Popular and commercial meaning of 'coal' includes charcoal for sales tax classification

Charcoal was held to fall within the commercial and popular meaning of "coal" in the relevant sales tax entry, so its sales were treated as second sales and not first-sale turnover liable to tax. The controlling test for a fiscal entry is how the commodity is understood in ordinary trade and by purchasers, not a narrow or technical meaning. The Tribunal's reliance on the deleted exclusion of firewood and charcoal from another schedule entry was rejected because that provision had been removed with effect from 1 April 1964. The operative result was that charcoal remained within the scope of "coal" for the assessment entry.

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Issues: Whether charcoal is included in the word "coal" in item 1 of Schedule II to the Madras General Sales Tax Act so as to treat the sales as second sales not liable to tax.

Analysis: The controlling test for a fiscal entry is the popular and commercial meaning of the word as understood by persons dealing in and purchasing the commodity. The Tribunal's distinction based on the exclusion of firewood and charcoal from item 26 of Schedule I was not accepted, as that item had been deleted by Madras Act 7 of 1964 with effect from 1 April 1964. The facts were held to be covered by the Supreme Court's view that the term "coal" in a taxing statute must be understood in its ordinary commercial sense.

Conclusion: Charcoal falls within the word "coal" for the relevant sales tax entry, and the turnover was not liable to tax as first-sale turnover.

Ratio Decidendi: In construing a fiscal entry, the commodity must be understood in its popular and commercial sense, and charcoal is included within "coal" when so understood.

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