SETH, J. - (1.) THE assessee, Messrs. Industrial Chemical Corporation, Ghaziabad, carried on business in paints, marble chips, white cement, coal-tar, etc. It also dealt in carbide of calcium. For the assessment year 1963-64 its turnover in respect of calcium carbide, imported from outside U.P., was determined at Rs. 63,720.93. The Sales Tax Officer assessed this turnover to tax amounting to Rs. 4,460.47 by applying the rate of 7 per cent. as provided in Notification No. ST. 3391/X-1012/1962 dated 1st July, 1962, treating calcium carbide as a chemical.
(2.) THE assessee went up in appeal claiming that calcium carbide is not a chemical within the meaning of that notification and that its turnover should have been assessed to tax at the rate of 2 per cent. as an unclassified item. The Assistant Commissioner (Judicial), who heard the appeal, came to the conclusion that when calcium carbide is brought into contact with water, it reacts to it and emits acetylene. It was therefore a chemical within the meaning of the notification. Its turnover had therefore been rightly assessed to tax at the rate of 7 per cent. The assessee then filed an application in revision before the revising authority contending that calcium was in fact a fuel used for welding. It was an unclassified item and its turnover should have been assessed to tax accordingly. The revising authority rejected this contention and held that when calcium carbide is brought into contact with water it emanates acetylene gas. It is this gas which may be called fuel. Calcium carbide, which is an article used for generating gas, is a chemical and its turnover had been rightly assessed to tax at the rate of 7 per cent. At the instance of the assessee, the Additional Judge (Revisions) has referred the following question for the opinion of this court : "Whether on the facts and in the circumstances of the case, calcium carbide is taxable as chemical under Notification No. ST 3391/X-1012/1962 dated 1st July, 1962, or as an unclassified item ?"
(3.) ACCORDING to the Shorter Oxford Dictionary, a chemical means anything obtained or used in chemistry. It will, within its ambit, cover a substance which is used for producing chemical effect or is produced by a chemical process. Encyclopaedia Britannica describes calcium carbide as a chemical substance in which carbon is combined with a metallic or a semi-metallic element. According to it, calcium carbide (CaC2) is one of the most important carbides and it is used for generation of acetylene. It is therefore clear that as per the dictionary meaning calcium carbide is a chemical.;