REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.  3605  OF 2011

[Arising out of SLP (C) No. 21999/2010]

M/s. Bansal Wire Industries Ltd. & Anr ...Appellants

Versus

State of U.P. & Ors.       ...Respondents

WITH

CIVIL APPEAL NO. 3606 OF 2011 [Arising out of SLP (C) No. 22499/2010]

WITH

CIVIL APPEAL NO. 3607 OF 2011 [Arising out of SLP (C) No. 22218/2010]

WITH

CIVIL APPEAL NO. 3608 OF 2011 [Arising out of SLP (C) No. 23855/2010]

WITH

CIVIL APPEAL NO. 3609 OF 2011 [Arising out of SLP (C) No. 23858/2010]

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WITH

CIVIL APPEAL NO. 3610 OF 2011 [Arising out of SLP (C) No. 24023/2010]

JUDGMENT

Dr. Mukundakam Sharma, J.

1. Leave granted.

2. The issue that falls for consideration in these appeals is, as  

to whether the ‘stainless steel wire’ falls under the category,  

“tools,  alloys  and  special  steels  of  any  of  the  above  

categories”  enumerated  in  entry  no.  (ix)  of  clause  (iv)  of  

Section 14 of the Central Sales Tax Act, 1956 (for short the  

“Central Act”) and therefore the following question emerges  

for our consideration:-  

“Whether stainless steel wire, a product of the  appellant, on a proper reading of Section 14 of  the  Central  Sales  Tax  Act  along  with  the  qualifying words ‘that is to say’ would fall under  the  category  “tools,  alloy and special  steels  of  any  of  the  above  categories”  enumerated  in  entry no. (ix)  of  clause (iv)  or under entry no.  (xv) of same clause (iv)”

3. In  all  these  appeals  identical  issues  are  involved.  We  

therefore,  proceed  to  dispose  of  all  these  appeals  by  this  

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common Judgment and Order.  In order to arrive at a finding  

on the issue raised, it  will  be necessary to set  out certain  

facts leading to filing of the present appeals.  

4. The  appellant  is  a  Public  Limited  Company  incorporated  

under the Indian Companies Act, 1956 and is engaged in the  

business of manufacture and sales of “stainless steel wires”.  

An assessment order was passed under Rule 41(8) of the UP  

Trade Tax Rules for the assessment year 1999-2000 under  

the UP Trade Tax Act, 1948 (for short “the UP Act”) as well as  

under the Central Act.  As per the said assessment order, the  

tax on sales of “stainless  steel wire” was levied @ 4% and  

sales covered by Form 3-kh were taxed @ 2%.   

5. The respondent,  however,  thereafter  held  that  the  sales  of  

“stainless  steel wire” has wrongly been taxed @ 4% treating  

the  same  as  a  “declared  commodity”  and  that  in  fact  

“stainless steel wire” is not a declared commodity because it  

is outside the ambit of “Iron and Steel”, which is a declared  

commodity under Section 14 of the Central Act.   

6. In view of  the satisfaction arrived at by the respondent,  a  

proposal was sent to the Additional Commissioner, Grade-I,  

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Trade Tax,  Ghaziabad Zone,  Ghaziabad requesting him for  

permission  to  re-open  the  case  of  the  appellant  for  the  

assessment year 1999-2000.

7. The Additional Commissioner, Grade-I, Trade Tax, Ghaziabad  

Zone, Ghaziabad issued a notice dated 22.03.2006 directing  

the appellant to show cause as to why the permission should  

not be granted to the assessing authority for re-opening of  

the case under Section 21(2) of the UP Act.   

8. Respondent  No.  3  on  24.3.2006  issued  a  notice  under  

Section 10-B of the U.P. Act for revising the assessment order  

passed  for  the  assessment  year  2000-01.  The  appellant  

states that similar notices for the assessment years 2001-02  

and  2002-03  were  also  issued  to  the  appellant  by  

Respondent No. 3.

9. The appellant filed its reply dated 27.3.2006  to the notice  

dated 24.3.2006 and, inter alia, stated that “stainless steel  

wire” is a declared commodity under clause (iv) of Section 14  

of the Central Act, hence in view of Section 15 thereof, no tax  

can be imposed on the declared commodities in excess of 4%.  

