Case Note & Summary
The dispute pertained to the classification of brass wire manufactured by the assessee under the Uttar Pradesh Sales Tax Act. The Commissioner of Sales Tax filed revision petitions before the High Court of Allahabad contending that brass wire should be classified as 'brassware', while the assessee relied upon a notification dated 6 October 1971 issued under Section 3-A(2) of the Act. The notification entry read: 'copper, tin, nickel or zinc, or any other alloy containing any of these metals'. The High Court proceeded on the basis that brass wire is an alloy of copper and zinc, but rejected the assessee's contention that it was covered by the entry. The High Court emphasised the words 'any of these metals' and observed that if an alloy consisted of more than one of the metals mentioned, it would not be covered. It reasoned that an alloy with copper or tin or nickel or zinc would be covered, but an alloy comprising more than one of these metals was beyond the scope. The High Court also relied upon the subsequent entry in the notification and observed that the use of the word 'all' in that entry and its omission in the relevant entry indicated an intention to confine the lower rate of tax only to those alloys which comprised only one of the metals named. On a plain reading of the entry, the Supreme Court disagreed with the High Court's interpretation. Brass is an alloy that contains copper and zinc. It therefore contains a metal mentioned in the entry. The entry applies to an alloy containing any of these metals, and consequently applies to brass. It is of no consequence that the alloy brass contains more than one of the metals mentioned in the entry. The Court's conclusion was fortified by the decision in M/s Saru Smelting (P) Ltd. v. Commissioner of Sales Tax, Lucknow, 1993 Supp (3) SCC 97, where a similar entry read 'copper, tin, nickel or any other alloy containing any of these metals only'. In that case, the Court held that the emphasis in the entry was either pure copper, tin, nickel or zinc, and if it is an alloy containing two or more metals, it must be an alloy containing these metals only. Since the alloy in that case contained phosphorous, which was not one of the metals mentioned, it fell outside the entry. Brass wire contained only copper and zinc, both specified metals, and therefore fell within the entry. Accordingly, the Supreme Court allowed the appeals, set aside the judgment of the High Court, and dismissed the revision petitions filed before the High Court. No order as to costs was made.
Headnote
A) Sales Tax - Classification of Goods - Brass Wire as Alloy - U.P. Sales Tax Act, Section 3-A(2) and Notification dated 6.10.1971 - The question was whether brass wire manufactured by the assessee was covered under the entry 'copper, tin, nickel or zinc, or any other alloy containing any of these metals'. The High Court held that an alloy containing more than one named metal did not qualify because the word 'all' was omitted. The Supreme Court disagreed, holding that brass is an alloy of copper and zinc, contains a metal mentioned in the entry, and thus is covered; containing more than one named metal is of no consequence. Held, order of High Court set aside, revision petitions dismissed (Paras 1-2). B) Precedent - Interpretation of Similar Entry - Alloy Containing Only Specified Metals - U.P. Sales Tax Act, Section 3-A(2) and Notification dated 6.10.1971 - The Court relied on M/s Saru Smelting (P) Ltd. v. Commissioner of Sales Tax, Lucknow, 1993 Supp (3) SCC 97, where a similar entry 'copper, tin, nickel or any other alloy containing any of these metals only' was interpreted to mean either pure metal or alloy containing two or more of the specified metals only. Since brass contains only copper and zinc, both specified, it fell within the entry. Held, the earlier decision fortified the conclusion that brass wire was covered (Paras 1-2).
Issue of Consideration
Whether brass wire manufactured by the assessee was classifiable under the notification entry 'copper, tin, nickel or zinc, or any other alloy containing any of these metals' issued under Section 3-A(2) of the U.P. Sales Tax Act, rather than as 'brassware'.
Final Decision
Appeals allowed; judgment under appeal set aside; revision petitions filed before High Court dismissed; no order as to costs.
Law Points
- The entry 'copper
- tin
- nickel or zinc
- or any other alloy containing any of these metals' includes an alloy containing more than one of the named metals
- Brass wire is an alloy of copper and zinc and therefore a metal mentioned in the entry
- The omission of the word 'all' in the relevant entry does not confine the lower rate of tax to alloys comprising only one named metal
- An alloy containing two or more specified metals is within the entry if no other metal is present as per Saru Smelting precedent
