# JN])JAN CARBON LTD v. SUl'ERINTENDENT OF TAXES, GAUHATI & ORS

- **Citation:** [1972] 1 S.C.R. 316
- **Court:** Supreme Court of India
- **Decided:** 1971-08-18
- **Case number:** Civil Rule No. 28 of 1966
- **Bench:** K. S. Hegde, A. N. Grover
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jn-jan-carbon-ltd-v-sul-erintendent-of-taxes-gauhati-ors-5358
- **Pages:** 4

## Headnote

Assam Sales Tax Act, 1947, Sch. 3 as amended by Assam Act 14
of 1964--Central Sales Tax Act, 1956, ""
14(1)
and
IS-Petroleum
1·oke, if 'declared goods'.
The appCUant was carrying on the hl1sincss of sale and purchase of
petroleum co1<e.
By the Amending Act (Assam) 14 of 1964 sales-tax
\Vas leviable on the sale of' pt::troleum coke, under the Assn1n
Sales Tax:
Act, 1947. Under the Act the rate chargeable was 5%. The appellant
however contended that under s. 14 of the Central Sales Tax Act, 1956,
coal, including coke in all. its forms, was one of the 'declared goods' and
that under s. 15 as it stood at the relevant time, the tax leviable could not
exceed 2%.. The High Court held against the assessee on the ground that
the word 'coke' implied only coke obtained from coal.
Allowing the appeal to this Court,
HELD :
Parliament used the word 'coke' in s. 14( I) of t.hc Central
Act in its ordinary dictionary meaning which would cover petroleum coke.
[319 BJ
Since the clause mentions that coal shall include coke in aU its forms,
the object was to extend the meaning of 'coal' to include pctroleurn cok-.:
which is one of the forms of coke. [318 G-H; 319 Fl

