Commercial meaning in tax entries: packing material was not separately taxable, while coal ash was treated as included in coal.

Packing material used with cloth bales was not treated as a separate taxable sale because tax could arise only on proof of an express or implied bargain to sell the bardana and patti, and the department did not discharge that burden. Coal ash was treated as falling within the entry for coal, since taxing words were read in their ordinary and commercial sense and the term "coal including coke in all its forms" was held wide enough to cover coal ash as a low-grade fuel. The note states that, in taxing entries, commercial understanding controls and an implied sale of packing material cannot be inferred without evidence of the parties' intention.

---

---

Issues: (i) whether there was an implied sale of packing material, namely bardana and patti, along with the sale of cloth bales, so as to make the packing material taxable; (ii) whether coal ash fell within the entry relating to coal.

Issue (i): whether there was an implied sale of packing material, namely bardana and patti, along with the sale of cloth bales, so as to make the packing material taxable.

Analysis: Tax could be levied on the packing material only if there was an express or implied agreement to sell it for a price. No separate price was charged for the packing material, and the cloth was sold in bales because that was a convenient and cheap mode of transport. The value of the packing material was insignificant compared with the price of the cloth, and the department had the burden of proving that the parties intended a sale of the packing material. On the facts found, the department did not discharge that burden.

Conclusion: The question is answered in the negative and the finding of taxable sale of packing material is against the revenue.

Issue (ii): whether coal ash fell within the entry relating to coal.

Analysis: The expression "coal including coke in all its forms" was construed according to its ordinary and commercial meaning. Coal ash, being commercially treated as cinder and used as a low-grade fuel, falls within that expression. The entry was therefore wide enough to include coal ash.

Conclusion: The question is answered in the negative against the assessee and coal ash is held to be included in coal.

Final Conclusion: The reference was disposed of by holding that the packing material was not taxable as a separate sale, while coal ash was taxable as coal under the relevant entry.

Ratio Decidendi: In taxing entries, a commodity must be understood in its ordinary and commercial sense, and an implied sale of packing material cannot be inferred unless the department proves that the parties intended to sell and buy it as part of the bargain.

---