Kumar Agarwal & Ors Vs. State of Madhya Pradesh & Ors  INSC 384
(18 December 1987)
M.N. (J) VENKATACHALLIAH, M.N. (J) NATRAJAN, S. (J)
1988 AIR 563 1988 SCR (2) 501 1988 SCC Supl. 232 JT 1988 (1) 50 1988 SCALE (1)1
Pradesh General Sales Tax Act, 1958: Schedule 11 Part 1I Entry 32A and Part V,
Entry 12-Stacks of 'Eucalyptus wood' sold by forest department after separating
the 'Ballies' and 'Poles'-Whether 'Timber' or 'firewood'- Llability for sales
Words and Phrases-'Timer'-'Fire'-wood'-Meaning of.
Forest Department of Madhya Pradesh sold to the appellants, who are dealers in
timber, stacks of "eucalyptus-wood" after separating the
"Ballies" and "poles". Sales tax at the rate of 16%
ad-valorem leviable on the sale of 'timber' under Entry 32A of part II of
Schedule Il of the Madhya Pradesh General Sales Tax Act, 1958, was sought to be
recovered from the appellants on the grounds that what was sold was 'timber'.
The levy was challenged by the appellants in the High Court of Madhya Pradesh.
High Court rejected the appellants' contention that what was sold, being
left-overs after the extraction of "poles" and "Ballies",
was merely 'fire-wood' within the meaning of and attracting entry No. 12 of
Part V of Schedule II of the Act and thus liable to sales tax only at the rate
of 3%. The High Court upheld the levy on the view that the goods were 'Timber'
and attracted entry 32A of Part II. The High Court took the view that where the
wood was not, in the normally accepted commercial practice, fire wood, and more
especially, where the wood was sold and purchased subject to specifications
which conduct the wood to particular purposes other than fuel, the goods sold
cannot be regarded as firewood.
appellants' contentions reiterated before this Court were (t) that what was
sold were the left-overs and remnants, (2) that the forest department had
itself described the goods in the tender notice as 'fire wood heaps', (3) that
the wood-stacks could, by no stretch of imagination, be held to answer the
well-known concept of 'Timber', and (4) that the wood sold was 'fire-wood' or
at all events, plain 'wood' not amounting to 'Timber' or 'firewood' in which
case it fell within the residuary entry.
The respondents, on the other hand, urged that the 'wood' sold did not admit of
being described as 'fire-wood' because nobody used eucalyptus wood as fire-wood
due to its very high cost.
the appeal in part and remitting the matter to the High Court it was, ^
(I) The finding of the High Court that the goods was 'Timber' appears to have
been reached as necessary consequence and logical corollory of the goods not
being 'fire-wood'. If the wood is pot "fire-wood" it need not
necessarily and for that reason alone be 'Timber'. All wood is not timber as,
indeed, all wood is not 'fire-wood' either though perhaps it may not be
incorrect to say that both 'firewood' and 'Timber' are 'wood' in its generic sense.[508C]
(2) All parts of portions of even a timber tree need not necessarily be
'Timber'. Some parts are timber, some parts merely 'fire-wood', and yet others
(3) In a taxing statute words which are not technical expressions or words of
art, but are words of everyday use, must be understood and given a meaning, not
in their technical or scientific sense, but in a sense as understood in common
parlance i.e. "that sense which people conversant with the subject matter
with which the statute is dealing, would attribute to it. " Such words
must be understood in their popular sense. [505B-C] (4) The use to which the
'goods' are capable of being put is not determinative of the nature of the
goods; nor even the nomenclature of the goods as given by till theoretic is
determinative. The fact that the purchasers were dealers in timber is also not
conclusive. [508G] (5) The expression 'Timber' has an accepted and well-
recognised legal connotation and is nomen-juris. It has also a popular meaning
as a word of everyday use. In its popular sense, 'timber' is understood to be
'imarathi-Lakdi'. In a popular-sense 'Timber' has certain association of ideas:
as to its size, stability, utility, durability, the unit of measure of quantity
and of valuation etc. [505D; 507A] (6) Having regard. to the size, nature and
description of the wood in the present case, the 'wood-heaps' were not
susceptible to be or did not admit of being called 'Timber' with all the
concomitants and associations of that idea.
503 (7) No tests of general validity applicable to or governing all A cases can
at all be laid-down. Perhaps different considerations might apply if, say, the
pieces of eucalyptus wood are of a longer-length or of a higher girth.
of degree can bring about differences of kind.
Shantabai v. State of Bombay,  SCR 265; referred to.
