JUDGMENT K. K. Sasidharan J. - These two writ appeals are directed against the order dated March 17, 2008 in W.P. Nos. 15072 of 2007 and 28254 of 2007 (Chitrahar Traders v. Commissioner of Commercial Taxes [2008] 14 VST 439 (Mad)) whereby and where under, the learned single judge was pleased to quash the proceedings of the Commissioner of Commercial Taxes, Chepauk dated April 16, 2007 and directed the Commercial Tax Officer, Cuddalore to refund the excess amount of sales tax. Background facts : M/s. Neyveli Lignite Corporation (hereinafter referred to as NLC) was having a briquetting and carbonization plant producing leco which is a form of lignite. This factory was established in the year 1965. Since there were frequent breakdowns and as the factory was incurring huge losses, NLC found that it was not viable to continue the operation. Accordingly, the factory was closed and an intimation to that effect was given to the Deputy Chief Inspector of Factories and the Central Excise Department. The factory licence was surrendered by NLC on July 10, 2002. Subsequently NLC has taken a decision to auction the plant and machinery in "as is where is" condition and for the said purpose, permission was obtained from the Ministry of Coal, Government of India. M/s. Metal Scrap and Trading Corporation Ltd. (hereinafter referred to as "MSTC"), a Government of India enterprise was engaged for the purpose of auctioning the scrap. MSTC, engaged in the business of scrap, entered into an agreement with Neyveli Lignite Corporation on November 3, 2004 in and by which, it was agreed to pay 2.5 per cent of the sale proceeds as service charges to the selling agent. MSTC called for e-tenders and M/s. Chitrahar Traders, Tirupur, respondent in W.A. No. 639 of 2008, was the successful bidder. Accordingly, the bid was confirmed in their favour for a total consideration of Rs. 70,01,00,019. Since Neyveli Lignite Corporation was not in a position to dismantle the machinery, they have permitted the auction purchaser to remove the scrap by blowing the superstructure and machineries with the help of explosives. Accordingly, the successful bidder used explosives besides gas cutting machines and cranes and removed the scrap after securing gate pass from the Corporation. 70,01,00,019. Since Neyveli Lignite Corporation was not in a position to dismantle the machinery, they have permitted the auction purchaser to remove the scrap by blowing the superstructure and machineries with the help of explosives. Accordingly, the successful bidder used explosives besides gas cutting machines and cranes and removed the scrap after securing gate pass from the Corporation. The Commercial Tax Officer, Cuddalore as per proceedings dated April 29, 2005 informed NLC that if the plant and machinery has been sold as scrap and the bidder was asked to dismantle and transport it as steel scrap, such sales of scrap were taxable at four per cent without surcharge, under entry 4(1)(a) of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959. Later, the matter was clarified by the Commissioner of Commercial Taxes, Chennai, confirming the position that steel scrap was taxable only at four per cent. Accordingly, Neyveli Lignite Corporation collected four per cent sales tax from the successful bidder and the tax amount was also paid. While the matters stood thus, the Commissioner of Commercial Taxes as per his letter dated July 4, 2005 informed NLC that the auction was for the purpose of sale of the briquetting and carbonisation plant and machinery on "as is where is and no complaint" basis and as such, it was taxable at 12 per cent under entry No. 20, Part D, First Schedule to the Tamil Nadu General Sales Tax Act, 1959 with surcharge at five per cent. Since there was nothing indicated in the letter of clarification issued by the Commissioner of Commercial Taxes with respect to the basis for arriving at the percentage of tax, the successful bidder submitted an application for clarification once again to the Commissioner of Commercial Taxes. Accordingly, the matter was examined by the Commissioner and as per proceedings dated April 16, 2007, the Commissioner opined that sale was in respect of "B & C" plant and machinery on "as is where is and no complaint" basis and as such, is taxable at 12 per cent under entry 20 of Part D of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 with a surcharge at five per cent on tax. The proceedings dated April 16, 2007 on the file of the Commissioner of Commercial Tax were challenged by Neyveli Lignite Corporation in W.P. No. 28254 of 2007. The proceedings dated April 16, 2007 on the file of the Commissioner of Commercial Tax were challenged by Neyveli Lignite Corporation in W.P. No. 28254 of 2007. Chitrahar Traders challenged the said communication in W.P. No. 15072 of 2007. Before the learned single judge, the appellants contended that the goods sold have been described as "B & C" plant and machinery on "as is where is and no complaint" basis and as such, it was an outright sale of plant and machinery. Since the sale was characterized as old plant and machinery, there was no question of payment of sales tax at four per cent, applicable to steel scrap. According to the appellants, the successful bidder was liable to pay sales tax at 12 per cent with surcharge at five per cent as the sale was purely a transaction in old plant and machinery. The learned single judge adopted the test of "intention of the parties" and was of the