TMI Blog2016 (5) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid provision and has not levied double taxes, because it is levying only on difference of sale price and purchase price. Therefore, manufactured smokeless soft fuel i.e. smokeless coke out of coal is distinct commodity and also understood in common parlance different from coal, therefore, commodity manufactured is liable to tax under Section 9 of the Madhya Pradesh Commercial Tax Act, 1994. - Decided against the petitioner - Writ Petition No. 8796/2012, Writ Petition No. 1647/2014, Writ Petition No. 1650/2014 - - - Dated:- 26-2-2016 - P. K. Jaiswal And Alok Verma, JJ. For the Petitioner : Sumeet Nema For the Respondent : P. Bhargava JUDGMENT P. K. Jaiswal, J. Since the common question of law is involved in these petitions to decide, therefore, they are heard together and disposed of by this common order. For the sake of convenience the facts are borrowed from W.P.8796/2012. 2. The petitioner is registered dealer under Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 up to 31.3.2006 and w.e.f. 1.4.2006, is registered dealer under the M.P. VAT Act, 2002, as well as under the provisions of Central Sales Tax Act, 1956. 3. The petitioner comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of manufacturing and a new commercial commodity comes out after the manufacture process is over. In respect of Entry (ia) of Section 14 of Commercial Sales Tax Act, 1956, it is held that, these entries for the purpose of rate of tax and for the purpose of claiming deduction from the turnover by declared goods mentioned under Section 14 of the Central Sales Tax of 1956 will be taxed @ of 4%. It means Coal, Coke, Coal Ash and Cinder, which are the forms of coal are taxable @ of 4%. The stand of the department before the revisional authority is that the Higher Court has not said that, if tax is paid on coal then, after burning the coal, remained cinder or coal ash will not be taxed again. Because after burning the coal, the remainder coal or coal ash, which can again be used for the purpose of burning is a form of coal, but it become different commercial commodity, therefore, in-spite of the fact it falls under Entry No.(ia) of Section 14, is again taxable @ of 4% and dismissed the revision application on 24.8.2012. 8. It is this order, which is impugned in the present petition on the ground that smokeless coke is only refined form of coal and it cannot be treated as different c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above factual and legal position and further erred in not considering the two judgments of the Hon'ble Supreme Court and only basing it's order on the judgment delivered by the M.P. Commercial Tax Appeal Board, Bhopal on 12.6.2012 in various appeal (Annexure/D) and erred in law in not allowing deduction under Section 2(w)(v). 11. Shri Sumit Nema, learned counsel for the petitioner has drawn our attention to the decision of the larger Bench of this Court in the case of Addl. Commissioner of Sales Tax V/s. M/s. S. Kumar Ltd. , AIT 2008-308-HC wherein, it has been held that the Coal Ash is Cinder and covered by the term Coal in Entry No.22 in Part V of Schedule II of the Commercial Tax Act and, therefore, it is not exigible to tax under Entry No.39 in Part IV. The larger Bench also held that the decision in Mansingh Ka Oil Mills Pvt. Ltd. , V/s. Addl. Regional Asstt. Commissioner of Sales Tax, Khandwa Anr. (M.P. No.1891/1983, decided on 8.9.1992), takes the correct view, though it is based on concession and approved the view taken in Commissioner of Sales Tax V/s. Samathmal Dhoolchand (Misceelaneous Civil Case No. 253 of 1967) decided on 23.12.1969 and Binod Mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'manufacture' for the purpose of the said clause, namely: ... (xvi) Conversion of coal into coke, excluding mechanised plant; .... 16. From the perusal of the definition of manufacture and at S. No.(xvi) Conversion of coal into coke, excluding mechanized plant is mentioned as nonmanufacture process. It means though the conversion of coal into coke is process and manufactured, but the State Government has excluded this activity of conversion of coal into coke carried out in the way of other than mechanised plants from the purview of the terms manufacture. 17. The petitioner is engaged in the business of conversion of coal into smokeless soft fuel, ie., smokeless coke by application of mechanized plants. Therefore, it cannot claim of tax paid sale of manufactured coke from its turnover, hence is liable to pay tax on the sale of smokeless softfuel, ie., smokeless coke. 18. The Apex Court in the case of M/s. K.A.K Anwar Co. V/s. State of Tamil Nadu reported as (2012) 49 TLD SC 377 has held in para 16 which reads as under :- Whenever the legislature wanted different goods placed in the same entry to be regarded as a single commodity it expressl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pting the coal. The appellant manufactures coal briquettes by compiling the hard coke breeze mechanically with the help of cinders which is usually 5% of the total hard coke breeze. In the compilation of the hard coke breeze, 95% of the hard coke breeze, which is known as coal-dust or breeze coke is taken which is compiled with the help of clay and molasses. Hence, in our opinion, coal briquettes is a different commercial commodity from coal. Moreover, even if it is not a different commercial commodity, the process of making coal briquettes will amount to a 'manufacture' as it is processing, treating or adapting coal. In our opinion, by the processing of coal to make coal briquette, the coal dust loses its identity. Coal briquettes and coal dust are two different commodities in substance as well as in characteristics. The coal briquettes are altogether in different shape, form and moisture as well as characteristics, as compared to coal dust. 20. In the case of Samathmal Dhoolchand, (supra), the question considered by the Divsion Bench was to whether Coal Ash is coal and comes under Entry No.1 Part III of Schedule II of the Act or whether it comes under part VI of Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conversion of coal into Smokeless Soft Fuel (SSF), it becomes a new and different commercially marketable commodity and taxable at the rate of 4%. 23. There was no need to list the coal and coke in other forms separately, because Entry No.22 of Part V of Schedule-II of the Madhya Pradesh Commercial Tax Act, 1994 is wide enough to cover all varieties of coal and byproducts of coal. Smokeless soft fuel fuel i.e. smokeless coke is a different commodity, its use is different from coal and coal-tar and carbon to some extent is separated from the coal by process of heating, burning and quenching, therefore, the manufactured item becomes different from coal. Provision of Section 9-B of the Madhya Pradesh Commercial Tax Act, 1994 is clear on this point and the Department has levied tax, in accordance with the aforesaid provision and has not levied double taxes, because it is levying only on difference of sale price and purchase price. 24. Manufactured smokeless soft fuel i.e. smokeless coke out of coal is distinct commodity and also understood in common parlance different from coal, therefore, commodity manufactured is liable to tax under Section 9 of the Madhya Pradesh Commercial T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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