1. At the instance of the Commissioner of Sales Tax, the Board of Revenue has stated the case under Section 44 of the Madhya Pradesh General Sales Tax Act, 1958, and referred to this Court for its opinion the following question of law :
Whether charcoal is covered under entry No. 1 of Part III of Schedule II to the M.P. General Sales Tax Act, 1958, and is taxable at the rate of 2 per cent, or will be taxable at the rate of 4 per cent. under entry No. 1 of Part VI of Schedule II to the M.P. General Sales Tax Act, 1958?
2. The petitioner is a dealer in firewood and charcoal. He was assessed to sales tax under Section 18(6) of the Act for the period 29th March, 1962, to 29th April, 1962, on the ground that, during this period, he did not have any registration certificate. The Additional Sales Tax Officer, Ujjain, and the Additional Appellate Assistant Commissioner, Indore, concurrently held that charcoal was not covered by entry No. 1 of Part III but fell under the residuary entry No. 1 of Part VI and so the sales of that commodity were taxable, at the rate of 4 per cent, of the price. In second appeal, the Board of Revenue took a different view. This is what the Board stated :
The assessing officer had taxed the appellant on the sale of charcoal at the rate of 4 per cent, under Part VI of Schedule II to the Act. The contention of the appellant is that charcoal is included in, and covered by, item No. 1 of Part III of Schedule II to the Act and should, therefore, have been taxed at the rate of 2 per cent. instead of 4 per cent. The question is whether charcoal is covered by the word 'coal' appearing at item No. 1 of Part III of Schedule II to the Act. Charcoal does not find a separate mention in any of the items of this Schedule or any other Schedule to the Act. For the meaning of coal, I have consulted Blackies Concise Dictionary, New Edition, published in London. At page 134 of this Dictionary, the meaning of coal is given as below :
Coal: Kol: A piece of wood or other combustible substance burning or charred ; charcoal; a cinder ; now, usually a solid black substance found in the earth, largely employed as fuel, and formed from vast masses of vegetable matter deposited through the luxurious growth of plants in former epoch of the earth's history.
From the meaning of coal given in Dictionary, the word coal also includes charcoal or charred wood. Charcoal should, therefore, have been taxed at the rate of 2 per cent, under entry No. 1 of Part III of Schedule II and not at the rate of 4 per cent, under Part VI of Schedule II.
Being dissatisfied, the Commissioner successfully moved the Board to make a reference and that is how the matter is before us.
3. There is no doubt that the word " coal" as originally understood in England was sufficiently wide to include charcoal. But there its use in that sense has become obsolete. The usual sense in which it is now used connotes a firm, brittle (generally black) carbonaceous rock derived from mines. This will be clear from any standard dictionary. The Board has referred to the Blackies Concise Dictionary. We may mention the Chambers's Twentieth Century Dictionary which gives the meaning of coal as "a firm, brittle, generally black combustible carbonaceous rock derived from vegetable matter (the usual sense now)." But in India the English word "coal" as used in commerce includes charcoal. It is now well-established that the word "coal" occurring in a fiscal statute has to be understood in its popular and commercial sense: His Majesty the King v. Planters Nut and Chocolate Company Limited (1951) C.L.R. (Ex.C.)122 at p. 123, K. V. Varkey v. Agricultural Income-tax and Rural Sales Tax Officer [1954] 5 S.T.C. 348 and Madhya Pradesh Pan Merchants Association, Santra Market, Nagpur v. State of Madhya Pradesh (Sales Tax Department) [1956] 7 S.T.C. 99. We derive further support for this view from the fact that sales of both coal and firewood have been taxed at 2 per cent, and there does not appear to us to be any good reason for treating charcoal differently. In our opinion, charcoal is covered by entry No. 1 of Part III of Schedule II of the Act and sales of charcoal are taxable at 2 per cent.
4. We answer the reference in the manner indicated above and direct that the Revenue shall pay all costs of this reference. Hearing fee Rs. 75.