The  appellant  had  also  submitted  identical  replies  to  the  

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notices relating to assessment years 2001-02 and 2002-03  

respectively.

10.After considering the reply as furnished by the appellant, the  

Additional  Commissioner,  Grade-I,  Trade  Tax,  Ghaziabad  

Zone,  Ghaziabad  by  its  order  dated  27.03.2006  granted  

permission  to  the  assessing  authority  to  re-open  the  case  

under Section 21(2) of the UP Act for the assessment year  

1999-2000.

11. Being aggrieved by the issuance of the aforesaid notice, the  

appellant  herein  filed  a  Writ  Petition  before  the  Allahabad  

High Court, which was registered as Writ Petition No. 770 of  

2006, wherein, the respondent filed a counter affidavit.   The  

Allahabad  High  Court,  thereafter  heard  the  counsel  

appearing  for  the  parties  and  by  its  judgment  and  order  

dated 21.05.2010 dismissed the  Writ  Petition  holding that  

the “stainless steel wire” is not covered under the item “tools,  

alloys and special steel”  on entry no. (ix) and, therefore, does  

not fall under “Iron and Steel” as defined under clause (iv) of  

Section 14 of the Central Act and therefore the provision of  

Section 15 of the Central Act does not apply.

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12.Being  aggrieved  by  the  judgment  and  order  dated  

21.05.2010 passed by the Allahabad High Court, the present  

appeals were filed by the appellants on which we heard the  

learned counsel appearing for the parties.

13.The  learned  counsel  appearing  for  the  parties  during  the  

course of their submissions relied upon various notifications,  

some of which are required to be extracted at this stage.   

14. The  first  reference  that  was  made  was  to  the  notification  

dated 26.10.1991.  The aforesaid  notification was issued by  

respondent No. 1 in exercise of powers under clause (d) of  

sub-section (1) of section 3-A of the U.P. Act, whereby under  

Item  7,  Sheets  and  Circles  made  wholly  or  principally  of  

stainless  steel  and  all  remaining  articles  (excluding  wares  

and  surgical  instruments)  made  wholly  or  principally  of  

stainless steel were taxable @ 12%.

The  relevant  part  of  the  said  notification  is  extracted  herein  

below:

“S.No. Description of goods Point of tax    Rate of tax

(a) Sheets and circles made M or I 12%      wholly or principally of      stainless steel.

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(b) All remaining articles M or I 12%     (excluding wares and surgical     instruments) made wholly or     principally of stainless steel.”

15.Subsequently  another  notification  dated  23.11.1998  was  

issued  by  Respondent  No.  1  by  exercising  power  under  

clause (d) of sub-section (1) of section 3-A of the U.P. Act,  

whereby under Item 7, Sheets and Circles made wholly or  

principally  of  stainless  steel  and  all  remaining  articles  

(excluding wares and surgical instruments) made wholly or  

principally of stainless steel were taxable @ 15% and steel  

wires were sought to be taxed @ 15% presuming to be an  

article made of stainless steel.

The  relevant  part  of  the  said  notification  is  extracted  herein  

below:

“S.No. Description of goods Point of tax Rate of tax percentage

(i) Sheets and circles made M or I 15% wholly or principally of stainless steel.

(ii)   All remain articles M or I 15% (excluding wares and surgical instruments made wholly or principally of

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stainless steel.”

16.Later, on 15.01.2000, Respondent No. 1 issued a notification  

superseding  the  notifications  dated  26.10.1991  and  

23.11.1998  respectively,  and  Item  No.  8  of  the  said  

notification  provided for  levy  of  tax  @ 15% on sheets  and  

circles made wholly or principally of stainless steel and also  

all  remaining  articles  excluding  ware  and  surgical  

instruments made wholly or principally of stainless steel @  

15 %.

The  relevant  part  of  the  said  notification  is  extracted  herein  

below:

“S.No. Description of goods Point of tax Rate of tax percentage

8. (i) Sheets and circles made M or I 15%

wholly or principally of stainless steel.

