Andavar and Company vs State of Tamil Nadu

Thanikkachalam, J.—Assessee is the petitioner. The assessee, Andavar and Company, is a dealer in firewood and pulpwood in

Manapparai. By his revised order dated January 10, 1983, the Deputy Commercial Tax Officer, Manapparai, had disallowed exemption already

granted on a turnover of Rs. 3,94,769. He has also levied additional sales tax. Aggrieved, the assessee filed an appeal before the Appellate

Assistant Commissioner (C.T.), Trichy, disputing the assessment of turnover of Rs. 3,94,769 and additional sales tax. The assessing authority has

revoked the original order by holding that the deduction allowed at the stage of original assessment was not correct. The Appellate Assistant

Commissioner has sustained the assessment on a turnover of Rs. 2,89,425 allowing deduction on the turnover of Rs. 1,05,344 as second sales of

timber. Admittedly, the disputed turnover of Rs. 2,89,425 is related to sales of firewood and karuvel trees cut from the fuel coupe taken from the

Forest Department. The Appellate Assistant Commissioner disallowed exemption relying upon the decision of this Court in Malayalee Stores v.

State of Tamil Nadu [1983] 52 STC 3. On considering the submissions made by learned counsel for the assessee as well as the department

representative, the Tribunal held that the assessing authority was correct in revising his original order by holding that the purchase turnover of

karuvel trees is assessable at 5 per cent. Accordingly, the order passed by the Appellate Assistant Commissioner sustaining the order passed by

the assessing authority was confirmed. It is against that order, the present revision has been preferred by the assessee.

Learned counsel for the petitioner/assessee submitted that in the present case the firewood sold related to cut bits of karuvel trees with bark.

The cut bits of karuvel trees are mainly used as firewood and not for other purposes. Karuvel trees are popularly known as firewood trees. The

fact that the purchaser Seshasayee Paper Mills used karuvel trees for producing pulp would not mean that karuvel trees are meant for preparing

pulp. In order to support that karuvel trees were sold as firewood, the assessee has produced bills issued by the Seshasayee Paper Mills and the

delivery note, wherein it was clearly stated that what was purchased was firewood. It was also pointed out that the Government Notification No.

(II)(1)/Rev/386(g)/74/March 4, 1974, also exempts firewood from levy of sales tax. In order to support the contentions put forward by the

assessee, learned counsel relied upon various decisions. Ultimately, it was submitted that the Tribunal was not correct in upholding the order

passed by the Appellate Assistant Commissioner in revising the assessment.

On the other hand, learned Additional Government Pleader (Taxes) submitted that the karuvel trees sold by the assessee were used by

Seshasayee Paper Mills for the purpose of producing pulp. Therefore, the bits of karuvel trees sold cannot be considered as firewood. Learned

Additional Government Pleader submitted that apart from the bills and the delivery note issued by the Seshasayee Paper Mills the assessee has not

produced any tangible materials to show that what was sold to Seshasayee Paper Mills was only firewood. According to the learned Additional

Government Pleader, since Seshasayee Paper Mills used the alleged firewood sold by the assessee as pulp producing product, what was sold by

the assessee cannot be called as firewood. Learned Additional Government Pleader also relied on certain decisions in order to support the

contentions put forward by her.

We have heard the rival submissions. The fact remains that originally the assessment was made by the assessing officer. In the assessment, sale

of karuvel trees was exempted from tax. But in the revised assessment, the assessing officer levied tax and additional tax on the sales turnover of

karuvel trees. According to the assessing officer, the sale of karuvel trees cannot be treated as sale of firewood which is exempted under the

Government notification. On appeal, the Appellate Assistant Commissioner confirmed the revised assessment made by the assessing officer. On

further appeal, the Tribunal confirmed the order passed by the Appellate Assistant Commissioner. The point for consideration in this revision is

whether the bits of karuvel trees can be called as firewood.

Admittedly, the assessee was a forest contractor and obtained karuvel trees from the forest. The Government notification as stated above,

exempts sales tax on firewood. According to the assessee, karuvel trees are firewood. Karuvel trees are cut into bits and they were sold as

firewood. According to the assessee, karuvel trees are commonly known as firewood. But according to the department, what was sold by the

assessee is karuvel trees. Seshasayee Paper Mills used the same for producing pulp and therefore, karuvel trees cannot be called as firewood. In

order to support his contention, learned counsel for the assessee produced bills and the delivery note issued by the Seshasayee Paper Mills. These

documents would go to show that what was sold by the assessee to the Seshasayee Paper Mills was firewood. The department contended that

since Seshasayee Paper Mills used karuvel trees as pulp producing product, it cannot be considered as firewood.

