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TMI Blog1971 (3) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Madras(1). In Tax Case No. 10 of 1964, petitioners Karpagam and Company, dealers in lime and cinder, seek to revise the order of the Sales Tax Appellate Tribunal negativing their claim that cinders come under the first item of Schedule II of the Act. The Tribunal relied on the decision in Mahabir Singh Ram Babu v. Assistant Sales Tax Officer[1962] 13 S.T.C. 248. In Varadarajulu Naidu v. State of Madras(1), Veeraswami, J., as he then was, referred to the above decision in Mahabir Singh Ram Babu v. Assistant Sales Tax Officer[1962] 13 S.T.C. 248., and expressed his agreement with the said decision. A Bench of this court has in K. Venkataraman and Co. v. The State of Tamil Nadu and OthersT.C. Nos 412 to 417 of 1970 and W.A. No. 68 of 1967; [1971] 28 S.T.C. 426. , observed that the point raised in those cases, namely, whether cinder is coal and, if it is not, its sale will be subject to multi-point tax, is covered by the decision in Varadarajulu Naidu v. State of Madras[1965] 16 S.T.C. 684., and pointed out that the same view has been taken by the Allahabad High Court in Mahabir Singh Ram Babu v. Assistant Sales Tax Officer[1962] 13 S.T.C. 248., and by a Division Bench of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eanings are given to the word "coal" in the Shorter Oxford English Dictionary, namely, (1) a piece of carbon glowing without a flame, (2) a piece of burnt wood, etc., that is still capable of combustion without flame, (3) charcoal, (4) a mineral solid, hard, opaque, black or blackish, found in seams in the earth and largely used as fuel. Coke is defined in the same dictionary as mineral coal deprived by dry distillation of its volatile constituents. In Webster's New International Dictionary, "coke" is defined as the solid left when a caking coal is deprived of its volatile constituents by heating in a retort or oven. In the latest volumes of Encyclopaedia Britannica, under the heading "coal and coal mining" in Volume 5, page 961, and under the heading "coke" in Volume 6, page 36, there is reference to different kinds of coal and coke and the particular type of coal which is suitable for preparing coke. In the Encyclopaedia Americana, Volume 7, at page 213, coke is referred to as the solid residue, consisting chiefly of carbon, that is left behind when bituminous coal or petroleum or other liquid hydrocarbons are distilled in the absence of air. Coke made from coal and used as a fue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T.C. 367., a Bench of this court considered the question whether terylene, terene, dacron, nylon, nylex, etc., would come within the expression "artificial silk" occurring as item 4 in the Third Schedule to the Madras General Sales Tax Act, 1959, and therefore, exempted from sales tax and while answering it in the affirmative observed thus: "Courts are bound to have recourse to the meaning attributable to such words by persons who are dealing in such goods and utilising such goods. In other words, the extreme, peculiar and scientific meaning of the words which might sometimes deviate from the popular meaning cannot prevail. Ordinarily, courts when called upon to interpret the meaning of such words, mainly rely upon their popular or ordinary meaning. The meaning which the trade, Government officials and statutes attribute to the words 'artificial silk' must be taken to be the ordinary and popular meaning of the same." In Mahabir Singh Ram Babu v. Assistant Sales Tax Officer[1962] 13 S.T.C. 248 at 249., it was observed that the word "coal" in the notification was used in the sense in which it was strictly speaking used and understood in the English language and that it did not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held in Deputy Commissioner (Sales Tax), Pondicherry v. Akbar Alikhan and Abdul Ruheem Co.[1971] 27 S.T.C. 167. , that leco, which is produced from lignite by a process of briquetting and carbonisation after certain substances are extracted from it, has been understood only as a domestic fuel, and that ordinarily understood it is charcoal and, therefore, it is exempt from sales tax under item 18 of Schedule III of the Pondicherry General Sales Tax Act, 1967. The principle that in a taxing statute the popular meaning or the commercial understanding of a word should prevail in spite of the meaning that the word might secure by the application of the principles of geology, physics or chemistry is reiterated in this decision. It is true that where the words used in an entry are comprehensive or wide enough to include all kinds or types of particular goods falling within the description, their scope should not be restricted. In Commissioner of Sales Tax v. Balwant Singh Jag Roshan Lal[1970] 26 S.T.C. 129. , it was held that black salt of the kind manufactured by the assessee in that case was salt as understood in common parlance and hence would be exempt from tax in view of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expression coffee only to coffee seeds and not to apply it to coffee powder. But in Deputy Commissioner of Commercial Taxes v. Iyanar Coffee and Tea Co.[1962] 13 S.T.C. 457., it has been held that the expression "coffee" as found in section 5(v) of the Madras General Sales Tax Act, 1939, would not include French coffee, which is made by an admixture of coffee powder and chicory powder. The mere change in form or colour of the goods by reason of any processing cannot be held to be a sufficient ground for depriving it of its original classification. Thus, in State of Madhya Bharat v. Hiralal [1966] 17 S.T.C. 313 (S.C.)., the Supreme Court held that the scrap iron purchased by the respondent in that case was only re-rolled into bars, flats and plates to give them attractive and acceptable forms and that they did not in the process lose their character as iron and steel and the dealer in the said goods was, therefore, entitled to claim exemption by virtue of the notification issued under the Madhya Bharat Sales Tax Act. In Tungabhadra Industries Ltd., Kurnool v. Commercial Tax Officer [1960] 11 S.T.C. 827 (S.C.)., it has been held that hydrogenated groundnut oil, commonly called van ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diary product in the course of manufacture. It has been held that when such subsidiary product is turned out in the factory regularly and continuously and is being sold from time to time, an intention to carry on business in kolsi may be reasonably attributed to the company and that the company will be liable to sales tax for such sale of kolsi. In Chitta Reddi v. State of Andhra Pradesh[1969] 24 S.T.C. 317., it is clearly pointed out that the Supreme Court decision in State of Gujarat v. Raipur Manufacturing Co.[1967] 19 S.T.C. 1 (S.C.), does not really support the contention that cinders are coal. In fact, if cinders are included in coal, there could not be a further liability for taxation on the sale of cinder, once the tax has been levied on coal. The learned Advocates for the appellants urged that even if cinders are not considered as coal in accordance with the dictionary meaning, they would at least come within the term "coke in all its forms". Different forms of cokes are well-known and it could hardly be contended that cinder constitutes a form of coke. The term "in all its forms" has been used in several entries in the Sales Tax Act and it has been the subject matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the goods specified in the Schedule are declared to be essential for the life of the community and no law made after the commencement of that Act by the Legislature of a State could have effect unless it has been reserved for the consideration of the President and has received his assent. Item 13 of the Schedule to that Act is relevant for this case and it is as follows: "Coal including coke and other derivatives, petroleum and petroleum products, including kerosene and motor spirit." Chapter IV of the Central Sales Tax Act deals with goods of special importance in inter-State trade or commerce and it contains three sections, 14, 15 and 16. Section 16 repeals the Essential Goods (Declaration and Regulation of Tax on Sale or Purchase) Act, 1952. Section 14 declares goods of special importance in inter-State trade or commerce and item (i) in that section refers to coal including coke in all its forms. Thus, item (i) of section 14 of the Central Sales Tax Act is identical with entry 1 of Schedule II of the Madras General Sales Tax Act, 1959. Section 15(a) of the Central Sales Tax Act provides: "Every sales tax law of a State shall, in so far as it imposes or authorises the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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