTI reported in STI 1999 U.P. Tribunal Moradabad 126 the item in dispute copper sheets and circles used in the manufacturing of brassware. In the Case of CST v. Ruchica Enterprises (supra) the item in dispute was Copper plate electrolytic. The question was whether it was taxable under the entry "copper, tin, nickel or zinc or any alloy containing any of these metals only" or "ware made of any metal or alloy other than brass or aluminium". Learned Single Judge of this Court held that copper plate electrolytic liable to tax under the entry "copper, tin, nickel or zinc or any alloy containing any of these metals . only." In the circumstances, none of the aforesaid decisions cited by the learned Counsel for the applicant are applicable to the present case.

However, in my view, it is doubtful to say that copper busbar which is admittedly used in the telephone exchange is an article used for distribution and transmission of electrical energy. No evidence in this regard has been placed by the revenue. No specific notification of copper busbar has been shown. Thus, it may be treated as unclassified goods. Rate of tax on unclassified goods as well as the article used for distribution and transmission of electrical energy is 10 percent, therefore the levy of tax at the rate of 10 percent is upheld.

In the result, both the revisions have no merit and are, accordingly, dismissed.