Appellate Jurisdiction: Civil Appeal Nos. 4026-27 of 1987.
the judgment and order dated 10.9.1986 of the Madhya Pradesh High Court in M.P.
No. 2191 and 413 of 1985.
Sanghi for the Appellant in C.A. No. 4026 of 1987. G.L. Sanghi and J.R. Das for
the Appellant in C.A. No. 4027 of 1987.
Khare, R.K. Sharma and T.C. Sharma for the Respondents.
Judgment of the Court was delivered by VENKATACHALIAH, J. In these petitions
under Article 136 of the Constitution of India, petitioners seek special leave
to appeal from the Judgment and order dated, 10.9.1986 of the Madhya Pradesh
High Court in Misc. Petition 2919 of 1985 and Misc. Petition No. 413 of 1985
appeals raise a short and interesting question whether stacks of
"eucalyptus-wood' sold by the forest- department after separating the
"Ballies" and "poles" constitute and answer the description
of 'Timber' under entry 32 A of Part 11 of Schedule II to the Madhya Pradesh
General Sales Tax Act 1958 (The 'Act'). The High Court, rejecting the
appellant's contention that what was sold, being left- overs after the
extraction of "poles" and "Ballies" of Eucalyptus '
(Nilgiri) Trees, was merely 'fire- wood' within the meaning of and attracting
entry No. 12 of Part V of Schedule II of the Act, held that the goods were
'Timber' under the said entry 32 A. It was, accordingly, held that appellants
were liable to pay sales-tax at the rate of 16% ad-valorem. 504
Special Leave is granted in both the cases. The appeals are taken-up for final
hearing, heard and disposed of by this common judgment. We have heard Shri G.L.
Sanghi, Senior Counsel and Shri A.K. Sanghi for the appellants and Shri T.C.
Sharma for the respondents .
Though, the notification inviting tenders and certain other documents appear to
describes the goods variously as "eucalyputs fire-wood stacks'.,
"eucalyptus wood stacks", 'Nilgiri fuel wood' etc., the nomenclature
is not determinative or conclusive of the nature of the "goods" which
will have to be determined by the application of certain well-settled
principles, guiding the matter.
entries as they then stood in the Schedule to the 'Act' were pointed out by learned
counsel as the possible alternatives:
II Part II Entry 32 A: Timber... 16% PART V Entry 12 : Fire-wood & charcoal
. . 3% Part Vl Entry I : All other goods not included in Schedule I or any
other part of the Schedule . . . 10% Appellants contention urged before the
High Court-and reiterated before us-was that what was sold were the leftovers
and remnants of eucalyptus trees after the extraction of the substantial timber
in the form of "poles" and "Ballies" and that even on the
basis of what the forest- department itself described the goods to be while
putting the 'goods' to tender, the goods were 'fire wood heaps'. It was urged
that having regard to the well-known concept of what constitutes 'Timber' the
wood-stacks sold could, by no stretch of imagination, be held to answer the
description of 'Timber'. The wood sold, it was said 505 "fire-wood"
or at all events, plain 'wood' not amounting to 'Timber' or A 'firewood' in
which case the goods fall within the residuary-entry. This contention did not
find favour with the High Court.
In a taxing statute words which are not technical expressions or words of art,
but are words of everyday use, must be understood and given a meaning, not in
their technical or scientific sense, but in a sense as under-stood in common
parlance i.e. "that sense which people conversant with the subject matter
with which the statute is dealing, would attribute to it". Such words must
be understood in their 'popular sense'. 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 "for the legislature does not suppose our merchants to
be naturalists or geologists or botonists".
expression 'Timber', it seems to us, has an accepted and well-recognised legal
connotation and is nomen- juris. It has also a popular meaning as a word of
everyday use. In this case, the two meanings to 'Timber' the legal and the
popular, coalesce and are broadly subsumed in each other.
