1. This is an appeal from the order of the Board of Revenue dated 5th August, 1976, in a suo motu revision of the Appellate Assistant Commissioner's order. The assessee purchased scrap metal from hawkers and vendors. These purchases had not suffered tax at any earlier stage. The scrap so purchased was used in the manufacture of ingots. The purchases amounted to Rs. 29,493.38. The assessing authority subjected this turnover to tax under section 7-A of the Tamil Nadu General Sales Tax Act. The Appellate Assistant Commissioner set aside the assessment under section 7-A and directed the assessing officer to dispose of the matter in accordance with the decision of this Court in M. K. Kandaswami v. State of Tamil Nadu 28S.T.C.227. The assessee contested another part of the order of the Appellate Assistant Commissioner in the appeal before the Tribunal and the Tribunal allowed the appeal.
2. The order of the Appellate Assistant Commissioner in so far as it related to the assessment under section 7-A was reviewed by the Board in the light of the decision of the Supreme Court in State of Tamil Nadu v. M. K. Kandaswami : 1SCR38 . The Board was of the view that the Appellate Assistant Commissioner's order to this extent had to be set aside and the order of the assessing authority has to be restored. After hearing the assessee's objections, the Board cancelled the order of the Appellate Assistant Commissioner to the extent that he deleted the assessment of the turnover for Rs. 29,493.38 and restored the assessment to that extent. This order of the Board has now given rise to the present appeal.
3. Section 7-A, in so far as it is material for our case, runs as follows :
'(1) Every dealer who in the course of this business purchases from a registered dealer or from any other person, any goods (the sale or purchase of which is liable to tax under this Act) in circumstances in which no tax is payable under section 3, 4 or 5, as the case may be, and either,
(a) consumes such goods in the manufacture of other goods for sale or otherwise; or
(b) ............ (c) ............ 4. shall pay tax on the turnover relating to the purchase aforesaid at the rate mentioned in section 3, 4 or 5, as the case may be, whatever be the quantum of such turnover in a year .....'
5. The liability to tax under the provision would be attracted if the assessee consumed the goods purchased in the manufacture of other goods for sale or otherwise. Therefore, the short point for consideration is, whether the assessee after purchasing the goods had consumed them in the manufacture of other goods. The learned counsel for the assessee submitted that the scrap was melted and turned into ingots only for the purpose of removing the impurities contained in the scrap and that, in such a case, the ingots continued to remain the same as the scrap minus the impurity. It was, therefore, submitted that it is not a case of manufacture of 'other goods' contemplated by section 7-A. We are unable to agree. Unless the scrap retained its identity, it could not be stated that it was not consumed in the manufacture of other goods. Ingots would be 'other goods' as scrap and ingots are not the same. Anyone going into the market and asking for scrap will not be given ingot and vice versa. Further, the process employed by the assessee by putting the steel scrap into fire and making ingots out of them is a process of manufacture and, therefore, there is consumption of steel scrap and manufacture of the same into goods. This is clearly a case falling within section 7-A(1).
6. The learned counsel for the assessee relied on a decision of the Kerala High Court in A. B. Ismail v. State of Kerala 42S.T.C.217. In that case, the question before the High Court was whether meat exposed for sale in the market after cutting or slaughtering goats or sheep cannot be said to have been manufactured after consuming the goat or sheep. The High Court held that there was no consumption resulting in the manufacture of other goods within the meaning of section 5A of the Kerala General Sales Tax Act, 1963. The learned Judges at page 220 have observed that the exposed for sale is still of goat or sheep and they have pointed out the distinction between meat on hoof and meat or dressed meat. For our present purpose, it is unnecessary to express any opinion on the correctness or otherwise of treating meat as equivalent to goats or sheep. It is enough for our present purpose to point out that the commodity with which we are concerned is wholly different and so it is not possible to apply the said decision here.
7. The result is, the appeal fails and is dismissed with costs. Counsel's fee Rs. 250.
8. Appeal dismissed.