(ii)   All remain articles M or I 15% (excluding wares and surgical instruments) made wholly or principally of stainless steel.”

17. Section 14 (iv) of the Central Act is the relevant provision in  

the  present  appeals  and  we  therefore  extract  the  relevant  

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portion of Section 14 (iv) of the Central Act and the same is  

as under: -  

“14.  Certain goods to be of special importance in  inter-State  trade  or  commerce.  -  It  is  hereby  declared  that  the  following  goods  are  of  special  importance in inter-State trade or commerce, -

     xxxxxxxxxxxxxxxxx

       (iv) iron and steel, that is to say, -

(i)  pig  iron  and  caste  iron  including  ingot  moulds,  bottom, plates,  iron scrap,  caste  iron  scrap, runner scrap and iron skull scrap;

(ii) steel semis (ingots, slabs, blooms and billets  of all qualities, shapes and sizes);

(iii)  skull  bars,  tin  bars,  sheet  bars,  hoe-bars  and sleeper bars;

(iv)  steel  bars  (rounds,  rods,  squares,  flats,  octagons  and  hexagons,  plain  and  ribbed  or  twisted, in coil form as well as straight lengths);

(v)  Steel  structurals  (angels,  joists,  channels,  tees,  sheet  piling  sections,  Z  sections  or  any  other rolled sections);

(vi) sheets, hoops, stripe and skelp, both black  and galvanized, hot and cold rolled, plain and  corrugated, in all  qualities,  in straight lengths  and  in  coil  form,  as  rolled  and  in  riveted  condition;

(vii)  plates  both  plain  and  chequered  in  all  qualities;

(viii) discs, rings, forgings, and steel castings;

(ix)  tool,  alloy and special  steels of any of the  above categories;

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(x)  steel  melting  scrap  in  all  forms  including  steel skull, turnings and borings;

(xi) steel tubes, both welded and seamless, of all  diameters and lengths, including tube fittings;

(xii) tin-plates, both hot dipped and electrolytic  and tin free plates;  

(xiii)  fish  plates  bars,  beaming  plate  barn,  crossing  sleeper  bars,  fish  plates,  bearing  plates,  crossing  sleepers  and  pressed  steel  sleepers, railsheavy and light crane rails;

(xiv) wheels, tyres, axles and wheel sets;

(xv)  wire  rods  and  wires-rolled,  drawn,  galvanized,  aluminized,  tinned  or  coated  such  as by copper;

(xvi) defectives, rejects, cuttings or end pieces of  any of the above categories.”

18. Section 15 of the Central Act is also a relevant provision and  

the same is extracted hereunder :-

“15. Restrictions and conditions in regard to tax on  sale or purchase of declared goods within a State –  Every  sales  tax  law  of  a  State  shall,  insofar  as  it  imposes or authorises the imposition of a tax on the  sale or purchase of declared goods, be subject to the  following restrictions and conditions, namely:-  

(a) the tax payable under that law in respect of any sale  or purchase of  such goods inside the State shall  not  exceed  four  per  cent,  of  the  sale  or  purchase  price  thereof,;

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx”

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19. The Commissioner of Commercial Taxes issued a circular  

on 25.11.2005 to the Joint Commissioner Trade Tax, Ghaziabad  

directing that sale of stainless steel pipe, tubes, sheets shall not  

be taxable as declared goods under Section 14 (iv) of the Central  

Act since stainless steel is an alloy which consists of nickel etc.  

In view of the said circular the Commissioner issued direction  

to the authorities under him for proceeding under Sections 21  

and  10(b)  of  the  U.P.  Act  for  initiating  the  re-assessment  

proceedings for different years.

20. The learned counsel appearing for the appellant submitted  

before us that the “stainless steel wire” is one of the species of  

“Iron and Steel”  and therefore would fall  within the aforesaid  

“declared  commodity”  and  consequently  rate  of  tax  that  is  

leviable  on  the  goods  of  the  appellant  is  4%  as  originally  

assessed by the Department itself.   

