JUDGMENT
M.L. Penndse, C.J.
1. These two appeals are preferred by the original petitioners to challenge common judgment passed by the learned single Judge in two petitions being Writ Petitions Nos. 18383 and 18384 of 1991. By the impugned order, both the petitions were dismissed. The facts which gave rise to filing of the petitions are not in dispute and are required to be briefly stated to appreciate the grievance of the appellants in these two appeals.
2. The appellants are registered dealers under the Karnataka Sales Tax Act and are dealing in purchasing “leco” from Neyveli Lignite Corporation. Leco is not mentioned in any of the entries in the Schedules of the Karnataka Sales Tax Act. However, over the years leco was considered as coal subject to duty under entry 1 of the Fourth Schedule to the Act. The entry reads as under :
“Coal including coke in all its forms but excluding charcoal.”
The assessments of the appellants were completed for all years prior to assessment order 1988-89 by subjecting leco to duty at 4 per cent in accordance with rate prescribed under entry 1 of the Fourth Schedule. While the assessment for the year 1989-90 was under process, the Commissioner of Commercial Taxes issued a clarificatory circular on May 21, 1991. The circular, inter alia, prescribes that leco is taxable at 6 per cent under entry 10 of Part “C” of the Second Schedule. The said entry reads as follows :
“Charcoal at the rate of 6 per cent.”
The circular was issued in pursuance of the decision of single Judge of this Court reported in N. Ratanchand Jain v. Commercial Tax Officer, Circle IV [1992] 85 STC 470. In pursuance of the circular issued by the Commissioner, the assessment order dated May 25, 1991, was passed by the Commercial Tax Officer, Bangalore, completing the assessment for the year 1989-90. The appellants were required to pay duty at the rate of 6 per cent on “leco” on the basis that leco is equivalent to charcoal. The validity of the assessment order was challenged before the learned single Judge. The appellants also challenged notice dated July 22, 1991 issued by the Assistant Commercial Tax Officer (Intelligence), Bangalore, under section 28(1) of the Act demanding that the difference of duty of Rs. 97,130 for the assessment years 1986-87 to 1991-92 should be paid within a period of 7 days. The validity of the notice and the proposed action was challenged by separate petitions. Both the petitions were disposed of by the impugned order passed by the learned single Judge holding that the issue stands concluded by the decision of this Court in the case of Ratanchand Jain [1992] 85 STC 470. The appellants are challenging the legality of the order.
3. The learned counsel appearing on behalf of the appellants submitted that the circular issued by the Commissioner was under misconception that this Court had held that leco is equivalent to charcoal. It was urged that leco is not a charcoal but falls under entry 1 of the Fourth Schedule, i.e., coal in all its form but excluding charcoal. The learned counsel submitted and in our judgment, with considerable merit, that charcoal is manufactured from burning wood while leco is part of coal which comes from coal field. The distinction between the coal and leco is that leco is not a refined article, while the coal is one, but both coal and leco are taken out from the coal mines. In our judgment, leco cannot be equated with charcoal and consequently the circular issued by the Commissioner departing from the earlier consistent view that leco is coal in different form but excluding charcoal, was incorrect.
4. The counsel for the Revenue submitted that the circular issued is based on the decision of this Court in Ratanchand Jain’s case [1992] 85 STC 470. A perusal of the decision makes it clear that the assessment of Commissioner is not accurate. In Ratanchand Jain’s case a registered dealer had purchased leco and had claimed that leco is a trade name and is ordinarily understood as charcoal used as domestic fuel. The registered dealer made the claim with a view to get exemption available for charcoal. The Revenue disputed the claim relying upon the decision of the Division Bench of the Madhya Pradesh High Court reported in [1981] 47 STC 351 (Commissioner of Sales Tax v. Punjab Coal & Kutti Farm). The learned single Judge observed that while interpreting items for the purpose of taxation the court is not concerned with the scientific or technical meaning attached to them. The learned single Judge observed that leco is charcoal and the registered dealer is entitled to the exemption. We are afraid we cannot share the view of the learned single Judge. In our judgment, the decision in Ratanchand Jain’s case is entirely incorrect and overlooks the clear-cut distinction made in different entries in different Schedules of the Sales Tax Act. The leco can never be equated to charcoal and the learned single Judge was not right in giving interpretation to enable the trader to get the benefit of exemption. In our judgment, the liability to pay duty for leco is under entry 1 of the Fourth Schedule and the circular is erroneous. The consequential action taken by the authorities by service of notice dated July 22, 1991, must also be quashed.
5. Accordingly, both the appeals are allowed and the judgment dated August 27, 1991, passed by the learned single Judge in W.P. Nos. 18383 and 18384 of 1991 as well as circular issued by the Commissioner of Commercial Taxes on May 21, 1991, is quashed. The assessment order dated May 25, 1991, passed by the Commercial Tax Officer for the assessment year 1989-90 is also set aside and the Commercial Tax Officer is directed to pass fresh assessment order in pursuance of this judgment. The proceedings commenced by the Commercial Tax Officer by service of notice on July 22, 1991, is also quashed. In the circumstances of the case, there will be no order as to costs.
6. Writ appeals allowed.