AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 885
X X X X Extracts X X X X
X X X X Extracts X X X X
....wood, waste pulp, coal and furnace oil. According to it in the process of manufacturing paper and at the end of the manufacturing operation a residue of coal is left over which is then sold by the revisionist. Admittedly this residual article in Assessment Years 1999-2000, 2000-01, 2001-02 was treated to be an article falling under the entry of "coal including coke in all its form...." and thus taxed at the rate of 4%. From Assessment Years 2002-03, the Department has changed its position and has held that this residual article is liable to be treated as "unclassified" and therefore taxable at the rate of 10%. This shift in the view of the Department is based primarily on two decisions of the Court rendered in Commissioner of Sales Tax Vs. Modi Spinning & Weaving Mills 2004 NTN (VOL 25)-958 and Commissioner of Sales Tax Vs. British India Corporation Limited 2004 NTN (VOL 25)-1230. In CTR 1239 of 2012, the Tribunal has treated the product to be coal dust and therefore exigible to tax as an unclassified item. It has taken the position that coal dust would not stand covered under the entry "coal including coke in all its forms..." and in light of the decisions rendered by the Court i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cide the issue based upon the principles enunciated in this judgment. This decision, Sri Agrawal points out, was dealing with the commodity "cinder" and not coal dust. He further submitted that this decision itself is based upon an understanding that the items or commodities mentioned in the Schedule were liable to be understood bearing in mind their intrinsic character and nature. He submitted that Mahabir Singh Ram Babu proceeded on the premise that coal is a mineral which is extracted from earth while cinder is not. The submission was that the decision proceeded on a fallacious line of reasoning and must be held to be impliedly overruled in light of the observations made by the Supreme Court in CST MP Vs. Jaswant Singh Charan Sigh 1967 (XIX) STC 469 wherein the Court had in unambiguous terms held that the fact that coal was a mineral product would not be decisive of the issue and that while interpreting items in statutes like the Sales Tax Act, resort should not be had to a scientific or technical meaning of the term but to their popular meaning or meaning attached to them by those dealing in them, thus essentially reiterating the "commercial use" or "common parlance" test. Sri ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble properties of coal are spent away and lost, the residual product could not be classified or placed in the same company as the article coal. It is this decision which was subsequently relied upon in both Modi Spinning and British India Corporation. It becomes relevant to note that Modi Spinning was a decision on the issue of whether "coal cinder" was liable to be taxed as coal. It was in this context that the learned Single Judge proceeded to reiterate the conclusions recorded in Mahabir Singh Ram Babu and held that cinder could not be taxed as coal. It is also relevant to note that in Modi Spinning the Court proceeded to further note that in the facts of that case the assessee had not brought on record any evidence to show that the commodity sold by it had retained any combustible properties. Insofar as British India Corporation is concerned, the said decision was dealing with the taxability of "coal ash". However, even in this decision the following pertinent observations came to be made by the Court in respect of "coal dust". The observations in this context read thus:- "2. ..........In that case the Court was dealing with the item "Coal dust". It has been held that the coa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ible property as coal has. It is used for similar purposes as coal. We doubt if, in the popular sense, one would say that coal dust is not the same commodity as coal. In our opinion, coal dust is included within the word "coal" as used in entry 33 of the notification dated 31st March, 1956. We answer the question referred to us in the affirmative and in favour of the assessee. The assessee would be entitled to its costs which are assessed at Rs. 100. The fee of the learned counsel is also assessed at the same figure." The Division Bench proceeded to hold that "coal dust" has the same combustible properties as coal and is put to similar uses. It consequently held that "coal dust" would stand included within the meaning of the expression "coal" as used in the concerned notification. This Court therefore, has two decisions namely British India Corporation as well as District Cooperative Development Federation which hold that "coal dust" is liable to be taxed in the company of coal and cannot be treated as unclassified items. The judgments of the Court in Mahabir Singh Ram Babu, Modi Spinning and British India Corporation cannot be understood or applied without bearing in mind the par....
X X X X Extracts X X X X
X X X X Extracts X X X X
....residual commodity had not lost all combustible properties and therefore, it was liable to be classified and taxed under the entry of "coal, including coke in all its forms..." The Court lastly takes note of the fact that the Department itself in the three preceding Assessment Years had proceeded to accept the commodity to be taxable at the rate of 4%. While it is true that the principles of res judicata may not strictly apply to taxation assessments, insofar as generic issues inter partes are concerned, they must bind. In issues of classification, the Department cannot be permitted to vacillate unless there be new material and evidence which may justify or warrant a change in stance. It is these principles which have been enunciated by the Supreme Court in Bharat Sanchar Nigam Limited wherein it has been held that even though principles of res judicata may not apply but the theory of precedent or the precedential value of earlier pronouncements are binding inter partes. It would be pertinent to refer to the following observations as they appear in the decision of the Supreme Court in Bharat Sanchar Nigam Limited:- "...The Courts will generally adopt an earlier pronouncement of ....