Judgement

GROVER, J.:- This is an appeal certificate from a judgment of the Assam and Nagaland High Court.

2. The appellant is a company incorporated under the Indian Companies Act, 1956 in the State of Assam. It started its business on November 17, 1962 for the first time. Its business includes sale and purchase of petroleum coke. Until September 1, 1964 no sales tax was levied or was payable by the company on the sale of petroleum coke because in Schedule 3 of the Assam Sales Tax Act, 1947, hereinafter called the Assam Act , which enumerated the goods on which tax was not payable, Entry 7 read "coal, coke and coalgas". By Amending Act 14 of 1964 the said Entry was deleted from Schedule 3 to the Assam Act with effect from September 1, 1964. By means of a letter dated July 7, 1964 the Superintendent of Taxes, Assam, informed the company that the petroleum, coke and gas were taxable at the rate of 5 Np in a rupee under the Assam Act and directed the company to submit the return for all the periods prior to September 1, 1964 and also apply for registration under the Assam Act for the sale of petroleum coke within the State of Assam. The company preferred a petition for revision under Section 31 (2) of the Assam Act challenging the order of the Superintendent of Taxes. This petition was dismissed by the Commissioner of Taxes on September 8, 1965. During the pendency of the said revision petition the Superintendent of Taxes by his letter dated August 14, 1965 modified his earlier order to the extent that the demand was confined to the sale of petroleum, coke subsequent to September 1, 1964. The Company then moved the High Court under Article 226 of the Constitution which was dismissed.

3. In the writ petition as also the return filed in reply thereto and before the High Court the provisions of certain other enactments were mentioned. These were the Assam Finance Sales Tax Act, 1956 as amended from time to time and the Assam Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants Taxation Act, 1956 as amended. It is unnecessary to refer to their relevant provision because before us it is common ground that the tax would be payable under the Assam Act, the only question being about the rate. Under the Assam Act the rate chargeable was 5 paise per rupee. But it has been claimed on behalf of the appellant that by virtue of the provisions of the Central Sales Tax Act 1956, hereinafter called the "Central Act", the rate at which the tax would be payable is 2 paise per rupee.

Section 14 declares, inter alia, that coal including coke in all its forms constitutes goods which are of special importance in inter-State trade or commerce. Section 15 (1) of the Central Act as it stood at the relevant time was in the following terms:-

Section 15. "Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions, namely:-

(a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed (two per cent.) of the sale or purchase price thereof, and such tax shall not be levied at more than one stage.

(b) .........................."

It may be mentioned that by Amending Act 13 of 1966 3% was substituted for 2% with effect from July 1, 1966.

4. It is not disputed that if petroleum coke is covered by Clause (i) of Section 14 which reads "coal including coke in all its forms" the State was not competent to levy tax at a rate exceeding the one given in Section 15 (a) of the Central Act. Before the High Court it was common ground that petroleum coke is used mainly in industries dealing with the manufacture of carbon products and it differs in material constituents, quality, utility and composition from the ordinary coke used as fuel. It is used largely in the manufacture of dry cells, carbon electrodes and electric furnace resistance elements. Reference has a