BASITH KHAN Vs. COMMISSIONER OF COMMERCIAL TAXES

JUDGEMENT

(1.) The appellant is a dealer in Agnidevi which is the brand name of certain wastes of several carbon materials consisting of charcoal, coal, tamarind husk, etc. The assessing authority took the view that the goods in question consists of waste carbon material and hence fan under section 5(1) of the Karnataka Sales Tax Act and not under entry 1 of Schedule IV of the Karnataka Sales Tax Act and brought to tax accordingly. Aggrieved by this order, the appellant carried the matter in appeal.

(2.) The appellate authority held that the said goods fall under entry 1 of the Fourth Schedule of the Act since they are covered by the expression "coal in all its forms" and directed the assessing authority to levy tax at 4 per cent.

(3.) The Additional Commissioner of Commercial Taxes in exercise of powers of suo motu revision under section 22A of the Act initiated proceedings and passed an order holding that the order of the appellate authority is erroneous and prejudicial to the interest of the revenue inasmuch as the goods sold by the appellant is neither wholly made of charcoal nor coal nor coke nor any of its forms and as such the assessing authority was justified in bringing the same to tax under section 5(1) of the Act. That order was carried in appeal to this Court in S.T.A. No. 32 of 1987. This Court allowed the appeal and set aside the order made by the revisional authority and remitted the matter for fresh consideration. While doing so, this Court noticed a decision of the Punjab and Haryana High Court in [1987] 64 STC 330 (Haryana Briquettes Industries v. State of Haryana) wherein it was held that coal briquettes are only a product of transformation of remainder of coal, that is, coal-dust and the coal briquettes are used for domestic kitchen consumption as combustible material in the same manner as coal or coke is used and it is always treated as fuel corresponding to coal and it was also held that coal briquettes come within the phraseology of coal in all its forms. Therefore, this Court thought fit to direct the Commissioner to make a fresh decision after ascertaining the facts in the present case to find out as to what was the basic material used.