view that the auction was to sell the machinery as scrap and even in the gate pass, it was described only as scrap and therefore, the successful bidder was liable to pay only the tax applicable to scrap. The learned judge placed reliance on a judgment of a Division Bench of this court in State of Madras v. Raman & Co. [1974] 33 STC 1 wherein a similar question was considered by the Division Bench, which was subsequently affirmed by the Supreme Court in State of Tamil Nadu v. Govindan & Co. [1994] 93 STC 185. Accordingly, the learned judge quashed the impugned proceedings and directed the appellants to collect the tax only at four per cent and to return the excess tax collected. Aggrieved by the said order, the appellants are before us. Submissions The learned Advocate-General appearing on behalf of the appellants contended that in the sale order/acceptance letter dated February 16, 2005 issued to M/s. Chitrahar Traders, there was a clear indication that what was sold was only "B & C" plant and machinery as a whole lot on "as is where is and no complaint" basis and as such, it was a simple transaction of sale of old machinery liable for sales tax at 12 per cent with surcharge at five per cent. According to the learned Advocate-General, originally gate pass issued by the Neyveli Lignite Corporation showed that it was only sale of "B & C" plant and machinery; and it was only subsequently they have shown it as scrap. However, the learned Advocate-General fairly conceded that the machineries were in fact dismantled and they were transported as scrap. According to the learned Advocate-General, the State is not concerned with the way in which the materials were transported and the State is entitled to collect the appropriate sales tax on the basis of the sale effected by Neyveli Lignite Corporation. The learned Advocate-General also placed reliance on the decision of the Division Bench of this court in Uma Devi Sizing Industries v. State of Tamil Nadu rep. by the Commercial Tax Officer - II, Rajapalayam [1993] 4 MTCR 265 as well as R. M. Basha v. State of Tamil Nadu [1986] 62 STC 432. The learned senior counsel for the respondent in the respective writ appeals justified the order passed by the learned single judge. According to the learned senior counsel, it was the admitted case of the parties that the successful bidder was made to dismantle the machinery and it was transported only as scrap. Therefore, the purchaser was liable to pay the appropriate sales tax treating it as scrap and not as machineries. Analysis There are certain admitted facts in the present case. M/s. Neyveli Lignite Corporation is a public sector undertaking. They have established an industry in the year 1965 to produce leco, which is a form of lignite. The corporation sustained huge losses and ultimately, the factory was closed on April 4, 2001. In view of the closure of the factory, licence was surrendered on July 10, 2002. The corporation took a decision to auction the machinery as metal scrap and accordingly, MSTC was appointed as a selling agent for disposal of iron and steel scrap. MSTC on their part invited e-tenders and in the said tender, M/s. Chitrahar Traders became the successful bidder. Accordingly, the bid was confirmed in their favour. The sales tax authorities originally intimated NLC and the auction purchaser that the transaction was in the realm of scrap trade and as such, the tenderer was liable to pay sales tax only at four per cent. Accordingly, the bid was confirmed in their favour. The sales tax authorities originally intimated NLC and the auction purchaser that the transaction was in the realm of scrap trade and as such, the tenderer was liable to pay sales tax only at four per cent. Accordingly, sales tax was paid and it was only at a later point of time, the appellants have raised a demand that the sale was in respect of machinery on "as is where is and no complaint" basis and as such, the successful bidder was liable to pay sales tax at 12 per cent with surcharge at five per cent irrespective of the fact that the machinery was dismantled and it was transported as metal scrap. It is true that in the confirmation of acceptance of offer dated February 16, 2005, M/s. Neyveli Lignite Corporation has indicated that the sale was in respect of "B & C" plant and machinery as a whole on "as is where is and no complaint" basis. It was the said communication which was heavily relied on by the learned Advocate-General to justify the claim made by the appellants for levy of sales tax at 12 per cent. However, a perusal of the order of acceptance clearly shows that it was only a scrap sale inasmuch as even as per the said document, the successful bidder was directed to pay the bid amount along with income-tax and taxes on the total value of the scrap. Similar indications are also found in form XIV filed by M/s. Neyveli Lignite Corporation wherein it was clearly stated that the buyer themselves have dismantled and removed the B & C plant and machinery after the issue of delivery order by the corporation. It is also a matter of record that an application was submitted to the District Collector for using explosives for the purpose of dismantling the machinery. The District Collector as per proceedings dated February 21, 2006, permitted the use of explosives. Accordingly, machineries were dismantled and they were transported as steel scrap. The appellants have no contention that there was no act of dismantling of machinery