December 03, 2008

SC upholds ST penalty on Bharjatiya Steel

It is reported that Supreme Court has upheld the penalty imposed on Bharjatiya Steel Industries by the Uttar Pradesh commissioner of sales tax for buying iron scrap from the railways at a public auction at concessional rate of tax and then selling it to another person.

Bharjatiya Steel Industries is a manufacturer of steel ingots and it used 90% of the steel scrap for manufacturing purposes by melting and converting them into finished products. The rest of the scrap, weighing 2,533 tonnes, was sold without informing the assessing authority.

Therefore, the authority imposed a penalty for illegally selling the scrap. It argued that what was sold was worthless and it could not find the quality of the material as the auction was on as is where is basis.

However, the second buyer manufactured goods from the rejects. Therefore, the sale was done with a guilty mind, the Supreme Court said, justifying the penalty.