JUDGMENT
Padmanabhan, J.
1. The short question that arises in this tax revision case is whether cold rolled steel strips fall within item 4(d)(iv) of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959 (referred to as the Act).
2. The assessee is T.I. & M. Sales Limited, an incorporated company having its registered office at Madras. For the year 1970-71 it was assessed on an escaped turnover of Rs. 29,22,939.06 on the ground that the exemption originally granted to the assessee on the second sale of cold rolled steel strips and metal sections to the tune of Rs. 29,22,939.06 was not correct. The Commercial Tax Officer held that cold rolled steel strips and metal section were not sold by the assessee in the same form in which they were produced by the rolling mills, but they were fabricated materials liable to tax at multi-point and also liable to additional sales tax. The assessee’s claim that the said cold rolled steel strips and metal sections fell within item 4(d)(iv) of the Second Schedule to the Act was not accepted by the Commercial Tax Officer. The appeal filed by the assessee before the Appellate Assistant Commissioner was also dismissed. The further appeal preferred by the assessee before the Sales Tax Appellate Tribunal, Madras, also failed. Accordingly, the assessee has filed this tax revision case.
3. Mr. Varadarajan, the learned counsel for the assessee, submits that cold rolled steel strips fall within item 4(d)(iv) of the Second Schedule to the Act. Item 4(d)(iv) reads as follows :
“4. Iron and steel, that is to say, –
(a) pig iron and iron scrap;
(b) iron plates sold in the same form in which they are directly produced by the rolling mill;
(c) steel scrap, steel ingots, steel billets, steel bars and rods; and
(d) (i) steel plates;
(ii) steel sheets;
(iii) sheet bars and tins bars;
(iv) rolled steel sections; and
(v) tool alloy steel.
Item (i) to (v) sold in the same form in which they are directly produced by the rolling mills.”
4. It may be observed that this item was amended in 1973. We are concerned in this case with the item as it stood prior to its amendment in 1973. Mr. Varadarajan, the learned counsel for the assessee, urged two contentions : (1) The cold rolled steel strips which are subject-matter of assessment to sales tax in these proceedings fell under rolled steel sections referred to in item 4(d)(iv) of the Second Schedule to the Act. (2) The Commissioner of Commercial Taxes, Board of Revenue (C.T.), himself, by his communication L. Dis. A. 4818/62 dated 16th August, 1962, addressed to the assessee, has stated that cold rolled steel strips will fall under item 4(d)(iv) of the Second Schedule to the Act and therefore liable to tax at 2 per cent single point. It may be stated that the cold rolled steel strips are manufactured by the Tube Products of India Limited for being used in the manufacture of various products such as agricultural equipments, cycle parts, cameras and cinematograph items, rolling shutters, sewing machine parts, radio chassis and components, telephones and washing machine components to mention only a few items. The assessee buys these cold rolled steel strips from the Tube Products of India Limited in the same form in which they are manufactured and sells the same to their customers. The learned counsel for the assessee produced before us for our inspection a sample of the cold rolled steel strips. We are satisfied that the cold rolled steel strips sold by the assessee do fall under rolled steel sections referred to in item 4(d)(iv) of the Second Schedule to the Act. The word “section” is explained as meaning a division or a portion or one of the parts into which anything may be considered as divided or of which it is built up. Therefore, the cold rolled steel strips marketed by the assessee can only fall within the meaning of rolled steel sections in item 4(d)(iv) of the Second Schedule to the Act.
5. In Vaiswaner Trading Co. v. State of Gujarat [1964] 15 STC 586 the Gujarat High Court held as follows :
“Where pieces of rolled steels sections are jointed together by rivetting, they still retain the same form in which rolled steel sections are directly produced by the rolling mills within the meaning of entry 4 in Schedule AA of Bombay Sales Tax Act, 1953. Therefore rivetted baling hoops, which are nothing but pieces of rolled steel sections joined together by rivetting, fall within that entry.”
6. In this connection, the learned Judges observed as follows :
“By the very nature of the subject-matter no straight jacket formula can be deviced or even contemplated which would take in all cases covered by the entry and yet not leave out some. Human ingenuity is so great and so numerous are the ways in which having regard to scientific and technological process articles like rolled steel sections can be made use of that we think it would be unwise to formulate, even if we could, an inclusive or exclusive test defining the content of the entry in so far as it relates to rolled steel sections sold in the same form in which they are directly produced by the rolling mills.”
7. In Commissioner of Sales Tax v. Ashwini and Co. [1973] 32 STC 618, a Bench of the Allahabad High Court had to consider the question whether iron hoops were covered by the term “iron and steel” mentioned under section 14(iv)(d)(iv) of the Central Sales Tax Act. It may be mentioned that section 14(iv)(d)(iv) of the Central Sales Tax Act referred to rolled steel sections. The learned Judges held that all that was necessary to bring the article within the meaning of section 14(iv)(d)(iv) of the Central Sales Tax Act was to establish that the article was rolled steel section. The learned Judges however did not answer the question either way because there was no material before them to decide how the iron hoops in question were manufactured.
8. The learned Additional Government Pleader for the department strongly relied upon the decision of the Madhya Pradesh High Court in Commissioner of Sales Tax v. Hirji Nainsee & Co. [1972] 29 STC 365. In the said decision, the Madhya Pradesh High Court held that iron hoops which are thin straps of steel used for tying big bundles of bales of cotton or other material to keep the bundles in shape, are not included in the definition of “iron and steel” as given in clause (iv) of section 14 of the Central Sales Tax Act, 1956. Even though in this case we are not concerned with the question whether iron hoops with which the Madhya Pradesh High court was concerned in the said decision, we are unable to adopt the reasoning of the learned Judges in holding that iron hoops do not fall within the category of rolled steel sections in section 14(iv)(d)(iv) of the Central Sales Tax Act. The learned Judges have observed :
“The only rational meaning that can be given to the entry ‘rolled steel sections’ is to say that it refers to certain well designed parts which can be used for structural construction. Iron hoops are obviously not used for such a purpose.”
