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TMI Blog1981 (12) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... from the registered dealers. In the course of the assessee's assessment to sales tax for said accounting period, the Sales Tax Officer allowed the sales of unburnt coal as well as of ash to be deducted under section 7(ii) of the Act on the ground that they were resales of goods purchased by the assessee from registered dealers. However, in suo motu revision, the Assistant Commissioner of Sales Tax, after affording to the assessee an opportunity of being heard, revised the assessment under section 67 of the Act and disallowed the deduction in respect of the sales of ash to the tune of Rs. 14,380 on the ground that kolshi and ash were two distinct commercial commodities and that sales of ash could not be regarded as resales of kolshi purchased by the assessee from registered dealers. The Assistant Commissioner of Sales Tax consequently directed that the sales of ash should be included in the assessee's turnover of sales and that sales tax should be levied on such sales at the rate prescribed under entry 13 of Schedule III to the Act. The assessee, feeling aggrieved by the decision of the Assistant Commissioner of Sales Tax, carried the matter in revision before the Gujarat Sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s relevant for the purposes of this case, reads as under: "7. There shall be levied a sales tax on the turnover of sales of goods specified in Part A of Schedule II at the rate set out against each of them in column 3 thereof, but after deducting from such turnover,- (i) ....................................... (ii) resales of goods purchased by him from a registered dealer, (iii) ....................................... (iv) ......................................." Section 2 is the definition section. Clause (26) of section 2 is in the following terms: "(26) 'resale' for the purposes of sections 7, 8, 10, 13 and 15 means a sale of purchased goods: (i) in the same form in which they were purchased, or (ii) with-out doing anything to them which amounts to, or results in, a manufacture, or (iii) being goods specified in entries 1 to 3 in Part A of Schedule II and in entries 1 to 6 in Part B of Schedule II without doing anything to them which takes them out of the description thereof in those entries, and the word 'resell' shall be construed accordingly." Clause (16) of section 2 is in the following terms: "(16) 'manufacture' with all its grammatical variations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased from registered dealers and which articles were "coal" within the meaning of entry 1 of Schedule II, Part A? The question, in other words, is: "Whether the assessee who having purchased kolshi from the registered dealers separated ash therefrom and sold the ash, resold kolshi in the same form in which it was purchased or without doing anything to the same which takes it out of the description of 'coal' in entry 1 of Schedule II, Part A?" Be it noted in this connection that each one of the conditions laid down in section 2(26), which defines the word "resale", is disjunctive in character and that, therefore, if it is shown that any one or more of the said conditions is not satisfied, there would be no "resale" within the meaning of section 7. "Coal", according to Webster's New Twentieth Century Dictionary, Unabridged Second Edition, means "a black, combustible mineral solid resulting from the partial decomposition of vegetable matter away from air and under varying degrees of high temperature and great pressure over a period of millions of years; used as a fuel and in the production of coke, coal gas, water gas, and many coal-tar compounds". Coal, within the meaning of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in character. Even if one of the conditions therein laid down is not satisfied, there would be no "resale" within the meaning of section 7. For the purposes of the present case, we may focus attention on conditions (i) and (iii). Condition (i) is that the resale of the purchased goods must be in the same form in which they were purchased. This condition is apparently not satisfied because it is not possible to hold that the sale of ash was the sale of kolshi in the same form in which it was purchased. Condition (iii), in so far as it is relevant for the present purposes, requires that the purchased goods must have been sold without doing anything to them which takes them out of the description of the said goods in entry 1 of Schedule II, Part A. What the assessee, in the instant case, purchased was kolshi, which is "coal" within the meaning of entry 1 of Schedule II, Part A. In order to satisfy this statutory condition, the assessee must be shown to have resold the same article without doing anything which takes the said article out of the description of "coal" in entry 1 of Schedule II, Part A. In other words, "coal" must have been resold as "coal" without doing anything to it wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apparently erroneous. Kolshi and ash are two distinct commercial commodities. Even though ash, before being extracted or separated from kolshi, might have been a constituent part of kolshi, there would be no justification in holding that ash is kolshi. In State of Punjab v. Chandu Lal Kishori Lal [1970] 25 STC 52 (SC) the Supreme Court held that though cotton in its unginned state contained cotton seeds, it would not be correct to say that cotton seeds which are separated from cotton by a manufacturing process are cotton itself or part of the cotton. According to the Supreme Court, they were two distinct commercial goods though before the manufacturing process, the seeds might have been a part of the cotton itself and there was no warrant for the contention that cotton seeds are not different from cotton. On a parity of reasoning, the Tribunal's view point set out above appears to be difficult to sustain. It is true that in Commissioner of Sales Tax v. Deoki Nandan Pandey [1980] 45 STC 145 a learned single judge of the Allahabad High Court has taken the view that sifting of ash and pieces of burnt coal of different sizes for sale of the same by the assessee, who had entered into ..... X X X X Extracts X X X X X X X X Extracts X X X X
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