Honeywood v. Honeywood, , L.R. 18 Eq. 306, at p. 309. Sir George Jessel
referred to what distinguishes and is "Timber": E "The question
of what timber is depends, first on general law, that is, the law of England;
and secondly, on the special custom of a locality. By the general rule of
England, oak, ash and elm are timber, provided they are of the age of 20 years
and upwards, provided also they are not so old as not to have a reasonable
quantity of useable wood in them, sufficient .. to make a good post.
that is, the kind of tree which may be called timber, may be varied by local custom.
is what is called the custom of the country, that is, of a particular country
or division of a country, and it varies in two ways. First of all, you may have
trees called timber by the custom of the country beech in some countries,
hornbeam in others. And even whitethorn and black-thorn, and many other trees
are considered timber in peculiar localities-in addition to the ordinary timber
trees. Then again, in certain localities, arising probably from the nature of
the soil, the trees of 506 even 20 years old are not necessarily timber, but
may go to 24 years, or even to a later period, I suppose, if necessary; and in
other places the test of when a tree becomes timber is not its age but its
girth." in Shantabal v. State of Bombay & Ors.  SCR 265 this
court, referring to the distinctions between 'standing timber' and 'tree'
referred to the following lexicographic meaning of 'timber':
Timber is well enough known to be-"wood suitable for building houses,
bridges, ships etc., whether on the tree or cut and seasoned".
Collegiate Dictionary). .
was, accordingly, held:
"standing timber" must be a tree that is in a state fit for these
purposes and, further a tree that is meant to be converted into timber so
shortly that it can already be looked upon as timber for all practical purposes
even though it is still standing.
supplied) Legal Glossary, (published by the Ministry of Company Affairs Law
& Justice) gives this meaning of 'Timber':
meant for building or such like use".
the Chambers 20th Century Dictionary, the meaning of the word 'Timber' is this:
suitable for building or carpentry, whether growing or cut: standing trees of
oak, ash, elm, (locality by custom) other kinds etc.
supplied) In words and phrases by John B. Saunders (Vol. 5) 'Timber' is heed to
less than six inches in diameter have been said not to be timber.
In its popular sense, 'timber' is understood to be 'Imarathi-Lakdi'. In a
popular-sense Timber' has certain association of ideas: as to its size,
stability, utility, durability, the unit or measure of quantity and of
valuation etc. The question is whether by the standards of these popular
connotations, the 'wood-stacks' or 'wood-heaps' sold to, and purchased by, the
appellants can be held to answer the popular notions of ''Timber''. When
'standing-timber, is sold as uncut tree different considerations may arise.
nature of the "wood" sold is described in the letter, dated,
30.5.1985, addressed by the Divisional Forest officer. The subject matter of
the sale has been referred to as 'Nilgiri fuel-wood'. The wood was offered for
sale in stacks of the size of l x 1. 25 x 2 mtrs. With each piece of a length
of 1.25 meters and a girth, at the thinner end, of not less than 10 cms. They
were sold not by volume or by the number of pieces. The wood was offered with a
particular kind of user in mind, viz, as a source of industrial-raw material
for 'pulp' in the manufacture of synthetic fibre.
pointed out by the High-Court, in the returns filed by the respondents, it was
mentioned that eucalyptus-plantation was a recent development and promoted with
the specific- purpose for use in specifically in the preparation of pulp and
sold throughout the state with this specific object.
in their endeavor to controvert appellants' contention that the wood sold was
"fire-wood" went on to say that while stacks of fire-wood of similar
sizes fetch prices between Rs.20 to Rs.80 each, the stacks of the eucalyptus-
wood on the other hand, fetch to Rs.300 to Rs.600 per stack and that,
therefore, nobody uses eucalyptus as "fire-wood".
High Court, felt persuaded to the view that the 'wood' sold did not admit of
being described as "fire-wood". It reasoned:
in common commercial 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. Every
kind of wood is potential fire-wood, for you can start a fire with any wood.
But this is not the test. Firewood is wood of a kind which has attained
notoriety as fuel. Nobody who sells fire-wood debarks the wood before sale.
Nobody who buys firewood requires them to be shaved and debarked. Purchasers
may desire the wood to be cut to size. But that is all. There may be eccentric
sellers and eccentric buyers who may indulge their fancies in specialties in
But that, again, is not the test. Where the wood is not, in the normally
accepted commercial practice, firewood, and more especially, where the wood is
sold and purchased subject to specifications which conduce the wood to
particular purposes other than fuel, which is the case in the present two
revisions, the goods sold cannot be regarded as firewood." While
something, perhaps, could be argued in support of this reasoning, what however,
emerges is that the finding that the goods was 'Timber' appears to have been
reached as a necessary consequence and logical corollary of the goods not being
'fire-wood': If the wood is not "fire-wood", it need not necessarily
and for that reason alone be 'Timber'. All wood is not timber as, indeed, all
wood is not 'fire-wood' either though perhaps it may not be incorrect to say
that both 'firewood' and 'Timber' are 'wood' in its generic sense.