9. The construction placed by the learned Judges on the words “rolled steel sections” found in section 14(iv)(d)(iv) of the Central Sales Tax Act is not, if we may say so with respect, warranted. There is absolutely no reference at all in the entry as regards the use to which the steel sections are to be put. In the circumstances, any meaning that has to be given to the words “rolled steels sections” as found either in the Central Sales Tax Act or the Tamil Nadu General Sales Tax Act or the consideration of the question whether any article falls within the meaning of the words “rolled steel sections” found in section 14(iv)(d)(iv) or item 4(d)(iv) of the Second Schedule to the Act does not depend upon the user to which the rolled steel sections are put. In fact, in this context we are in agreement with the following observations made by the Allahabad High Court, with reference to the decision of the Madhya Pradesh High Court, in Commissioner of Sales Tax v. Ashwini and Co. [1973] 32 STC 618 :
“With utmost respect, we are unable to subscribe to the view of the Madhya Pradesh High Court, which restricts the category of rolled steel sections to only such articles as can be used for structural constructions. There is nothing in the language of section 14(iv)(d)(iv) of the Central Sales Tax Act which warrants such a conclusion. In fact, there is not mention in the section of the purpose for which the various items mentioned therein are to be put. As we read section 14(iv)(d)(iv), all that is necessary is that the article in question should be rolled steel section and once that is established, the use for which it may be put is wholly immaterial.”
10. The learned Additional Government Pleader emphasised upon the fact that even if it is accepted that the rolled steel strips dealt with by the assessee fall within the meaning of rolled steel sections in item 4(d)(iv) of the Second Schedule to the Act, it is also necessary that they should be sold by the assessee in the same form in which they are directly produced by the rolling mills. Mr. Varadarajan, the learned counsel for the assessee, stated that the rolled steel strips are being obtained by the assessee from the Tube Products of India in the same form in which they are produced by the rolling mills and sold as such. There is no material to controvert this fact. In the circumstances, we accept the position that the last limb of the requirement of item 4(d)(iv) of the Second Schedule to the Act is satisfied in this case.
11. The learned Additional Government Pleader then drew our attention to a Bench decision of this Court in T.C. No. 144 of 1973 (T.I. & M. Sales Ltd. v. State of Tamil Nadu) in which the present assessee was the petitioner. There, the question was whether the tubes made out of steel strips and coils could be brought within the meaning of iron and steel under section 14(iv)(d)(iv) of the Central Sales Tax Act. There, the steel strips and coils were being manufactured by M/s. Hindustan Steel Limited. The Tube Products of India purchased steel strips and coils from Hindustan Steel Limited and manufactured tubes out of them and sold the tubes made out of steel strips and coils to the assessee. The assessee claimed exemption in respect of the sale of the tubes on the ground that the sales were second sales of declared goods and therefore they were not liable to tax. This Court held against the assessee and dismissed the tax revision case. The decision of the Gujarat High Court in Vaiswaner Trading Co. v. State of Gujarat [1964] 15 STC 586 was cited on behalf of the assessee before the learned Judges. The leaned Judges referred to the facts that the question that arose for consideration before the Gujarat High Court was whether rolled steel section which was joined together by rivetting still retained the same form in which they were directly produced by the rolling mills or they became a different commercial commodity. The learned Judges further held that it was not argued before them and that it could not have been argued that the material out of which steel tubes were made fell within section 14(iv)(d)(iv) of the Central Sales Tax Act, 1956. We are therefore of the view that the question that arose for consideration before the Bench in T.I. & M. Sales Ltd. v. State of Tamil Nadu (T.C. No. 144 of 1973) was entirely different and the said decision has no bearing to the question which arises for consideration in this case.
12. We therefore hold that the cold rolled steel strips marketed by the assessee fall within item 4(d)(iv) of the Second Schedule to the Act.
13. The second contention urged by Mr. Varadarajan was that the Commissioner of Commercial Taxes, Board of Revenue, Madras, has in his communication dated 16th August, 1962, ruled tat cold rolled steel strips will come within item 4(d)(iv) of the Second Schedule to the Act and therefore the respondent cannot now go back on the ruling given by them regard to the cold rolled steel strips sold by the assessee. The learned counsel further argued that on the face of the ruling given by the Commissioner of Commercial Taxes the assessee had not collected sales tax on the cold rolled steel strips marketed by them and consequently the respondent must be barred under the principle of promissory estoppel from asserting that cold rolled steel strips do not fall within item 4(d)(iv) of the Second Schedule to the Act. In this context, the learned counsel referred to the decision in Motilal padampat Sugar Mills Co. Ltd. v. State of U.P. . On the contrary, the learned Additional Government Pleader stated that the Government is not bound by the circulars issued by the departmental authorities and in this context relied upon the decision in Subbier v. State of Madras [1973] 31 STC 205. In the view we have taken on the merits that cold rolled steel strips sold by the assessee do fall within the meaning of rolled steel sections referred to in item 4(d)(iv) of the Second Schedule to the Act, it is unnecessary for us to rest our decision on any answer that may be arrived at on a consideration of the second of the contentions urged by Mr. Varadarajan. In the Circumstances, we leave the second question urged by Mr. Varadarajan, open.
14. The result is, the order of the Appellate Tribunal is set aside and the tax revision case is allowed. The assessee will be entitled to its costs. Counsel’s fee Rs. 250.