R.J. Bhave, J.
1. At the instance of the Commissioner of Sales Tax, M.P., the Board of Revenue has referred the following question for our decision:
Whether under the facts and circumstances of the case, the Tribunal was legally justified in treating iron baling hoops as falling within the scope of 'iron and steel' as defined in Section 14 of the Central Sales Tax Act, and as such liable to be taxed at 2 per cent, up to 30th June, 1966, and 3 per cent, thereafter ?
The assessee, M/s Hirji Nainsee and Co., Ujjain, uses iron baling hoops as packing materials for preparing cotton bales. Section 15 of the Central Sales Tax Act, 1956, provides that the sales tax law of a State shall not levy on the declared goods a tax at a rate higher than 2 per cent, which rate was subsequently altered to 3 per cent. Section 8(2) of the said Act provides that the tax payable by any dealer on his turnover on the sales of goods in the course of inter-State trade or commerce shall be calculated at the rate applicable to the sale or purchase of such goods inside the appropriate State if the sales are with respect to the declared goods. Thus, even under the Central Sales Tax Act the tax leviable on the iron hoops would be two per cent, or three per cent., as the case may be, if they are included in the 'declared goods'. Section 14 of the Central Sales Tax Act declares the goods considered as of special importance in inter-State trade or commerce. Clause (iv) of Section 14 is to the following effect:
(iv) 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 ;(d) (i) steel plates, sold in the same form in(ii) steel sheets, which they are directly(iii) steel bars and tin bars, produced by the rolling(iv) rolled steel sections, mill;(v) tool alloy steel;
It is clear from the abovesaid clause that if the iron hoops come within any of the items (a) to (d), in that case alone they can be taxed during the inter-State trade at 2 per cent, or 3 per cent., as the case may be ; otherwise they will be taxed at the rate prescribed under Clause (b) of Sub-section (2) of Section 8 of the Central Act.
2. A look at Clause (iv) of Section 14 of the Central Sales Tax Act would show that, if at all, the iron hoops can come within item (iv) of Clause (iv)(d), viz., 'rolled steel sections'. No other entry in Clause (iv) of Section 14 can, by any stretch of imagination, apply to iron hoops. It appears that at one time the iron hoops were treated by the sales tax department to be falling within Clause (iv) of Section 14. There was some doubt as to how many articles fell within that list, The Government of India, therefore, circulated a letter in which certain items were mentioned as coming within Clause (iv) of Section 14. As 'iron hoops' were not included in that list, the sales tax department started recovering sales tax at higher rate prescribed under Section 8(2)(b). When the matter was taken to the Board of Revenue, it appears that the counsel for the sales tax department admitted that when the iron hoops were treated as declared goods, the amount of tax would not exceed the limit prescribed, under Section 15 of the Central Sales Tax Act and that the tax on iron hoops should have been levied at 2 per cent, on sales up to 30th June, 1966, and 3 per cent, afterwards instead of 10 per cent, as was done by the assessing authority.
It appears that on the abovesaid concession it was held by the Board of Revenue that the iron hoops should be assessed at 2 per cent, or 3 per cent., as the case may be.
3. The Board of Revenue, however, referred the abovesaid question for our decision.
4. It must be observed at the outset that the concession made by the counsel for the department was misinterpreted. The concession was, really speaking, to this effect that if the iron hoops were treated as declared goods, they could not be taxed at a higher rate than 2 per cent, or 3 per cent., and nothing more. It was not a concession to the effect that the iron hoops came within the definition of 'iron and steel' given in Clause (iv) of Section 14 of the Central Sales Tax Act. It must also be observed that any circular letters issued by the Government of India cannot be binding on the sales tax authorities, nor on this court, in interpreting Clause (iv) of Section 14. The expression used 'that is to say' in Clause (iv) of Section 14 clearly indicates that no other item not mentioned under that clause could be treated as 'iron and steel' even if it is made of iron or steel. We have already mentioned that iron hoops cannot be included in Sub-clauses (a), (b) and (c) of Clause (iv) of Section 14 of the Central Act. The only sub-clause that can be usefully considered is Sub-clause (d). The first two items, namely, 'steel plates' and 'steel sheets' do not apply to iron hoops. Similarly, the entry regarding 'steel bars and tin bars' is inapplicable. The only entry that can be considered is entry (iv) below Sub-clause (d), viz., 'rolled steel sections'. The word 'rolled' indicates that in the manufacture of the articles the iron or steel is moved to and fro in order to give that particular article the desired shape. The decision would, therefore, depend on the interpretation of the word 'sections'. In Concise Oxford Dictionary the word 'section' is defined to mean, among other things, 'part cut off from something, one part of a structure such as boat or wooden house that is made in parts for transportation, one of the minor sub-divisions of a book etc.' It is also defined as 'thin slice cut from something for examination with microscope'. In the Advanced Learner's Dictionary of Current English by Hornby, published by Oxford University Press, the word 'section' is defined as 'part cut off; slice; one of a number of parts which can be put together to make a structure'. It would be stretching the language too much to say that iron hoops are slices of iron. The only rational meaning that can 'the 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. Iron hoops are thin straps of steel used for tying big bundles of bales of 14 of the Central Sales .Tax Act. They are consequently chargeable'at the rate specified in Section 8(2)(b) and not under Section 8(2)(a) of the Act.
5. For the abovesaid reasons, the answer to the question is that the Tribunal was not justified in treating iron hoops as falling within the definition of 'iron and steel' in Section 14 of the Central Sales Tax Act, and as such the assessee was not liable to be taxed at the lower rate of 2 per cent, up to 30th June, 1966, and 3 per cent, thereafter, and that the assessee was properly taxed at 10 per cent, by the sales tax authorities. The assessee shall pay the costs of the Commissioner of Sales Tax, M.P. Hearing fee Rs. 100.