21. He  also  submitted  that  the  expression  “Iron  and  Steel”  

mentioned in clause (iv) of Section 14 of the Central Act is a  

genus and “stainless steel wire” being a form of “Iron and Steel”  

is  a  specie  thereof  and  therefore  such  “stainless  steel wire”  

which the appellant produces would come within the expression  

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of  entry  no.  (xv)  stating  words  “wire  rods  and  wires-rolled,  

drawn,  galvanized,  aluminized,  tinned  or  coated  such  as  by  

copper” of any kind of “Iron and Steel” referring to the main  

expression  of  clause  (iv)  and  that  the  Department  had  

committed  an  error  of  law  in  restricting  the  expression  of  

“stainless steel wire” through entry no. (ix), namely, “tools, alloy  

and special steels of any of the above categories”.   

22. He  also  submitted  that  the  Government  of  India  in  its  

Reference No. F No. 24/20/76 ST Department of Revenue and  

Banking dated 17.11.1976 has clarified that stainless steel is a  

type of alloy steel and is, therefore, covered within the definition  

of the term “iron and steel” for the purposes of entry no. (ix) of  

Section 14(iv) of the Central Act. He further submitted that once  

the Central Government has taken a stand, it is not open to the  

authorities of the State Government to take a different view. He  

has also referred to the object and reason for the amendment  

which is referred at page 1338 of Chaturvedi’s Central Sales Tax  

Act, 1956 Vol. I.

23. The aforesaid submissions of the counsel appearing for the  

appellants  were  however  refuted  by  the  learned  counsel  

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appearing for the respondent who relied upon the expression  

“that is to say” as used in clause (iv) of Section 14 of the Central  

Act to contend that the word ‘user’ makes the expression “Iron  

and Steel” exhaustive and restrictive and not an expansive or  

extensive.   

24. He  also  referred  to  the  expression  “of  any of the above  

categories” occurring in entry no. (ix) of clause (iv) of Section 14  

of the Central Act contending inter alia that the said expression  

plays an instrumental role in determining the scope and ambit  

of the aforesaid item.  Relying on the same, he submitted that  

any product of stainless steel is confined within entry nos. (i) to  

(ix) of clause (iv) of Section 14 of the Central Act and it cannot  

be given a wider meaning to include “stainless  steel wire”  in  

entry No. (xv) of clause (iv) of Section 14 of the Central Act. He  

specifically relied upon the decision of this Court in  State of  

Tamil Nadu vs. M/s. Pyare Lal Mehrotra, reported in (1976) 1  

SCC 834.    

25. In the light of aforesaid submissions made by the counsel  

appearing for the parties, we proceed to answer the issue which  

arises for our consideration by recording our reasons therefor.  

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26. In the aforesaid decision in  Pyare Lal Mehrotra (supra)  

the very word “that is to say”, as per Section 14 of the Central  

Act was considered and it was held that originally expression  

“that is to say” is employed to make clear and fix the meaning of  

what is to be explained or defined and that such words are not  

used, as a rule, to amplify a meaning while removing a possible  

doubt  for  which  purpose  the  word  “includes”  is  generally  

employed.  In the context of Section 14 of the Central Act, this  

Court in the said decision held that the expression  “that is to  

say” is used in Section 14  apparently to mean to exhaustively  

enumerate the kinds of goods in a given list. It was also held in  

the  said  decision  that  the  purpose  of  an  enumeration  in  a  

statute dealing with sales tax at a single point in a series of  

sales would, very naturally, be to indicate the types of goods  

each of which would constitute a separate class for a series of  

sales.  In  paragraph  15  of  the  said  Judgment,  this  Court  

observed as under:  

“15. It  appears  to  us  that  the  position  has  been  simplified by the amendment of the law, as indicated  above,  so  that  each of  the  categories  falling  under  “iron  and  steel”  constitutes  a  new  species  of  commercial  commodity  more clearly  now. It  follows  that when one commercial commodity is transformed  

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into  another,  it  becomes a  separate  commodity  for  purposes of sales tax.”

27. Therefore, in view of the position settled by this Court, it is  

clearly established that so far the items as mentioned in clause  

(iv) of Section 14 of the Central Act is concerned,  each of the  

categories  falling  under  “iron  and  steel”  constitutes  a  new  

species and each one of  them is separate  commodity  for  the  

purposes of sales tax.   