by M/s. Chitrahar Traders and they have removed the machinery part by part. The District Collector as per proceedings dated February 21, 2006, permitted the use of explosives. Accordingly, machineries were dismantled and they were transported as steel scrap. The appellants have no contention that there was no act of dismantling of machinery by M/s. Chitrahar Traders and they have removed the machinery part by part. In fact, there was no contention raised by the appellants before the learned single judge with respect to the factual position that the machineries were dismantled by the bidder before taking the same as scrap. In the affidavit filed in support of the writ petition, Neyveli Lignite Corporation has clearly stated that the machinery was dismantled and it was taken by the auction purchaser only as scrap. The sale in question was effected by a public sector undertaking. The selling agent was none other than another public sector undertaking engaged in the business of metal scrap. The machineries were installed as early as in the year 1965 and the factory was ultimately closed in the year 2001. The agreement entered into between Neyveli Lignite Corporation and MSTC clearly shows that it was intended to be an agreement for sale of scrap. The other documents enclosed in the typed set of papers also clearly show that the sale was intended to be one of scrap. Neyveli Lignite Corporation was not having the facilities for dismantling the machinery and as such, the auction purchaser was permitted to dismantle the entire machinery and to transport the same as scrap. There are no materials on record to suspect the bona fides of the transaction. The transaction was considered at all points of time as a sale of scrap and it was never intended to be a sale of old machinery. In Uma Devi Sizing Industries v. State of Tamil Nadu rep. By the Commercial Tax Officer II, Rajapalayam case [1993] 4 MTCR 265, the appellant who was engaged in the business of purchasing condemned and old machinery was the successful bidder in an auction conducted by Neyveli Lignite Corporation for breaking and dismantling machinery into ferrous and non-ferrous scrap and selling them as scrap. Before the sales tax authorities, the appellant claimed exemption from payment of tax on the ground that the condemned articles which they have purchased from Neyveli Lignite Corporation were subjected to tax already and as such, there was no necessity to pay sales tax on second sale. Before the sales tax authorities, the appellant claimed exemption from payment of tax on the ground that the condemned articles which they have purchased from Neyveli Lignite Corporation were subjected to tax already and as such, there was no necessity to pay sales tax on second sale. The Division Bench found that the cutting and dismantling of the condemned machinery by the appellant after their purchase from Neyveli Lignite Corporation resulted in emergence of scrap which is a distinct commercial commodity. Therefore, when the condemned machineries were transformed into scrap by a dismantling process it became a separate and distinct commercial commodity for the purpose of sales tax. The Division Bench also found that there was absolutely no material to show that the condemned machineries purchased by the appellant from the Neyveli Lignite Corporation in auction were of no further use as such and the intention of the Neyveli Lignite Corporation and the appellant was to sell and buy only ferrous and non-ferrous scrap found in the condemned machineries sold in auction. The facts of the present case are entirely different. The intention was to sell the machinery as scrap and the related documents clearly show the said intention. The successful bidder was permitted to dismantle the machinery by using explosives. The gate pass issued by Neyveli Lignite Corporation clearly shows that the machinery was dismantled and it was transported as metal scrap. Therefore, the intention in selling the product as scrap was materialized, on account of such dismantling. In such circumstances, it cannot be said that the judgment in Uma Devi Sizing Industries case [1993] 4 MTCR 265 has got application to the facts on hand. The word "scrap" denotes something which cannot be used for the same purpose for which it was used earlier or which could be used after repairing or renovating the same. It is the admitted case of the parties that the machinery was actually dismantled by the auction purchaser and it was transported out of the factory as metal scrap. Therefore, there was no question of repair or renovation of the machinery for the purpose of using it as machinery so as to take that transaction as one not coming within the purview of sale of scrap. The learned single judge has applied the correct test to determine the transaction involved in the matter. Therefore, there was no question of repair or renovation of the machinery for the purpose of using it as machinery so as to take that transaction as one not coming within the purview of sale of scrap. The learned single judge has applied the correct test to determine the transaction involved in the matter. The learned judge was perfectly correct in his observation that the intention was to sell the machinery as scrap. The earlier communication of the sales tax authorities also confirms the said position. We do not find any material to take a different view in the matter. In the result, both the writ appeals are dismissed. No costs.