Holding

Copper sheets and brass sheets are covered by entries 116A and 1160 and are liable to tax at the rate of 8% on turnover.

Summary

Kalidas Sheet Metal Industries Ltd., a dealer in copper and brass sheets, was assessed tax at 8% on its turnover for 1984-85 and 1985-86 under entries 116A (copper) and 1160 (brass) of the Kerala General Sales Tax Act, 1963. The company contended that sheets are "unclassified" items taxable at 5% and that the entries apply only to virgin copper and brass in solid form, not to sheets. The Assessing Officer, the Deputy Commissioner (Appeals), the Kerala Sales‑Tax Appellate Tribunal and the High Court all upheld the tax. The Supreme Court examined whether the words "copper" and "brass" in the entries include sheets, and held that they do, as copper and brass are metals that exist in solid form and are commercially sold as sheets, circles, ingots, etc. The 1982 Government Order pertained only to the pre‑April‑1984 regime and does not affect the post‑amendment entries introduced by the Finance Act, 1984. Consequently, the appeals were dismissed and the tax at 8% was affirmed.

Issues considered

Do copper sheets and brass sheets fall within the scope of entries 116A and 1160 of Schedule I of the Kerala General Sales Tax Act, 1963?
Should the turnover from sale of such sheets be taxed at the rate of 8% rather than the 5% rate applicable to unclassified items?

Legislation cited

Finance Act, 1984
Kerala General Sales Tax Act, 1963s. Schedule I Entry 1160, s. Schedule I Entry 116A, s. Section 5

Subjects

Kerala General Sales Taxcopper sheetsbrass sheetstax classificationunclassified itemsSchedule I entriesinterpretation of statutessales tax

Judgment

[2008] 3 S.C.R. 610
.-
A MIS. KALIDAS SHEET METAL INDUSTRIES P. LTD.
v.
STATE OF KERALA
(Civil Appeal No. 2789 of 2002)
FEBRUAR'( 28, 2008
B ,
(ASHOK BHAN AND J.M. PANCHAL, JJ.)
••
Kera/a General Sales Tax Act, 1963 - Schedule I Entry
Nos. 116A and 1160 - Copper and Brass sheets -Tax levy-
c By treating them falling under the entries - Propriety of- Held:
Tax rightly levied by treating them as items under the entries
- The words 'Copper' and 'brass' occurring in the respective
entries, would take within its sweep the 'sheets' thereof
Appellant-Company was a dealer of Copper sheets
D and Brass sheets. For the assessme11t years 1984-85 and
1985-86, the Assessing Officer assessed the turnover of
the above-mentioned, at the rate of 8%, holding that the
- ..
same were covered by Entry Nos.116A and 116D of the
Schedule I to Kerala General Sales-Tax Act, 1963. It rejected
E the plea of the assessee that the sheets were unclassified
!terns and thus taxable at the rate of 5%. The order of
assessing authority was upheld upto High Court.
In appeal to this Court the common contention in
both the appeals, on the part of the appellants was that
F
Entries 116A and 116D took within their sweep only virgin
copper and brass in solid forms, but not in the form of
sheet.
Dismissing the appeals, the Court
G HELD: 1.1 Copper Sheets and Brass Sheets in which
the appellant deals would fall within the scope of Entries
No. 116A and 116D liable to be taxed at the rate of 8% of
the turnover. Entry 116A deals with copper whereas Entry

H 610
M/S. KALIDAS SHEET METAL INDUSTRIES P. LTD. v. 611
..., STATE OF KERALA

1160 deals with Brass. There is no manner of doubt that A
Copper and Brass are metals. In ordinary temperature and
pressure these metals occur in solid form. The fact that
commercially, these metals are produced in rolling mills
in the form of sheets, circles, ingots, strips or rods is not
in dispute. It is also not in dispute that copper and brass B
being metals in solid form, are available in the market in
.. one of the above forms only. Therefore, it cannot be said
that the words 'copper' and 'brass' occurring in Entry 116A
and 1160 would not take within its sweep Copper Sheets
and Brass Sheets. [Paras 9 and 6) [614-C, 0, E; 616-B] c
1.2 The clarification made by the State Government
in Government Order dated August 4, 1982 specifying that
Copper, Brass and Zinc Sheets, circles, ingots, flats and

