High Court · 2025

Counsel for the Respondent (in both) : SRI PASAM SRINIVASA REDOY The Court made the foltowing: COMMON OROER THE HON'BLE SRI JUSTTCE T. VINOD I(TIMAR AND THE HON'BLE SMT JUSTICE P.SREE SI'DIIA TRC. Nos. 75 and 8L of 2OO4 COMMON ORDER'.tper tle Hon'ble Si Justice T.Vinod Kumar) Since both these Tax Revision Cases arise out of the common order of the Sales Tax Appellate Tribunal (for short 'the Tribunal'), dt.31.12.2OO3 in TA.No.133 & 134 of 1999, for the assessment years 1991-92 arLd 1992-93 under the provisions of APGST Act, 1957 (for short 'the ActJ, the same are being disposed of by this common order.

2. Heard learned Special Standing Counsel appearing on behatf of petitioner-S tate, learned counsel appearing for respondent in both the TRCs, and perused the record.

3. These revisions are hled at the behest of the State being aggrieved by the order of the Tribunal, whereby tJle Tribunal had held that the sponge iron purchased by the petitioner is not classihable under Entry 2A of the Schedule-Ill to the Act, and consequently not taxable at purchase point.

4. On behalf of the State it is contended that the Tribunal erred in setting aside the revisional orders of the jurisdictional Depr,rty Commissioner without appreciating that the issue under consideration beforc [he Deputy Commissioner was altogether 2 different than the issue under consideration in revision proceedings.

5. On behalf of the State it is also contended that the Tribunal having held that sponge iron is not liabte to tax at the last purchase point i.e., in the hands of the appellant, ought to have remanded the matter back to the assessing authority to levy tax on the resultant steel ingots, billets/steel structures, etc., manufactured by the assessee instead of holding that the set-off of ta-x already paid on sponge iron should not be given, and thus, committed error in not following its own order in TA.No.668/ i995, dt. IO.O8.1999 passed in assessee,s own case.

6. Per contra, learned counsel appearing on behalf of respondent would submit that the Tribunal in TA.No.133/ 1999 had followed its Full Bench decision in appellant,s own case in TA.No668/ 1995,dLmJ&Iq99, Ior the aSsessmerit yeEr t99O- 91, wherein it was held that the sponge iron does not fall either under Entry 24. or Entry 2(xvi) or Entry 2(i) of the Schedule-lll to the Act, and therefore the local purchase turnover is not entitled to set off in terms of G.O.No.763, Rev.(CT_ II),dt.21.08.199O, however, had directed for the exclusion of turnover on whictr purchase tax was levied from the net taxable turnover by granting consequential relief ol tax. 3

7. On behalf of the respondent it is further contended tJ-at since, the revisional authority while passing the imptrgned order had erroneously added the local purchase of sponge iron to the ne t turn over by claiming that purchase of sponge iron is liable to taxed at the point of last purchase i.e., in the hands of the assessee, the order of the Tribunal in directing for exclusion of the aforesaid turnover to determine the net taxable turnover and also to calculate the set-off afresh in terms of G.O.763, does not call for any interference, much less gives rise to any question of law.

8. On behalf of the respondent-assessee, it is also contended that insofar as the assessment year 1992 93 is concerned, since, the Tribunal had held that the issue with regard to taxability of local purchase of sponge iron having been adjudicated in TA.No. l33l 1999, the revision relating to the assessment year 1992-93 is without any legal foundation and thus, having annulled the said revision, the same does not give rise to any question of Iaw for the petitioner-State to hle the present Revision before this Court.

9. We have taken note o[ the respective submissions made. ) )

10. Firstly, the issue for consideration before the Tribunal is as to whether the purchase of sponge iron by the respondent- 4 assessee in the State is liable to be taxed under Entry 2A of the Schedule-lll to the Act in the hands of the respondent-assessee being the last purchase.

11. The Tribunal by following the decision of the Full Bench rendered in TA.No.668/1995, dr.tO.O8. 1999 for rhe year t99O- 91, had held that the Entry 2A of Schedule-[l to the Act does not cover within its ambit sponge iron.

