9911796707
TMI Blog1984 (11) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... will supply minimum 5000 M. Tons of approved variety of firewood duly debarked and splitted, from the above forests to our factory at Mavoor @ minimum 3 lorry loads per day, failing which, penalty @ Rs. 10 per lorry/load fallen short would be levied on you; however monthly average would be taken while imposing this penalty. Rate: You will be paid the following rates, on per ton basis, all inclusive for the supply of debarked/splitted material at our factory site, Mavoor, from the above forest area on the basis of weight recorded at our factory weigh bridge, Mavoor which would be final and binding upon in this regard: 1. Rs. 5/(five per M. Ton) cost of material inclusive of sales tax. 2. Rs. 15/(fifteen) Extraction/debarking/splitting charges, etc. 3. Rs. 27/50 (Rs. twenty-seven and paise fifty only) per M. Ton for transport to factory, Mavoor. ------------------------ Rs. 47/50 Ps. per M. Ton Total ------------------------ * * * Specifications: 1.. Material (firewood) should be of approved quality only. 2.. The firewood should be duly debarked cleanly and split into suitable sizes. 3.. Minimum length should be 1 metre and maximum 2 metres. Minimum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chased were used by the assessee (purchaser?) for a purpose other than what is regarded as the predominant or ordinary use of that article. The Tribunal thought that in view of this statement of the law, and the circumstance that part of the same material sold to another purchaser by the assessee had been treated as "firewood" by the Sales Tax Officer and the Appellate Assistant Commissioner, there was no need for any further investigation, and that the article supplied had to be treated as firewood in the case of Gwalior Rayons also. And in the light of the decision in Kutty [1978] 42 STC 294 freight charges were also to be excluded from the computation of turnover. The matter was accordingly remitted to the Sales Tax Officer for passing fresh orders on the above basis. 3.. In T.R.C. No. 62 of 1983 the assessee is Consolidated Timbers, Kallai, Calicut; but the records disclose that during the assessment year 1974-75 they were dealing in firewood alone, in connection with a "coupe" at Mannarghat. After a scrutiny of the returns submitted by the assessee, the Sales Tax Officer wrote to them: "The entire sales as per accounts relate to firewood. But it is seen that goods worth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not affect the character or nature of the commodity sold. The pieces sold to Gwalior Rayons, debarked or otherwise, were capable of being used as "firewood" despite the specifications, and the sellers had no duty to enquire for what purpose the purchaser was using the material. 6.. A number of decisions were cited, and the question was mooted at one stage whether the nature of the use to which a commodity is put by a purchaser is relevant at all. We think that it is neither proper nor desirable to pose the question in such a general form and attempt to answer it in the abstract. With regard to "firewood" under entry 55 at least, it is not possible to hold that use or user is totally irrelevant under all circumstances. That is because the very term "firewood" carries with it the concept of a well known use. Wood in any form and of every variety will burn, but only wood prepared for being used as firewood in the hearth or furnace can be so classified. It is reasonable to assume that the Legislature provided for the concessional rate under entry 55 because it knew that fuel was an important item in every family budget. All that this Court said in the Western India Plywoods case [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Industries v. State of A.P. [1976] 37 STC 378 (SC) the Supreme Court was called upon to consider the scope of an entry in the A.P. General Sales Tax Act, reading as: "cinematographic equipment, including ...............parts and accessories required for use therewith". The assessee was manufacturing "cinema arc carbons" and the contention was that as the product was being used for searchlights, signalling, stage lighting, etc., it could not merely be assumed that all that was manufactured was being used as part of cinematographic equipment. The Court held that having regard to the term "use" employed in the last part of the entry, the general or ordinary use of the article was relevant. Referring to decisions explaining the scope of other and similar entries in sales tax enactments, the Court said: "We do not think that any useful purpose is served by multiplying cases relating to entries which are so very different and could have only a very remote bearing, if any, upon any reasoning which could be adopted to support the submission that the arc carbons, under consideration here, fell within the relevant entry No. 4 of Schedule I of the Act. The meaning of this entry can only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arking a course not commonly followed in the sale and purchase of the commodity. The minimum requirement (from one contractor alone) was 5000 M. Tons, and yet only varieties of wood specified in advance would be accepted. Is it unreasonable to infer from these circumstances that during the discussions that preceded the agreement M/s. Gwalior Rayons and the coupe contractor had agreed to sell and buy not firewood for fuel purposes, but pieces of wood specially suitable for the manufacture of pulp? And is it possible to say that where both the seller and the purchaser consciously enter into a bargain for the supply of raw material for the manufacture of rayon pulp, the transaction should still be fictionally regarded as one relating to firewood, simply because the material that changed hands could have been used by others, under other circumstances, as fuel? We think not. 10.. The Western India Plywoods' case [1980] 46 STC 331 had no doubt indicated that if a commodity was found to fall within entry 55 of the Schedule, it could claim the concessional rate notwithstanding proof of special use by a buyer. But the finding by the assessing and appellate authorities in the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that what was sold was not firewood or fuel wood. The specifications showed that the blue-gum eucalyptus must be split to size and debarked. What the purchaser in each case obviously desired was that the eucalyptus should serve the intended purpose, namely, to be used in the manufacture of rayon or other kind of man-made fibre. This applies to wattle wood as well. That the goods sold were firewood or fuel wood must have been farthest from the thoughts of both the parties. Apart from the particular specifications in the sale agreement to which we have referred, we think we must have regard for the colloquy of commerce and the common vocabulary of the market for distinguishing between firewood and other kinds of wood. Firewood, in common commercial parlance and as understood by the trade as well as by the consuming public, is not just any wood that can be used as logs of fuel. Every kind of wood is potential firewood, for you can start a fire with any wood. But this is not the test. Firewood is wood of a kind which has attained notoriety as fuel. Nobody who sells firewood debarks the wood before sale. Nobody who buys firewood requires them to be shaved and debarked. Purchasers m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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