Reliance was placed on the decision in P.R. Lakshmi Vs. The State of Tamil Nadu, . According to the facts in that case, the assessee, sold

timber described in the sale agreement as ""blue-gum and wattle pulpwood"" or ""debarked and split eucalyptus blue-gum"" for use in the manufacture

of rayon or other kinds of man-made fibre and claimed exemption of those sales as sales of firewood under notification as stated above. On the

above facts, this Court held that the wood sold in that cases were eucalyptus blue-gum and wattle wood which as commercial commodities were

only pulpwood, and therefore the exemption relating to firewood under the notification dated March 4, 1974, could not be extended to those

sales. In the abovesaid decision, it was further held that apart from the particular specification in a sale agreement, regard should be had for the

colloquy of commerce and the common vocabulary of the market for distinguishing between firewood and other kinds of wood. Firewood, in

common parlance and as understood by the trade as well as by the consuming public, is not just any wood that can be used as logs of fuel.

Firewood is wood of a kind which has attained notoriety and more especially, where the wood is sold and purchased subject to specifications

which conduce the wood to particular purposes other than fuel, the goods sold cannot be regarded as firewood.

In the present case what was sold by the assessee was bits of karuvel trees with bark which is commonly known as firewood. Karuvel trees are

not used for producing pulp. Therefore the fact that Seshasayee Paper Mills used karuvel trees as pulp producing product would not in any way

take out the character of the said tree as firewood.

In Commissioner of Sales Tax v. Marwah & Co. [1979] 43 STC 435 the Allahabad High Court while considering section 3-A of the Uttar

Pradesh Sales Tax Act held that firewood as commonly understood includes all wood which are used primarily for purposes of fuel. Small pieces

of waste wood of different types of trees, called as kokat in the local area, which are one metre in length and are very small in diameter and

normally used only as fuel wood, would fall within the ambit of the word ""firewood"" as used in the notification issued under the U.P. Sales Tax Act,

1948. The fact that karuvel trees sold to paper mills which were used by them as raw material for manufacturing paper would not destroy their

character as firewood. It is a common user of an article and not its use that determines the character in which the very commodity is to be classified

under the notification.

In Saravanan Rexine v. Union Territory of Pondicherry [1983] 54 STC 77 this Court while considering the Pondicherry General Sales Tax Act,

Schedule Ill, entry 32 pointed out that user test may not be good law in view of the decision in Porritts and Spencer (Asia) Ltd. Vs. State of

Haryana, . In Mukesh Kumar Aggarwal & Co. v. State of Madhya Pradesh [1988] 68 STC 324, the Supreme Court while considering the M.P.

General Sales Tax Act, 1958, Schedule II, Part II, entry 32A, Part V, entry 12, Part VI, entry 1 held that in a taxing statute, words which are not

technical expressions or words of art, but are words of every day use, must be understood and given a meaning, not in their technical or scientific

sense, but in a sense as understood in common parlance and the particular terms used by the Legislature in the denomination of articles are to be

understood according to the common commercial understanding of those terms used and not in their scientific and technical sense.

Similarly, the Allahabad High Court in Commissioner of Sales Tax, U.P. v. Narain Das Barey Lal [1978] 42 STC 470 while considering the

U.P. Sales Tax Act held that as rice bran is used primarily for feeding cattle and, as in common parlance, it would be classified as a cattle fodder, it

would not go outside the purview of ""cattle fodder"" in Notification No. ST. 3471/X dated July 16, 1956, issued under the U.P. Sales Tax Act,

1948, only on account of the special use of extracting oil to which it is put by some consumers. Therefore, it would not go out of the purview of

cattle fodder.

According to the facts of this case, as already pointed out, the assessee sold bits of karuvel trees to Seshasayee Paper Mills as firewood. Bills

and delivery notes issued by the purchaser would go to show that what was sold by the assessee was only firewood. The fact that Seshasayee

Paper Mills was using the bits of karuvel trees as pulp producing product would not by itself change the character of karuvel trees from firewood.

This view, we have taken by following the aforesaid decisions cited supra. Accordingly, we hold that the assessing authority was not correct in

revising the original assessment and brought to tax the sales turnover of karuvel trees.

Accordingly, we set aside the order passed by the authorities below in levying tax on the sales turnover of karuvel trees. In the result, the order

passed by the authorities below including that of the Tribunal stands set aside. Original assessment made by the assessing officer stands restored.

Accordingly, the revision is allowed. No costs.

Petition allowed.