Commissioner of Sales Tax, M.P. vs The Agarwal Saw Mills, Seoni

P.V. Dixit, C.J.

In this reference u/s 44 of the Madhya Pradesh General Sales Tax Act, 1958, at the instance of the Commissioner of Sales Tax, the three questions which we have been asked to answer are:

Whether prior approval of the Sales Tax Commissioner was necessary in the instant case to the imposition of penalty by the assessing officer on the non-applicant u/s 11 (5) of the C.P. and Berar Sales Tax Act, 1947 under his order of 23-5-1955?

Whether timber "pharras" are firewood for the purpose of Item 17 of Schedule II to the C.P. and Berar Sales Tax Act, 1947 if they are sold as fuel and can be used only as such?

Whether under the facts and circumstances of the case, the sale of timber "pharras" for Rs. 3,913-15-3 was rightly excluded from the turnover as coming under Item 17 of Schedule II to the C.P. and Berar Sales Tax Act, 1947?

The Assessee is a forest contractor. In assessment proceedings for the period from 31st October 1951 to 18th October 1952 the Sales Tax Officer, Chhindwara, made an order u/s 11 (5) of the CP. and Berar Sales Tax Act, 1947 imposing a penalty of Rs. 60 on the Assessee. The Sales Tax Officer also rejected the claim of the aseessee for deducting from the taxable, turnover Rs. 3,913-15-3 on account of the value of ''timber pharras'' sold by it. The Assessee claimed that timber pharras was ''firewood'' within the meaning of entry No. 17 of Schedule II to the Act and was therefore exempt from tax tinder Section 6 of the Act of 1947. The order of the Sales Tax Officer was upheld in first appeal by the Appellate Assistant Commissioner. In second appeal filed by the Assessee before the Board of Revenue it was held that the penalty imposed on the Assessee was illegal inasmuch as prior approval of the Commissioner of Sales Tax for the imposition of the penalty had not been obtained as required by Section 16 of the C.P. and Berar Sales Tax Act. It was also held that the timber pharras was firewood and was therefore exempt from tax.

So far as the first question is concerned, the answer to it is furnished by the decisions of this Court in The Commissioner of Sales Tax v. Gulabchand 1963 MPLJ 372 : 1963 JLJ 468 (Misc. Civil Case No. 292 of 1962 decided on 7-2-1963), Commissioner of Sales Tax v. Laxmichand Misc. Civil Case No. 318 of 1962 decided on 27-2-1963 and Commissioner of Sales Tax v. M /s. Saheemal Champalal Misc. Civil Case No. 6 of 1963 decided on 4-3-1963. In these three cases, the question which we were asked to decide was whether in view of the proviso to Section 16 of the C.P. and Berar Sales Tax Act the prior approval of the Commissioner of Sales Tax was necessary for the imposition of a penalty u/s 10 (3) of the Act. We answered the question by saying that the prior approval of the Commissioner was necessary for the imposition of a penalty by a Sales Tax Officer. The proviso to Section 16 of the Act was as follows:

Provided that if the power to impose penalty conferred upon the Commissioner by Sub-section (3) of Section 10, Sub-section (5) of Section 11, Section 11-A, and Section 22-C is delegated by him under this section to any person appointed u/s 3 to assist him, such person shall not exercise the power without obtaining the previous approval of the Commissioner.

In view of the plain language of the proviso the reasons given by us in The Commissioner of Sales Tax v. Gulabchand(supra) for holding that prior approval of the Commissioner was necessary for imposing a penalty u/s 10 (3) of the Act, apply equally to the imposition of a penalty u/s 11 (5) of the Act. For those reasons the first question must be answered by saying that the prior approval of the Sales Tax Commissioner was necessary for the imposition of penalty on the Assessee u/s 11 (5) of the Act.

The other two questions are interlinked. If timber pharras can be regarded as firewood falling under entry No. II of Schedule 17 to the Act of 1947, then clearly by virtue of Section 6 of the Act no sales tax can be levied on the turnover of timber pharras. But the view taken by the Board that timber pharras is firewood is clearly untenable. The Board stated its reasoning thus:

According to the Oxford Dictionary, ''firewood'' means wood for burning fuel. Thus the dictionary meaning refers not to any particular type of wood but to any wood ''which is used as fuel.

This reasoning, which proceeds the assumption that any wood which can be burnt-for the matter of that anything which can be burnt-is firewood, cannot be accepted. The word ''firewood'' has not been defined in the Act. But it is a word of every day use and must therefore be construed in its popular and natural sense, that is to say, ''that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it''; see Ramavatar Budhaiprasad Etc. Vs. Assistant Sales Tax Officer, Akola, . Again, the entries enumerated in Schedule II to the Act being those of goods exempt from tax, they must be construed strictly. This is clear from the decision of the Supreme Court in The Union of India (UOI) Vs. The Commercial Tax Officer, West Bengal and Others, . ''Fire-wood'' no doubt, means ''wood for burning of fuel''. But the timber pharras which the Assessee sold is clearly not firewood. These pharras are planks of irregular shape and size and having a rough surface, which come out when timber is sawn. It is common knowledge that they are not used for fuel. They are generally used for fencing, for scaffolding, and sometimes for temporary roofing. They can no doubt be burnt. But as fuel they do not burn well and give smoke. Firewood is something which is peculiarly suited for burning and as fuel. Any place of furniture or even a door or window frame can be burnt. But that does not make a place of furniture or the frame firewood. The Board of Revenue observed that there was no material to show that timber pharras was not firewood. But no material was necessary for establishing what is common knowledge and for construing the word ''firewood'' in the sense in which it is generally understood. In our opinion, timber pharras is not firewood falling under item 17 of Schedule II to the C.P. and Berar Sales Tax Act, 1947, and the Assessee''s turnover in respect of sales of timber pharras cannot be excluded from the taxable turnover. Our answer to questions 2 and 3 are in the negative.

The Assessee shall pay the costs of this reference. Counsel''s fee is fixed at Rs. 100.