9911796707
TMI Blog1998 (10) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... or as different commodities for the purpose of taxation under the Andhra Pradesh General Sales Tax Act, 1957? (2) Whether coal-ash is a product of the petitioner s industrial unit and whether the sale of coal-ash by the petitioner is eligible for exemption under G.O. Ms. No. 606, dated April 9, 1981? (3) Whether the Sales Tax Appellate Tribunal erred in law stating that the judgment of the Supreme Court in India Carbon Ltd. v. Superintendent of Taxes, Gauhati [1971] 28 STC 603 is not applicable to the facts of the present case? (4) Whether coal-ash is taxable under entry (1) of the Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957 or under the Seventh Schedule? 4.. Facts in brief are as under: The petitioner-company, M/s. Bhadrachalam Paperboards Limited, is engaged in manufacturing paper, paperboards, etc. It had purchased eucalyptus wood and casuarina wood from various unregistered dealers during the relevant assessment years and used the same for manufacturing paper, paperboards, etc. It had also sold coal-ash (cinder) which was obtained after the coal was burnt when used as fuel for the purpose of manufacturing the paperboard, etc. 5.. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchased eucalyptus and casuarina wood for manufacturing paper, paper boards, etc., in its factory. The petitioner-company also purchases coal and uses the same for generating steam which is used in the manufacture of paper and paper boards. Coal is burnt in the boilers and the coalash (cinder) which is unburnt residual coal coming out of the boilers, is disposed of by the company. Counsel contended that the coal which was purchased by the petitioner-company and the coal-ash which is sold by it are to be construed as one and the same commercial commodity and as such the sale of coal-ash in the hands of the petitioner-company is only a second sale. He further contended that the company also purchased eucalyptus and casuarina wood pieces for the purpose of pulping the same for manufacture of its products. According to the counsel, the company treated such purchases as firewood and discharged tax accordingly. While laying emphasis on the contention that coal and coal-ash are one and the same commodity, counsel has drawn our attention to the meaning given to the word coal in Blackies Concise Dictionary, New Edition, page 134, wherein the word coal is defined as a piece of wood o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Pleader for Taxes, appearing on behalf of the respondent in all these revisions has contended that coal and coal-ash are two different commodities and the Deputy Commercial Tax Commissioner was justified in holding that the sale of coal-ash by the petitioner-company amounts to first sale at the hands of the petitioner-company as the coal-ash is a different commodity. Learned Special Government Pleader for Taxes has supported the revisional order of the Deputy Commercial Tax Commissioner and also the impugned order passed by the Sales Tax Appellate Tribunal. Learned Government Pleader further contended that the manufacturing activity of the petitioner-company being paper and paperboards, the sale of coalash by the petitioner-company cannot be brought within the purview of G.O. Ms. No. 606 to treat coal-ash as a product seeking exemption. He nextly contended that the petitioner-company purchased eucalyptus and casuarina wood from the unregistered dealers to be used as raw material for manufacturing paper and paperboards and as such it cannot be treated as firewood but is only a timber. According to the learned Special Government Pleader, the wood purchased by the petitioner-com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng coke in all its forms mentioned in clause (i) of section 14 of the Central Sales Tax Act, fell for consideration before the Supreme Court in that decision and the Supreme Court held that petroleum coke is one of the forms of coke and cannot be excluded from item (i) of section 14 of the Central Sales Tax Act. The question whether coal and coal-ash are one and the same commodity or two different commodities has not fallen for consideration before the Supreme Court. Entry 1 of the Third Schedule to the APGST Act also mentions coal including coke in all its forms . The said entry also does not mention that the term coal includes coal-ash . A Division Bench of this Court in P. Chitta Reddi s case [1969] 24 STC 317, while dealing with the question whether burnt cinders are coal or coke within the meaning of item No. 1 of Fourth Schedule IV of the APGST Act, has categorically held as under: ...............In our view also cinders cannot be said to be coal in the popular sense of the term, though they may be the end-products of coal after a greater part of the energy therefrom has been spent. By holding so, the Division Bench of this Court in the above decision has dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we decide questions Nos. 1 and 3 against the petitioner-company. 14.. Question No. 2: In so far as the second question of law as to whether coal-ash is a product of the petitioner s industrial unit and that the sale of coalash by the petitioner has to be given exemption under G.O. Ms. No. 606, dated April 9, 1981, it is apt to refer to the said G.O. Ms. No. 606, Notification No. III issued under the said G.O., exemption is granted for the sale of products of the industrial units set up on or after December 17, 1976 in the scheduled areas from the tax payable under the APGST Act for a period of five years from the date of commencement of regular production by such industrial units. The contention advanced on behalf of the petitioner-company is that coal-ash is also one of its products and as such, sale of coal-ash has to be given exemption in terms of G.O. Ms. No. 606 dated April 9, 1981. We are not prepared to accept this contention advanced on behalf of the petitioner-company. It is quite apparent that the main production activity of the petitioner-company is the manufacture of paper and paperboards and for the said purpose only the petitioner-company is established. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lucknow v. Marwah Co. [1979] 43 STC 435 (All.) by the learned counsel for the petitioner-company. 16.. In the instant case, the department has treated the wood purchased by the petitioner-company as unclassified goods and assessed the same to tax under section 6-A of the APGST Act. The petitioner-company has not produced any material showing that the wood purchased by it was only firewood. Even the invoices produced by it disclose that the sellers who are unregistered dealers are described as debarked wood suppliers and the wood is described as debarked eucalyptus wood and casuarina wood. There is no mention at any point of time that the wood purchased by the petitioner-company is firewood. In the absence of any proof to indicate that the wood purchased by the petitioner-company is firewood, the department is justified in treating the same as unclassified goods and levying the tax as applicable to unclassified goods . The department contended that the petitioner-company purchased timber and used it as raw material for its manufacturing activity but not as fuel, which has been found favour with the Tribunal below. The Tribunal has also found that the wood purchased by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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