.. -·
rods were treated as unclassified items, related to the
position prior to 01-04-84. This clarification was with D
reference to Entry No. 121 which dealt with metallic .
products and did not relate to Copper and Brass sheets.
Schedule I to the Act was amended by Finance Act, 1984
and along with other entries, Entries No. 11 SA and 1160
were introduced with effect from 01-04-84 to bring in E
metals like copper and brass. The clarification made by
the Government would go to show that Copper and Brass
Sheets, circles, ingots etc. are not Copper or Brass
,.. products. If these items are not Copper or Brass products
the same will have to be regarded as Copper and Brass F
metals falling within the ambit of Entry No. 116A and 1160.
[Para 7) [614-G; 615-AB]
Hindustan Aluminium Corporation Ltd. v. State of Uttar
Pradesh and Anr. (1981) 3 SCC 578 - distinguished
G
State of M.B. vs. Hirala/ (1966) 2 SCR 752- referred to

..., CIVILAPPELLATE JURISDICTION: Civil Appeal No.2789
of 2002.
From the final Judgment and Order dated 12/12/2001 of
1-1
612 SUPREME COURT REPORTS [2008] 3 S.C.R.
.....
A the High Court of Kerala at Ernakulam in T.R.C. No. 10/2001.
WITH

Civil Appeal No. 4158 of 2003.

T.L.V. Iyer, Subramonium Prasad, Jay Kishore Singh and
B Vivek Gupta for the Appellant.

K. Radhakrishnan, P.V. Dinesh for the Respondent. .. •
The Judgment of the Court was delivered by

c J.M. PANCHAL, J. 1. These appeals are directed against
Judgments rendered by High Court of Kerala at Ernakulam in
Tax Revision Case No. 467 of 2000 and 10 of 2001 by which
the view taken by the Assistant Commissioner (Assessment)
Sales-Tax Office Cochin and confirmed by Additional Deputy-
Commissioner (Appeals) 11, as well as The Kerala Sales-Tax
D
Appellate Tribunal that the Copper Sheets and Brass Sheets in
which the appellant deals fall within the ambit of Entries No.
.. ..
116A and 1160 which provide tax at the rate of 8% on the total
turnover, of Copper and Brass respectively, is upheld.

E 2. The appellant company is a dealer registered under the
provisions of the Kera la General Sales-Tax Act. 1963 (the 'Act'
for short). It inter-alia deals in Copper Sheets and Brass Sheets.
While completing the assessment for assessment years 1984-
85 and 1985-86, the Assessing Officer assessed the turnover
F of Copper Sheets and Brass Sheets at the rate of 8% holding
that the same are covered by Entries Nos. 116A and 1160 of
the Schedule I to the Act which provide tax on turnover of Copper
and Brass respectively. The Assessing Authority rejected the
claim of the appellant that copper sheets and brass sheets are
G unclassified items taxable at the rate of 5%. In appeals, the
Deputy-Commissioner (Appeals) confirmed the rate of tax in
respect of those items. Feeling aggrieved, the appellant filed
second appeals before the Kera la Sales-Tax Appellate Tribunal. ~

The Tribunal dismissed the appeals upholding the view taken
by the Assessing Officer and the Appellate Authority Thereupon
H
M/S. KALIDAS SHEET METAL INDUSTRIES P. LTD. v. 613
..... ... STATE OF KERALA [J.M. PANCHAL, J.]

the appellant invoked the revision aI jurisdiction of the High Court A
by filing T. R. C. No.467 of 2000 and 10 of 2001. The High Court
has dismissed the same by giving rise to the instant appeals.
3. This Court has heard the learned counsel for the parties
at length and in great detail. This Court has also considered the
documents forming part of the instant appeal. B
... 4. The common contention of the appellant in both the
Ill: appeals is that Entries No. 116A and 1160 take within their
sweep only virgin copper and brass in solid form but not Copper
Sheets and Brass Sheets and therefore tax at the rate of 8% on
the turnover, could not have been levied.
c
5. In order to determine the question posed for
consideration of this Court, it would be advantageous to refer
to the entries in question. Aluminium, Tin, Copper, Brass etc.
are classified under the general head 'Non-ferrous metals' which D
comprises Entries 115 to 116G. The relevant Entries read as
" "' under:-
"Non-Ferrous metals
115. Aluminium, aluminium alloys At the point of E
and all articles made of first sale in
aluminium or/and aluminium the State by
alloys. a dealer who is
.. liable to tax under
Section 5.
F
6
116. Tin including tin sheets and
tin plates do. 8
116A Copper At the point of first
sale in the State by a G
dealer who is liable
to tax under Section
.... _., 5. 8
116B. Zinc At the point of first
sale in the State by a H
614 SUPREME COURT REPORTS (2008) 3 S.C.R.
~ .....
~