## Text

316
JN])JAN CARBON LTD.
v.
SUl'ERINTENDENT OF TAXES, GAUHATI & ORS.
August 18, 1971
[K. S. HEGDE AND A. N. GROVER, JJ.]
Assam Sales Tax Act, 1947, Sch. 3 as amended by Assam Act 14
of 1964--Central Sales Tax Act, 1956, ""
14(1)
and
IS-Petroleum
1·oke, if 'declared goods'.
The appCUant was carrying on the hl1sincss of sale and purchase of
petroleum co1<e.
By the Amending Act (Assam) 14 of 1964 sales-tax
\Vas leviable on the sale of' pt::troleum coke, under the Assn1n
Sales Tax:
Act, 1947. Under the Act the rate chargeable was 5%. The appellant
however contended that under s. 14 of the Central Sales Tax Act, 1956,
coal, including coke in all. its forms, was one of the 'declared goods' and
that under s. 15 as it stood at the relevant time, the tax leviable could not
exceed 2%.. The High Court held against the assessee on the ground that
the word 'coke' implied only coke obtained from coal.
Allowing the appeal to this Court,
HELD :
Parliament used the word 'coke' in s. 14( I) of t.hc Central
Act in its ordinary dictionary meaning which would cover petroleum coke.
[319 BJ
Since the clause mentions that coal shall include coke in aU its forms,
the object was to extend the meaning of 'coal' to include pctroleurn cok-.:
which is one of the forms of coke. [318 G-H; 319 Fl
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1612 of
J 968.
Appeal from the judgment and order dated February 16, 1968
of the .Assam and Nagaland High Court in Civil Rule No. 28 of
1966.
C. K. Daphtary, M. C. Chagla, J.B. Dadachan;i, P. D. Himaf·
sinf(ka, B. P. Maheshwari and /. N. Shroff, for the appellant.
Nauni~ Lal and Swara11;1 Sodhi, for the respondents:
The Judgement of the Court was delivered by
Grover, J. This is an appeal by certificate from a judgment of the Assam and Nagaland High Court.
The appellant is a company incorporated under the
Indian
Companies Act 1956 in the State of Assam.
1t started its businei;s on November 17, 1962 for the first time.
lts business includes sale and purchase of petroleum coke.
Until September !.
1964 no sales tax was levied or was payable by the company on
the sale of petroleum coke because in Schedule 3 of the Assam
Sales Tax Act 194 7, hereinafter called the 'Assam Act'.
which
enumerated the goods on which tax was not payable, Entry 7
A
B
c
D
E
F
G
H
INDIAN CARBON v. SUPDT, OF TAXES (Grover, J.)
317
·A
read ".coal, coke and coalgas".
By Amending Act 14 of 19M
the said Entry was deleted from Schedule 3 to the Assa'm Aet witk
' effect from, September l, 1964.
By means of a letter dated July
7, 1964 the Superintendent of Taxes, Assam, informed the company that the petro]eum coke and gas were taxable at the rate of
5 Np in a rupee under the Assam Act and directed the company
B
to submit the return for all the periods prior to September 1, 19(;.(
and also apply for registration under the Assam Act for the sale of
petroleum coke within the State of Ass~. The company pre~
ferred a petition for revision under s. 31 ( 2) of the Assam Act
challenging the order of the Superintendent of Taxes.
This peti-
- tion was dismissed by the Conunissioner of Taxes on September 8.
c
1965.
During the pendency of the said revision petition the
Superintendent of Taxes by his letter dated August
14,
1965
D
E
F
G
H
- modified his earlier order to the extent that the demand was confined to the sale of petroleum coke subsequent to September 1,
1964.
The company then moved the High Court under Art. 226
of the Constitution which was dismissed.
In the writ petition as also. the return filed in reply thereto
and before rthe High Court the provisions of certain other enactments were mentioned.
Thes'e were the Assam Finance Salei
Tax Act 19 5 6 as amended from time to time and the
~am
(Sales of Petroleum and, Petroleum Products; ..... ) Act 1956
as amended. It is unnecessary to refer to their relevant provisions because before us 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 "Central Act", the rate at . which the tax
would be payable is 2 paise per rupee.
- Section 14 declares, inter alia, that coal including coke in all
its forms constitutes goods which are of special importance 'in_
inter-SJate .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.
2-1340Sup.CJ/71
318
SUPREME COURT REPORTS
[ 19 72] I S.C.R.
(b)
"
It may be mentioned that by Amending Act 13 of 1966 3% was
substituted for 2% with effect from July 1, 1966.
It is not disputed that if petroleum coke is covered by clause
A
(i) of s. 14 which reads "coal including coke in all its forms" the
B
State was not competent to levy tax at a rate exceeding the one
given ins. 15 (a) of the Central Act.
Before the High Court it
was common ground that petroleum coke 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 c
manufacture of dry cells, carbon electrodes and electric furnace
resistance elements.
Reference has also been made in the judgment to what is stated in 'Chemical Engineers' Handbook', 3rd
Edn., at page 1566 :-
"Coke is a hard, dense, infusible carbonization
residue that ranges from a dull gray-black to a silvery
D
grey; 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 cellular structure, which primarily
depends upon the kind of coal used and the rate of
heating during the carbonization process."
E
The High Court was of the view that the word 'coal' includes coke
in all its forms in clause (i) of s. 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
F
covered by the aforesaid provision of the Central Act.
We are wholly unable to agree with the reasoning or the conclusion of the High Court with regard to the ambit and scope of
clause (i) of s. 14 of the Central Act.
The language is clearly
wide and coal has been stated to include coke in all its forms.
It G
is not denied that petroleum coke 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
H
meaning.
In the writ petition It was stated in para 2 that "coke
is the refuse left after destructive distillation of coal, shale or oil
and is called Petroleum coke. Metallurgical coke or pitch coke,
A
B
c
D
E
F
G
INDIAN CARBON v. SUPDT. OF TAXES (Grover, J.)
319
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 wru> filed by the Assistant Commissioner of Taxes, Assam, this statement does not appear to have
been properly denied.
All that has been stated in para 5 is that
the word "coke'' in clause ( i) of s. 14 implies coke obtained from
coal only and does not include petrolewn coke.
The statement
in the writ petition is very similar to the meaning of the word
"coke" given in Webster's New International Dictionary; Vol. l
which is as follows :-
'The infusible, cellular, coherent residue obtained
when coal is subjected to
destructive distillation. It
consists mainly of carbon, is hard, porous, and gray,
and has a submetallic 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 Encyclopaedia Britannica, Vol. 5 on coke,
coking and high temperature carbonization.
We do not consider
that when the Parliament used the word "coke" in s. 14(i) of the
Central Act it had any intention to give it a meaning other than
ihe 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 form of coke
cannot possibly be excluded merely by reference to the word
"Coal".
For the rea,ons given above the appeal is allowed and the
Judgment of the High Court is set aside.
The writ petition shall
stand allowed only to the extent that the State will be entitled to
levy tax under the Assam Act not exceeding the rate given in
cl. (a) of s. 15 of the Central Act.
The appellant shall be entitled to its costs in this Court.
V.P.S.
Appeal allowed.