28. The expression “of any of the above categories” appearing  

in entry Nos. (ix)  and (xvi)  of  clause (iv)  of  Section 14 of the  

Central  Act  would  indicate  that  they  would  each  be  items  

referred in the preceding items. Therefore, even the expression  

“of any of the above categories” in entry No. (ix) of clause (iv)  

would only  relate  to  steel  and alloy  produced for  any of  the  

materials mentioned in item nos. (i) to (viii).   Thus “stainless  

steel wire” produced by the appellant cannot be read into item  

no.  (xv)  which  reads  as  “wire  rods  and  wires-rolled,  drawn,  

galvanized, aluminized, tinned or coated such as by copper”.  

29. This Court in the case of  Pyare Lal Mehrotra (supra), in  

paragraph 5, observed as under:-  

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“5. It  will  be  seen  that  “iron  and  steel”  is  now  divided  into  16  categories  which  clearly  embrace  widely different commercial commodities, from mere  scrap  iron  and  leftovers  of  processes  of  manufacturing to “wires”  and “wheels,  tyres,  axles,  and wheel sets”. Some of the enumerated items like  “melting  scrap”  or  “tool  alloys”  and “special  steels”  could serve as raw material out of which other goods  are  made  and  others  are  definitely  varieties  of  manufactured goods. If the subsequent amendment  only clarifies the original intentions of Parliament, it  would  appear  that  Heading  (iv)  in  Section  14,  as  originally  worded,  was  also  meant  to  enumerate  separately  taxable  goods  and  not  just  to  illustrate  what is just one taxable substance: “iron and steel”.  The reason given,  in the Statement of  Objects and  Reasons of  the 1972 Act,  for  an elucidation of  the  “definition” of iron and steel, was that the “definition”  had  led  to  varying  interpretations  by  assessing  authorities and the courts so that a comprehensive  list of specified declared iron and steel goods would  remove  ambiguity.  The  Select  Committee,  which  recommended the amendment, called each specified  category “a item no.” falling under “iron and steel”.  Apparently, the intention was to consider each “item  no.” as a separate taxable commodity for purpose of  sales tax. Perhaps some items could overlap, but no  difficulty arises in cases before us due to this feature.  As we have pointed out, the statement of reasons for  amendment spoke of Section 14(iv) as a ‘“definition”  of  “iron  and  steel”.  A  definition  is  expected  to  be  exhaustive. Its very terms may, however, show that it  is  not  meant  to  be  exhaustive.  For  example,  a  purported definition may say that the term sought to  be defined “includes” what it  specifies, but, in that  case, the definition itself is not complete.”

30. It  is  thus  clear,  that  if  the  object  of  newly  substituted  

clause (iv) of Section 14 of the Central Act was to make iron and  

steel  taxable  as  one  substance,  the  item  could  have  been  

“Goods of iron and steel” or, to be more clear, “Iron and steel  

irrespective of change of form or shape or character of goods  

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made out of them”.  The more natural meaning, therefore is that  

each item specified in Section 14(iv) forms a separate species for  

each series of sales.  When one commercial commodity is, by  

manufacturing  process  etc.,  transformed  into  another,  it  

becomes a separate commodity for sales tax purposes.  If iron  

bars  were  drawn  into  “wire”,  such  wire  shall  be  a  different  

taxable commodity.  

31. Parliament can restrict powers of State Government to tax  

“declared  goods”.   Section  2(c)  of  the  Central  Act  defines  

“declared goods” as those declared under Section 14 of Central  

Act  as  ‘goods  of  special  importance  in  Inter  State  Trade  or  

Commerce.  Section 14 of the Central Act gives a list of such  

goods and Section 15 specifies restrictions on power of States to  

tax such goods.