12. The Full Bench of the Tribunat also took a similar view ui.de its order in TA.Nos. 1O12l 1987 and 936/gAT, dt. I6.07. 1990.

13. The said order of the Tribunal attained tinality with regard [o the classificat ion of sponge iron.

14. Since, the Tribunal in the facts of the present case had only followed the Futt Bench decision in the aforementioned cases, it cannot be said that the Tribunal l-raving erred in holding that the purchase of sponge iron by the respondent- assesflbei.rg liable to tax at the point of last purchase for the revisiona[ authority to include the purchase turnover while determining thc net taxable turnover. I 5

15. Thus, the Tribunal has rightly held that the purchase turnover of sponge iron has to be excluded while determining the net taxable turnover of the respondent-assessee.

16. Though on behalf of the revision petilioner-State it is contended that the Tribunal ought not to have directed reworking of the set-off in terms of G.O.No.763, after excluding the local purchases from the net taxable turnover, it is to be noted that since, the goods, namely spo4ge iron, purchased by the respondent-assessee are held to be not falling under Entry 2A ot the Schedule-lll to the Act and inasmuch as there is no other corresponding entry, the same would have to be classified as general items falling under Schedule-Vll to the Act, being Iiablc to tax at the point of first sale in the State,

17. Since, the sale of sponge iron is not f-trst sale in the hands of the respondent-assessee, there would be no liability on the assessee to pay tax on its purchases, as the said sponge iron purchased by the respondcn t-assessee is used in the manufacture of billets, steel ingots/ structures.

18. lnsofar as the benefit of set-off under G.O.No.763 is concerned, since, the aforesaid GO allows set-off of tax paid on steel scrap items finding place in sub-entries(vi) o[ Entry 2 and Dntry 2A of Schedule-lll to the Act, and as the sponge iron is ) 'J \-\- 6 not classiflable under any of the two entries, the tax paid on purchase of sponge iron is not eligible for set-off in terms of G.O.763, and it is for the said reason, the Tribunal while holding that purchase of sponge iron by the respondent_ assessee would not be liable to tax in its hands under Entry 2A of the Schedule-Ill to the Act, had directed that the turnover relating to purchase needs to be excluded from determination of net taxable turnover and thereafter rework the set_off by excluding the tax paid on such purchase of sponge iron.

19. The said conclusion arrived at by the Tribunal in the considered view of this Court does not suffer from any perversi$r or error for the revision pe titioner-State to feel aggrir:ved or the said order of the Tribunat giving rise to question of law, for the State to hle the present Revision.

20. Furthcr, since it is not shown to this Court of the Full Bench order ol the 'l'ribunal in TA.Nos.1O 12l LggT and 936/ 1987 , dt. I6.07.199O, being subjecr matter of any revision before this Court, this Court is of the view that the petitioner- State is required to maintain consistency even though the principle of res judicata does not strictly apply in tax matters. 2l . Accorclingly, both thc TRCs are devoid of merit and are dismissed. No order as to costs. \ 7

22. Consequently, miscellaneous petitions pending, if any, shall stand closed in the light of this Iinal order. //TRUE COPY// DI K. SRINIVASA RAO JOINT REGISTRAR SECTION OFFICER To, I 2 3 4 5 6 Ks/gh The Sales Tax Appellate Tribunal, A.P. Hyderabad The Deputy Commissioner (CT), Hyderabad Rural Division, Hyderabad The Commercial Tax Officer, Nacharam, Hyderabad One CC to Special G.P for Taxes, Advocate (OPUC) One CC to Sri Pasam Srinivasa Reddy, Advocate (OPUC) Two CD Copies h Records) HIGH COURT I DATED:28 tOSt2OZs ra\ ':r.' I o ) t t) '+ ,a.r Q\. a (\ 0 5 AUE 2025 P4ICHtn {e ) COMMON ORDER TRC.No.7S AND 81 ot 2OO4 DISMISSING THE TRCs WITHOUT COSTS or-l