Y. Bhaskar Rao, J.
1. The appellant is a Central Government company who filed this appeal assailing the orders of the Additional Commissioner of Commercial Taxes of Bangalore. The appellant is a dealer in methanol and prepares methanol mixtures (also known as methanol mix) which is a combination of methanol and water in the proportion of 45 : 55 per cent. Except merely adding water to methanol mixture there is no process whatever involved to arrive at methanol mixture. Methanol mixture is supplied to only one type of aircraft and is carried by it during flight. It is supplied only to that aircraft with dart engine. Appellant stated that he has supplied the material at the relevant time mostly)' to Indian Air Force (IAF), The substance in principle is used as a coolant at the time of takeoff only to prevent the engines working at its highest speed from overheating. The appellant declared all along prior to March 31, 1992 the methanol mixture was an unscheduled item and liable to be taxed under Section 5(1) of the Karnataka Sales Tax Act, 1957 (hereinafter called 'the Act'). Assessing authority accepted the position and passed necessary orders which are annexed as A. 1 to A.6, The Joint Commissioner of Commercial Taxes (Admn.), Bangalore City Division-I, Bangalore ('the JCCT' for short) issued notices under Section 21(4) of the Act proposing to shift the classification from the general rate to rate applicable to motor spirit. The appellant replied vide letters dated August 26, 1992, September 10, 1992, September 18, 1992, and December 21, 1992 explaining the facts and situations and requested for dropping the proceedings. The JCCT, after a thorough consideration of the case accepted the appellant's contention and held that classification of methanol mixture under Section 5(1) of the Act by the assessing authority was correct and therefore called for no revision. The respondent issued notice under Section 22A(1) of the Act dated October 30, 1993 proposing for revising the assessment orders for the reasons stated in the notice to construe and hold methanol mixture as a motor spirit within the meaning of entry 85(old) and M. 12 (new) of the Second Schedule of the Act for the years in question. He sought to set aside the order of the JCCT for the years 1984-85, 1985-86 and 1987-88 to 1989-90 and 1990-91 and the order of the assessing authority for the year 1986-87 respectively. The appellant filed reply to the above notices by its letter dated January 22, 1994. The respondent after considering the appellant's reply and other material on record finally passed the impugned order dated March 5, 1995 holding that methanol mixture is a motor spirit and as such liable to be taxed at appropriate rates and accordingly set aside common suo motu order of the JCCT dated February 9, 1993 as well as the assessment orders for the years in question. He held that methanol mixture for all the six assessment years represented a motor spirit and was subjected to tax at the rate prescribed under entry 85(old)/M.12(new) of the Second Schedule and accordingly directed assessing authority to collect the differential tax and issue demand notices for all the six assessment years and thereafter notices were issued. Against that order present appeal is filed.
2. The learned counsel for the appellant contended that the respondent erred in holding that the methanol mixture is a motor spirit for purpose of taxation. The methanol mixture used only at the time of taking-off the flight as a coolant and not as a fuel. When it is not a fuel it cannot be treated as a motor spirit as per the explanation provided under the Act. Therefore, the methanol mixture has to be taxed as a general item as it is not provided under the Act under residuary provision and cannot be taxed as a motor spirit.
3. Learned Government Advocate contended that the methanol mixture is used in the flights and. it is directly injected into the combustion chamber of the aircraft at the time of take-off and also at high altitudes for power restoration and power augmentation. It may not be a principal fuel but it is noticeable that provides a more fuel in the combustion chamber of jet engine by facilitating a greater and more optimum burning of the main fuel, besides contributing a small quantity of energy by its own burning. Therefore, it is a motor spirit as defined as per Second Schedule of the Act.
4. In view of the above contentions important question of law that has to be considered is whether the methanol mixture is a motor spirit or not and whether it is taxable as a motor spirit or as a general item under the Act ?
5. To appreciate the above contention it is useful to refer to the provisions of the Act. Section 5 of the Act provides for levy of tax on purchase and sale of goods. Section 8A provides to empower State Government to notify exemption and redemption of taxes. Second Schedule of the Act provides for classification of goods and rate of tax leviable on such goods during the course of sale and purchase of the same. Old entry 85/M.12(new) of the Second Schedule deals with the motor spirit and provides for tax at the rate of 15 per cent for the years 1984-85, 1985-86 and thereafter entry 12 of the Second Schedule deals with the motor spirit and it provides for tax at the rate of 20 per cent for the years 1986-87, 1988-89. For the year 1989-90 tax is at the rate of 18 per cent and again for the year 1990-91 tax is at the rate of 19 per cent. With effect from April 1, 1992 the methanol mixture came to be classified under entry of category of petroleum products vide entry No. P5 of (xiv) carrying rate of 10 per cent tax. If the methanol mixture is not treated as motor spirit it will fall under the general entry and will be taxed at the rate of 5 per cent as an article not provided in the Schedule, Contention of the appellant is that methanol mixture cannot be treated as motor spirit. It is to be noticed that explanation IV to Second Schedule provides as to what is the meaning of motor spirit and which is as follows :
'Motor spirits' means any substance which by itself or in admixture with other substances is ordinarily used directly or indirectly to provide reasonably efficient fuel for automotive or stationery internal combustion engines and includes petrol, diesel oil and other internal combustion oil but does not include kerosene, furnace oil, coal, coke or charcoal.
