CENTRAL COALFIELDS LTD Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) THE question of law to be decided in this petition is whether the coal mines welfare cess, stowing duty and rescue cess recovered by the petitioner from its customers when coal is despatched to them by road forms part of the sale price of coal and is includible in the turnover for assessment of sales tax.

(2.) SECTION 3 of the Coal Mines Labour Welfare Fund Act, 1947, provides that "there shall be levied and collected as a cess for the purposes of this Act a duty of excise on all coal and coke despatched from the collieries in the territories to which this Act extends, at such rate not less than four annas and not more than eight annas per ton, as may from time to time be fixed by the Central Government by notification in the official Gazette". The duty of excise imposed by Section 3 is popularly known as coal mines welfare cess. Section 4 of the Act provides that the proceeds of the duty levied under Section 3 shall be paid by the collecting agencies into the Reserve Bank of India in the prescribed manner and shall be credited to a fund to be called the Coal Mines Labour Housing and General Welfare Fund, and apportioned under the two separate accounts, to be called the housing account of the Fund and the general welfare account of the Fund, in such manner as the Central Government from time to time may, by notification in the official Gazette, determine. Section 10 (1) empowers the Central Government to make rules to provide for "the manner in which the duty levied under Sub-section (1) of Section 3 shall be collected, the persons who shall be liable to make the payments, the making of refunds, remissions and recoveries, the deduction by collecting agencies of a percentage of the realisations to cover the cost of collection, and the procedure to be followed in remitting the proceeds to the Reserve Bank of India". The procedure for recovery of excise duty imposed by Section 3 of the Act when coal and coke is despatched by rail from collieries to any station in India is prescribed by rules 27 to 29 of the Coal Mines Labour Welfare Fund Rules, 1949. The scheme of rules 27 to 29 is that the railway administration collects the duty by means of a surcharge on freight. The duty is recovered from the consignee if the freight is collected at destination and from the consignor if freight is prepaid. The amount of duty so collected is to be remitted by the railway administration to the Reserve Bank of India after deducting such percentage as the Central Government may fix towards the cost of collection. The procedure for recovery of duty on coal and coke despatched otherwise than by rail is prescribed by rules 32 to 38. By Rule 32 every owner of a colliery is required to maintain a register of despatches and to submit monthly returns of such despatches. Rule 33 provides that the amount of duty of excise payable for any month and recorded in the register maintained under Rule 32 shall be deemed to be a provisional assessment of the duty and shall be subject to a final assessment under Rule 37. Rule 34 requires the owner of a colliery to pay the duty so deemed to be assessed into the nearest treasury not later than the last day of the following month. Rule 35 makes the owner of the colliery liable for penalty if there is delay in submission of returns. Rule 37 provides for final assessment of duty. A demand notice follows the final assessment for the balance of the amount of duty. Rule 37a provides for assessment of duty in respect of despatches of coal or coke which have escaped assessment. Rule 38 makes the unpaid duty and penalty recoverable as arrears of land revenue.

(3.) SECTION 8 of the Coal Mines (Conservation, Safety and Development) Act, 1952, provides for imposition of excise duty on all coal raised and despatched and on all coke manufactured and despatched and additional excise duty on all coke raised and despatched from the collieries in India. The excise duties imposed by Section 8 are popularly known as stowing duty. Section 10 provides that the duties of excise levied shall be collected by such agencies and in such manner as may be prescribed. Section 17 (2) (b) empowers the Central Government to make rules for the levy, collection and payment of the duties imposed by Section 8. The procedure for recovery of excise duties when coal or coke is despatched by rail from a colliery is prescribed by rules 24 to 28 and the procedure for recovery of excise duties on coal or coke despatched by means other than rail, namely, road, river and tramways, etc. , is prescribed by rules 29 and 30. The scheme of these rules is similar to that of the corresponding rules, i. e. , rules 27 to 29 and rules 32 to 38 of the Coal Mines Labour Welfare Fund Rules, 1949.