Madhya Pradesh High Court
Commissioner Of Sales Tax vs Punjab Coal And Kutti Farm on 6 October, 1980
JUDGMENT K.N. Shukla, J.
1. The Tribunal (Board of Revenue, Madhya Pradesh) has stated the case and referred the following question to this Court for opinion :
Whether, under the facts and circumstances of the case, 'nalidar coal' is coal and will be covered by entry No. 1 of Part III of Schedule II to the Act?
2. The assessee deals in nalidar coal and kutti and was assessed to sales tax for Divali year 1963-64. The turnover of nalidar coal was assessed to tax at the rate of 5 per cent and 6 per cent as per the rate for residuary goods under Part VI of Schedule II to the Act. The first appeal before the Additional Appellate Assistant Commissioner was dismissed. The matter came before the Tribunal and it was contended on behalf of the assessce-appellant that nalidar coal was coal for the purpose of item No. 1 of Part III of Schedule II to the Act and tax at the rate of 2 per cent only was chargeable thereon. The Tribunal accepted the argument and allowed the appeal of the assessee. At the instance of the Commissioner of Sales Tax the above question has been referred to us for opinion.
3. The statement of case shows that it was found as a fact that nalidar coal is made of charcoal dust and of coal-dust mixed with some earth and water. Nalidar coal is used as a. fuel and the combustible ingredient in nalidar coal is coal or charcoal dust. The small proportion of earth and water is used only to make an adhesive mixture so that it can be given the shape of a brick or a cylinder. In commercial and popular use it is treated as coal and used as a fuel.
4. In Commissioner of Sales Tax, M.P. v. Jaswant Singh Charan Singh 1967 M.P.L.J. 590 (S.C.), the question before the Supreme Court was whether charcoal is included in the term "coal" for purposes of determining the rate of sales tax. Their Lordships observed that while interpreting items and statutes like the Sales Tax Act resort should be had not to the scientific or the technical meaning of the terms but to their popular meaning or the meaning attached to them by those dealing in them. By applying this yardstick the court held that coal did not refer only to a mineral product but also to charcoal which was prepared from wood and other articles by human agencies. In paragraph 8 of the judgment their Lordships considered this issue from one more angle and it was that both these items were used as fuel and since firewood was also charged to tax at the rate of 2 per cent, the intention of the legislature was to charge tax at the rate of 2 per cent only on charcoal. By analogy we can apply this reasoning to this item of nalidar coal as well. We, therefore, hold that nalidar coal is coal and will be covered by entry No. 1 of Part III of Schedule II to the Act.
5. We answer the question in the affirmative. There shall be no order as to costs.