High Court further reasoned:
... It has also been mentioned that timber is obtained by cutting standing
trees. It may be hard wood timber or soft wood timber. Eucalyptus trees are
covered by soft wood timber .. " " ... The petitioners offered to
purchase the goods which could be used for manufacture of woodware, furniture,
etc. as well as manufacture of Pulp. The petitioners deal in timber ......
again, pushed to its logical conclusions, the reasoning incurs the criticism of
proceeding to determine the nature of the 'goods' by the test of the use to
which they are capable of being put. The 'user-test' is logical; but is, again,
inconclusive. The particular use to which an article can be applied in the
hands of a special consumer is not determinative of the nature of the goods.
Even as the description of the goods by the authorities of the forest-
department who called them varyingly as 'eucalyptus fuel- wood' 'eucalyptus
wood-heap' etc. is not determinative, the fact that the purchasers were dealers
in timber is also not conclusive.
High Court also observed:
The length of the pieces is not relevant criteria to 509 determine whether the
wood is timber or not. The goods A offered for sale were eucalyptus wood-
stacks ..... Length is, no doubt a relevant consideration; but it is a relative
concept and associated with the idea of utility. A piece of rope, it is said,
is itself a rope, provided It serves the purpose of one.
The question is not really whether "Eucalyptus"(Nilgiri) Tree is or
is not a 'Timber' tree. By every reckoning it is. Eucalyptus is a large, rapid
growing, evergreen tree of the myrtle family, originally a native of
Austrailia, Tasmania and Malaysis. There are a large number of its species. The
ideal species under ideal conditions, it would appear, reaches a height of 370
ft. with a girth of nearly 25 ft. Apart from its utility as a source of gum and
medicinal oils, the slow-growing species are especially known for the quality
of its timber marked for strength size and durability (See: Encyclopaedia
Britannica: 1968: Vol. 8 page 806 & 807; Encyclopaedia American: Vol. 10
pages 648 & 649). But the question is whether the subsidiary parts of the
tree sold in heaps after the 'Ballies' and 'poles are separated, can be called
'Imarathi-Lakdi' or 'Timber'. We think, it would be somewhat of a strain on the
popular meaning of the expression 'Timber' with the sense size and utility
implicit in the idea. to call these wood-heaps 'Timber', meant or fit for building
purposes. Persons conversant with the subject-matter will not call these wood-
heaps 'Timber' whatever else the goods might, otherwise, be.
would appear that at one stage the forest department itself opined that the
'goods' were not timber; but only "fire-wood". We must, however, add
that no tests of general validity applicable to or governing all cases can at
all be laid-down. The point to note and emphasis is that all parts or portions
of even a timber-tree need not necessarily be 'Timber'. Some parts are timber,
some parts merely "fire- wood" and yet others merely 'wood'. Having
regard to the nature and description of the wood in the present case, we think,
the 'wood-heaps' are not susceptible to be or admit of being called 'Timber' with
all the concomitants and associations of that idea. Perhaps, different
considerations might apply if, say, the pieces of eucalyptus wood are of a
longer-length or of a higher girth. Differences of degree can bring about
differences of kind.
What emerges there fore, is that the goods in question are not 'Timber' within
the meaning and for purposes of entry 32A of the Act.
regard to the question as to what other description the goods answer and which
other entry they fall under, learned counsel on both 510 sides submitted that,
if we hold that entry 32 A is not the appropriate one, the matter be remitted
to the High Court for a fresh consideration of the matter in the light of such
other or further material the parties may place before the High Court. We accept
In the result, these appeals are allowed in part and the finding of the High
Court that the goods in question fall within and attract entry 32 A of Part II
of Schedule II of the 'Act' is set aside and the matter is remitted to the High
Court for an appropriate decision as to which other entry the goods in question
attract. The appeals are disposed of accordingly.
We might advert to yet another submission of Sri Sanghi. He submitted that
consistent with the finding that the 'goods' do not attract tax at 16% under
the said entry 32A respondents cannot retain the tax already collected at 16%.
Learned Counsel submitted that even if the goods are said to fall under the
Residuary entry, the rate of tax would only be 10% and that respondents,
accordingly, should be directed to refund to the appellants sums equivalent to
6% of the tax, wherever tax at 16% has been collected, without waiting for a
decision on remand as indeed, there would be no prospect of the goods
attracting tax at a rate higher than 10% now that entry 32 A is held
in our opinion is a reasonable request and requires to be accepted. The
concerned Respondents are directed to refund to the appellants' sums equivalent
to 6% wherever the taxes are already recovered at 16%.
In the circumstances, there will be no order as to costs.