32. This Court in the case of  Rajasthan Roller Flour Mills  

Assn. vs.  State of Rajasthan, reported in 1994  Supp (1) SCC  

413, observed as under:-  

16. ...... “that is to say” assigned in Stroud’s Judicial   Dictionary (Fourth Edn.) Vol. 5 at page 2753 to the  following effect: “That  is  to  say.—  (1)  ‘That  is  to  say’  is  the  commencement of an ancillary clause which explains  the  meaning  of  the  principal  clause.  It  has  the  following properties: (1) it must not be contrary to the  

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principal  clause;  (2)  it  must  neither  increase  nor  diminish  it;  (3)  but  where  the  principal  clause  is  general in terms it may restrict it:.....” 17. ................. “The quotation,  given above,  from  Stroud’s  Judicial   Dictionary shows  that,  ordinarily,  the  expression,  ‘that is to say’ is employed to make clear and fix the  meaning of what is to be explained or defined. Such  words are not used, as a rule, to amplify a meaning  while removing a possible doubt for which purpose  the word ‘includes’ is generally employed ... but, in  the  context  of  single  point  sales  tax,  subject  to  special  conditions  when  imposed  on  separate  categories  of  specified  goods,  the  expression  was  apparently  meant  to  exhaustively  enumerate  the  kinds  of  goods  in  a  given  list.  The  purpose  of  an  enumeration in a statute dealing with sales tax at a  single point in a series of sales would, very naturally,  be to indicate the types of goods each of which would  constitute  a  separate  class  for  a  series  of  sales.  Otherwise,  the  listing  itself  loses  all  meaning  and  would be without any purpose behind it.”

33. It is thus clear, that the language used in entry no. (ix) is  

plain  and  unambiguous  and  that  the  items  which  are  

mentioned there are “tools, alloy and special steel”. By using the  

words “of any of the above categories” in entry Nos. (ix) would  

refer to entries (i) to (viii) and it cannot and does not refer to  

entry  no  (xv).  However,  entry  (xvi)  of  Clause  (iv)  would  be  

included in entry (xvi)  particularly within the expression now  

therein any of the aforesaid categories. Therefore, the specific  

entry “tool, alloy and special steel” being not applicable to entry  

(xv), the contention of the counsel for the appellant has to be  

rejected. It is, therefore, held that the stainless steel wire is not  

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covered within entry (ix) of clause (iv) of Section 14 of Central  

Sales Tax Act.

34. It is a settled principle of law that the words used in the  

section, rule or notification should not be rendered redundant  

and should be given effect  to.   It  is also one of  the cardinal  

principles  of  interpretation of  any statue  that  some meaning  

must  be  given  to  the  words  used  in  the  section.  Expression  

“Wire rods and wires” which is mentioned in item no. (xv) would  

not and cannot cover the expression “tools,  alloy and special  

steels” of entry no. (ix) nor it would refer to the expression “Iron  

and Steel”  as each item used in  entry  nos.  (ix)  and (xv)  are  

independent items not depending on each other at all as has  

been held in the case of Pyare Lal Mehrotra (supra).

35. In arriving  at  the  aforesaid conclusion,  we find support  

from the decision of this Court in  Union of India vs. Hansoli  

Devi reported in  (2002) 7 SCC 273  wherein this Court held  

that it is a cardinal principle of construction of a statute that  

when the language of the statute is plain and unambiguous, the  

court must give effect to the words used in the statute.

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36. Besides, in a taxing Act one has to look merely at what is  

clearly  said and there is  no room for  any intendment.   In a  

taxing statute nothing is to be read in, nothing is to be implied,  

one can only look fairly at the language used.  

37. Therefore, the findings and the decision arrived at by the  

High Court that stainless steel wire is not covered under the  

entry of “tools, alloys and special steels” in entry no. (ix) and,  

therefore, does not fall under “Iron and Steel” as defined under  

Section 14(iv) of the Central Act have to be upheld. Hence, the  

said  commodity  cannot  be  treated  as  a  declared  commodity  

under Section 14 of the Central Act and provision of Section 15  

of the Central Act does not apply to the facts of the present  

appeals.  

38. In our considered opinion, the findings arrived at by the  

High Court does not suffer from any infirmity.  Consequently,  

we find no merit in these appeals and the same are dismissed  

without any order as to costs.

 ............................................J             [Dr. Mukundakam Sharma ]

............................................J

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   [ Anil R. Dave ] New Delhi, April 26, 2011.

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