2004 (5) TMI 567 - HC - VAT and Sales Tax

Summary

Issues:
1. Taxability of coal ash under Sales Tax
2. Taxability of cardigan and pullovers under Sales Tax

Issue 1: Taxability of coal ash under Sales Tax
The High Court analyzed whether coal ash is taxable as an unclassified item or as part of coal under a specific entry of a notification. The Court referred to previous judgments, including one related to coal dust, to determine the taxability of coal ash. It was established that coal dust, being a mineral known as coal, was considered part of coal due to its combustible properties. However, in the case of coal ash, which is the residue left after coal is burnt, the Court found that there was no evidence to suggest it could be used as fuel like coal. Therefore, the Court concluded that coal ash should be taxed as an unclassified item, not as coal, overturning the Tribunal's decision.

Issue 2: Taxability of cardigan and pullovers under Sales Tax
The Court addressed whether cardigans and pullovers should be taxed as woollen hosiery or as woollen goods under the Sales Tax regime. The Court relied on a Full Bench judgment in a previous case involving the same dealer to determine the taxability of these items. The Full Bench judgment had established that cardigans and pullovers are to be classified as woollen hosiery, not as woollen goods. Therefore, the Court upheld the Tribunal's decision that cardigans and pullovers are taxable as woollen hosiery, affirming the findings on this issue.

In conclusion, the High Court partially allowed the revision, setting aside the Tribunal's decision on the taxability of coal ash and confirming the taxability of cardigans and pullovers as woollen hosiery.