A dealer who is liable
to tax under Section
5. 8
116C. Manganese do. 8

B 1160. Brass do. 8
116E. Bronze do. 8 ..
116F. Magnesium do. 8
116G. Forrosilicon do. 8"
c
6. A bare perusal of the above quoted Entries makes it
clear that Entry 116A deals with copper whereas Entry 1160
deals with Brass. The short question which arises for
determination of this Court is whether the Copper Sheets and
Brass Sheets would fall under the Entry 116A and 1160
0
respectively. There is no manner of doubt that Copper and Brass
? 4.
are metals. In ordinary temperature and pressure these metals
occur in solid form. The fact that commercially, these metals
are produced in rolling mills in the form of sheets, circles, ingots,
strips or rods is not in dispute. It is also not in dispute that copper
E
and brass being metals in solid form, are available in the market
in one of the above forms only. Therefore, the argument of the
appellant that the words 'copper' and 'brass' occurring in Entry
116A and 1160 would not take within its sweep Copper Sheets
and Brass Sheets, cannot be accepted.
F
7. From the record of the case, it is evident that the
appellant had relied upon Government Order dated August 4,
1982 to contend that Copper, Brass and Zinc Sheets, circles,
ingots, flats and rods were treated as unclassified items and
therefore would not fall within Entry 116A and 1160. On perusal
G
of the said Order this Court is of the opinion that the clarification
made by the State Government related to the position prior to
01-04-84. This clarification was with reference to Entry No. 121 .• ,...
which dealt with metallic products and did not relate to copper
and brass sheets. Schedule I to the Act was amended by Finance
H
M/S. KALI DAS SHEET METAL INDUSTRIES P. LTD. v. 615
""'. STATE OF KERALA [J.M. PANCHAL, J.]

Act, 1984 and along with other entries, Entries No. 116A and A
116D were introduced with effect from 01-04-84 to bring in
metals like copper and brass. In fact, the clarification made by
the Government weakens the case of the appellant. The
clarification made by the Government would go to show that
Copper and Brass Sheets, circles, ingots etc. are not Copper B
or Brass products. If these items are not Copper or Brass
"' products the same will have to be regarded as Copper and
Brass metals falling within the ambit of Entry No. 116A and
1160.
8. The reliance placed by the learned counsel for the c
appellant on the decision of the Supreme Court in Hindustan
Aluminium Corporation Ltd. Vs. State of Uttar Pradesh and
Anr. (1981) 3 sec 578 to contend that Copper Sheets and
Brass Sheets are distinct commercial items from Copper and
Brass and, therefore, would not fall under Entries 116A and D
; """;
116D, is misplaced. In the said case the appellant was carrying
on the business of manufacturing and dealing in Aluminium
metal as well as various aluminium products. The State
Government had issued several Notifications from time to time
which indicated that the expression 'Metal' had been generally E
employed to refer to the matter in its primary sense i.e. the metal
in the form in which it is marketable as a primary commodity. In
these circumstances, the subsequent forms evolved from the
~. primary form and consisting distinct commodities marketable
were regarded as new commercial commodities. As observed F
earlier Copper and Brass metals are produced in rolling mills
in the form of sheets, circles, ingots, strips or rods and are
available in the market in one of the above forms only as the
metals are in solid from. Therefore, the principle laid down by
the Supreme Court in Hindustan Aluminium Corporation
G
Ltd. (Supra) cannot be made applicable to the facts of the
instant case. This Court notices, that in the State of M.B. vs.
-"'(
' Hiralal(1966) 2 SCR 752 this Court held that scrap iron when
"'
put through the process of re-rolling to produce attractive and
acceptable forms of iron and steel in the shape of bars, flats
H
'·
616 SUPREME COURT REPORTS [2008] 3 S.C.R.

A and plates, must be regarded as continuing to be "iron and steel"
for the purpose of the notificatiosn issued under the Madhya
Bharat Sales Tax Act.
9. Having regard to the nature of evidence produced
before the Assessing Authority in both the cases, the Court is of
B the opinion that the Authorities below as well as the High Court
were justified in concluding that Copper Sheets and Brass ..
Sheets in which the appellant deals would fall within the scope
of Entries No. 116A and 1160 liable to be taxed at the rate of
8% of the turnover.
c
10. No case is made out by the appellant to interfere with
the view taken by the High Court and therefore the appeals must
fail.
11. Therefore, the appeals fail and are dismissed.
D
There shall be no order as to cost.
K.K.T. Appeals dismissed.

....