1988 (4) TMI 403 - HC - VAT and Sales Tax

Issues Involved:
1. Whether "coke" falls within the ambit of "coal" as defined in section 14(ia) of the Central Sales Tax Act, 1956.
2. The cumulative effect of sections 14(ia) and 15 of the Central Sales Tax Act, 1956, read with section 12(2) of the Bihar Finance Act, 1981.
3. The effect of section 11 of the Bihar Finance Act, 1981, and rule 45 of the Bihar Sales Tax Rules, 1983.
4. The legality and validity of the notice issued by the Deputy Commissioner, Commercial Taxes, Hazaribagh Circle.
5. The maintainability of the writ applications.

Issue-wise Detailed Analysis:

1. Whether "coke" falls within the ambit of "coal" as defined in section 14(ia) of the Central Sales Tax Act, 1956:
The primary question of law in these cases was whether "coke," in any form, falls within the ambit of "coal" as defined in section 14(ia) of the Central Sales Tax Act, 1956. The court referred to the Supreme Court's decision in India Carbon Ltd. v. Superintendent of Taxes, Gauhati, which held that "coal" includes "coke in all its forms." The court also cited Bajrangbali Coke Briquetting Industries v. State of Bihar, which supported the contention that "coal" includes "coke" and "briquettes." The court concluded that "coke" in any form is not a distinct subject matter for taxation under the Central Act and is embraced by "coal" within the meaning of clause (ia) of section 14.

2. The cumulative effect of sections 14(ia) and 15 of the Central Sales Tax Act, 1956, read with section 12(2) of the Bihar Finance Act, 1981:
The court noted that the statutory provisions of section 14(ia) of the Central Act declare "coal" to include "coke in all its forms," and this interpretation must be in consonance with section 15 of the Central Act. The court emphasized that the necessary consequences flowing from this interpretation must align with section 11 of the Bihar Finance Act, 1981, read with section 12(2) thereof. The court held that the issuance of the registered permit cannot be withheld unless the relevant provisions of rule 45 of the Bihar Sales Tax Rules, 1983, are attracted against the writ petitioners.

3. The effect of section 11 of the Bihar Finance Act, 1981, and rule 45 of the Bihar Sales Tax Rules, 1983:
Section 11 of the Bihar Finance Act specifies the point or points in the series of sales at which sales tax shall be levied. The court noted that the notification issued under section 11 includes "coal including coke in all its forms" as taxable goods. The court held that the impugned notice issued by the Deputy Commissioner, Commercial Taxes, Hazaribagh Circle, was in contravention of the provisions of section 14(ia) of the Central Sales Tax Act and section 15 read with section 12(2) of the Bihar Finance Act, 1981.

4. The legality and validity of the notice issued by the Deputy Commissioner, Commercial Taxes, Hazaribagh Circle:
The court found that the notice issued by the Deputy Commissioner, Commercial Taxes, Hazaribagh Circle, was illegal and invalid. The notice intimated dealers in hard coke that coal and coke were distinct goods for taxation purposes and that sales of hard coke would be subjected to sales tax. The court held that this notice was in contravention of the statutory provisions and quashed the impugned notices.

5. The maintainability of the writ applications:
The court addressed the preliminary objection regarding the maintainability of the writ applications. The respondents argued that the impugned notice was not a notice or order but merely a thought expressed by the Deputy Commissioner. The court rejected this argument, citing decisions in Filterco v. Commissioner of Sales Tax, M.P., Bajrangbali Coke Briquetting Industries v. State of Bihar, and Ashok Industries v. State of Bihar, which supported the maintainability of the writ applications.

Conclusion:
The court allowed the writ applications, quashed the impugned notices, and issued a writ of mandamus restraining the respondents from giving effect to the notices. The court clarified that the competent taxing authority under the Act could proceed for assessment in accordance with the law but restrained the respondents from acting on the basis of the impugned notices. There was no order as to costs.

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