Case: Indian Carbon Limited Vs. Superintendent of Taxes, Gauhati and Others

1964. The company then moved the High Court under Art. 226 of the Constitution which was dismissed.3. In the writ petition as also the return held in reply there to and before the High Court the provisions of certain other enactments were mentioned. These were the Assam Finance Sales Tax Act, 1956 as amended from time to time and the Assam (Sales of Petroleum and Petroleum Products ................) Act 1956 as amended. It is unnecessary to refer to their relevant provision because before it is common ground that the tax would be payable under the Assam Act, the only question being about the rate. Under the Assam Act, the rate chargeable was 5 paise per rupee. But it has been claimed on behalf of the appellant that by virtue of the provisions of the Central Sales Tax Act 1956, hereinafter called the "Act", the rate at which the tax would be payable is 2 paise per rupee.4. Section 14 declares, interalia, that coal including coke in all its forms constitutes goods which are of special importance in inter-State trade or commerce. Section 15(1) of the Central Act as it stood at the relevant time was in the following terms :S. 15 "Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions namely :(a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed (two per cent) of the sale or purchase price thereof, and such tax shall not be levied at more than one stage.(b) ................"It may be mentioned that by Amending Act 13 of 1966, 3% was submitted for 2% with effect from July 1, 1966.5. It is not disputed that if petroleum coke is covered by clause (i) of sec. 14 which reads "coal including coke in all its forms" the State was not competent to levy tax at a rate exceeding the one given in sec. 15(a) of the Central Act. Before the High Court it was common ground that petroleum is used mainly in industries dealing with the manufacture of carbon products and it differs in material constituents, quality, utility and composition from the ordinary coke used as fuel. It is used largely in the manufacture of dry cells, carbon electrodes and electric furnace resistance element. Reference has also been made in the judgment to what is stated in "Chemical Engineers" Hand book, 3rd Edn., at page 1556 :-"Coke is a hard, dense infusible carbonisation residue that ranges from a dull gray-black to a silvery gray; the latter is characteristic of good quality high temperature coke. A coke of this type makes a ringing sound when dropped or struck with a hard object. It exhibits a porous cell cellular structure, which primarily depends upon the kind of coal used & the rate of heating during the carbonization process"The High Court was of the view that the word coal includes coke in all its forms in clause (i) of sec. 14 of the Central Act and must be taken to mean coke derived from coal. In other words it must be coke which had been derived or acquired from coal by following the usual process of heating or burning. The contention, therefore, of the appellant was negatived that petroleum coke was covered by the aforesaid provision of the Central Act.6. We are wholly unable to agree with the reasoning or the conclusion of the High Court with regard to the ambit of clause (i) of section 14 of the Central Act. The language is clearly wide and coal has been stated to include coke in all its forms. It is not denied that petroleum is one of the forms of coke. Therefore on a plain reading of the aforesaid clause it is incomprehensible how petroleum coke can be excluded from its ambit. It may be that the clause mentions coal only and then declares that that word shall include coke in all its forms. That shows that the object of the words which follow coal is to extend its meaning. In the writ petition it was stated in para 2 that "coke is the refuse left after distillation of coal, shale or oil and is called petroleum coke, Metellurgical coke or pitch coke, to indicate its source or origin; but all these are carbonacious material used for the same purpose and having same properties, more or less, main being.- Mixed Carbon, - Volatile Matters,- Ash and - Moisture, "In the affidavit in opposition that was filed by the Assistant Commissioner of Taxes, Assam, this a statement which does not appear to have been properly denied. All that has been stated in para 5 is that the word "coke" in clause 9(i) of sec. 14 implies coke obtained from coal only and does not include petroleum coke. The statement in the writ petition is very similar to the meaning of the word "coke" given in Websters New International Dictionary, Vol. I which is as follows :-"The infusible, cellular, coberent residue obtained when coal is subjected to destructive distillation. It consists mainly of carbon, is hard porous, and gray, and has a submettalic luster. Any similar substance left as a residue when petroleum, shale oil, etc., are distilled to dryness."Our attention has been invited by learned counsel for the State to the discussion in Encyclopaedi a Britannica, Vol. 5 on coke, coking and high temperature carbonization. We do not consider that when the Parliament used the word "coke" in section 14(i) of the Central Act it had any intention to give it a meaning other than the ordinary dictionary meaning which would cover petroleum coke. At any rate, the language employed is so wide viz. "Coke in all its forms that petroleum coke which is a from of coke cannot possibly be excluded merely by reference to the word "Coal."

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]6. We are wholly unable to agree with the reasoning or the conclusion of the High Court with regard to the ambit of clause (i) of section 14 of the Central Act. The language is clearly wide and coal has been stated to include coke in all its forms. It is not denied that petroleum is one of the forms of coke. Therefore on a plain reading of the aforesaid clause it is incomprehensible how petroleum coke can be excluded from its ambit. It may be that the clause mentions coal only and then declares that that word shall include coke in all its forms. That shows that the object of the words which follow coal is to extend its meaning. In the writ petition it was stated in para 2 that "coke is the refuse left after distillation of coal, shale or oil and is called petroleum coke, Metellurgical coke or pitch coke, to indicate its source or origin; but all these are carbonacious material used for the same purpose and having same properties, more or less, mainh andMoisture, "In the affidavit in opposition that was filed by the Assistant Commissioner of Taxes, Assam, this a statement which does not appear to have been properly denied. All that has been stated in para 5 is that the word "coke" in clause 9(i) of sec. 14 implies coke obtained from coal only and does not include petroleum coke. The statement in the writ petition is very similar to the meaning of the word "coke" given in Websters New International Dictionary, Vol. I which is as followsinfusible, cellular, coberent residue obtained when coal is subjected to destructive distillation. It consists mainly of carbon, is hard porous, and gray, and has a submettalic luster. Any similar substance left as a residue when petroleum, shale oil, etc., are distilled toattention has been invited by learned counsel for the State to the discussion in Encyclopaedi a Britannica, Vol. 5 on coke, coking and high temperatureWe do not consider that when the Parliament used the word "coke" in section 14(i) of the Central Act it had any intention to give it a meaning other than the ordinary dictionary meaning which would cover petroleum coke. At any rate, the language employed is so wide viz. "Coke in all its forms that petroleum coke which is a from of coke cannot possibly be excluded merely by reference to the word "Coal."