6. By above explanation it is manifest that test furnished by the definition is whether it is a motor spirit or not is to find out if the substance is ordinarily used directly or indirectly to provide reasonably efficient fuel for automotive or stationery internal combustion engines. Methanol mixture is directly injected into the combustion chamber of aircraft during take-off for power augmentation. If the substance is used ordinarily directly or indirectly to provide reasonably efficient fuel for automotive or stationery internal combustion engines such substance could be termed to be a motor spirit within the meaning of entry 85 of the Second Schedule of the Act. Therefore, methanol mixture could be considered as motor spirit within the meaning of the Act, There is no dispute that the methanol mixture is injected into combustion chamber during take-off of the aircraft and also at high altitude for power restoration and augmentation. Further, it is noticeable that methanol mixture while mainly contributing to increase in the density in the combustion chamber of the jet engine, also partakes in the combustion releasing a certain amount of energy. It may be that it is not used as principal fuel ; but it is noticeable that provides a more fuel in the combustion chamber of jet engine by facilitating a greater and more optimum burning of the main fuel, besides contributing a small quantity of energy by its own burning. So the methanol mixture in admixture with gasoline and air indirectly provides efficient fuel for automotive internal combustion engine and falls within the description of 'motor spirit' of the Second Schedule to the Act.
7. Learned counsel for the appellant contended that the Second Schedule to the Central Excise Act defines 'motor spirit' as :
'..............Motor spirit, that is to say, any hydrocarbon oil (excluding crude mineral oil) which has its flash point below 25oC, and which, either by itself or in admixture with any other substance, is suitable for use as fuel in spark ignition engines.'
By reading above definition it cannot be said that motor spirit is a fuel unless it sparks ignition engines. The Act has provided the explanation giving meaning of the motor spirit. When the Act under which tax levied is specifically provides meaning of the substance, it is not necessary to look into the definition provided under the Act unless constitutional validity of the concerned entry or description of the goods or substance is challenged as arbitrary and unconstitutional. In this case such challenge is not made. Therefore, we think it is not just and proper to take the definition as provided under the Second Schedule of the Central Excise Act to consider whether methanol mixture is motor spirit or not under the Karnataka Sales Tax Act. So we are not able to accede with the contention of the learned counsel for the appellant.
8. Learned counsel secondly contended that Legislature itself treated methanol mixture from April 1, 1992 as petroleum product by amending Schedule to the Act and it is no more a motor spirit. When it is a petroleum product it cannot be a motor spirit. So even earlier to April 1, 1992 it has to be treated as petroleum product and not motor spirit. The Legislature has got freedom to treat a particular substance in a particular way as it likes unless the Legislature has no legislative competency or description given as unconstitutional. As stated supra the constitutional validity of the entry is not challenged before us. When the Legislature has got a right to treat the particular goods or substance in a particular way the same cannot be questioned otherwise than its constitutional validity on the ground of arbitrariness or legislative competence. Therefore, merely because methanol mixture is treated as petroleum product from April 1, 1992 it cannot be said it cannot be treated as motor spirit as defined under the Act.
9. Thirdly, the learned counsel contended that unless it is a fuel it cannot be a motor spirit and the methanol mixture is not used as main fuel to the engine, therefore it cannot be treated as motor spirit. We have already discussed supra that methanol mixture is injected into combustion chamber to augment better use of fuel during take-off and also at high altitude for power restoration and power augmentation. As per the definition given under the Act it need not be directly used as a fuel, even if used indirectly to facilitate the better and effective use of the fuel and proper functioning of the engine of the aircraft it can be treated as a fuel.
10. In this regard it is important to refer meaning of the 'fuel' as given in Mc. Graw Hill Encyclopaedia of Science and Technology, VI. 7, Fabgen :
'Fuels : While any chemically suitable fuel including metals such as lithium (Li), sodium (Na), aluminium (Al) and Zinc (Zn), may be used in a fuel cell, hydrocarbons (for example, natural gas) will not react as a significant rate in low temperature fuel cells. They will crack thermally before reacting electro chemically if injected directly into high temperature fuel cells. Practical hydrogen--bearing fuel have reactivates in low temperature cells that increase in the order hydrocarbons--ammonia-methanol-hydrazine-hydrogen, provided that suitable anode catalysts are used. Simple low power units operating directly on methanol at ambient temperature do find some use and liquid-fueled hydrazine cells have also found specialised applications. However, the high manufacturing energy requirement for hydrazine, together with its high cost and hazardous nature, leaves hydrogen the only suitable general high performance fuel candidate. See Ammonia : Hydrazine : Hydrocarbon, Hydrogen, Methanol.'
11. The above definition of 'fuel' also supports contention of the Government Pleader that the methanol mixture could be treated as motor spirit.
12. Therefore, we are not able to agree with the contention of the learned counsel for the appellant.
13. The learned counsel for the appellant lastly contended that the Karnataka Government has issued Notification No. FD 71 CSL 84 dated March 3, 1986 reducing the percentage of tax to 4 per cent.
14. By reading the said notification it is evident that the reduction of the tax to 4 per cent is applicable only to the goods produced by the manufacturers in the State of Karnataka and which are sold to the departments of Government of India or Government of Karnataka or Government of any other State located in Karnataka State. The appellant is not the manufacturer of the methanol mixture. The appellant is a dealer in methanol and he supplies by adding water to the methanol as a methanol mixture to the consumers. Therefore, it cannot be said that the appellant is a manufacturer of the methanol mixture. Once he is not a manufacturer within the State of Karnataka even if he sells to the Central or State Government Departments at Karnataka the benefit provided in the notification is not available.
15. Therefore, we do not see any merits in the appeal and accordingly we proceed to pass the following order.
16. Appeal is dismissed.